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Published: Sat, February 04, 2017
Entertainment | By Alexander Flowers

New Trump orders target Obama-era financial regulations

New Trump orders target Obama-era financial regulations

Mr. Cohn said the actions are meant to pave the way for additional orders that would affect the postcrisis Financial Stability Oversight Council, the mechanism for winding down a giant faltering financial company, and the way the government supervises big financial firms that aren't traditional banks, often referred to as systemically important financial institutions.

Yahoo Finance is tracking the financial sector as President Donald Trump is expected to take the first steps to scale back financial services regulations in the US. He said Dodd-Frank was a "disastrous policy" that was "crippling" the United States economy.

Now advisors are held to a much lower standard, known as "suitability" - meaning that any investment that they suggest just has to be appropriate for a client, not necessarily what the person needs most.

Schumer also accused Trump of hypocrisy by looking to eliminate regulations after campaigning on a promise to rein in Wall Street. On Friday, he announced his intention of making it far easier for bankers to con the American public-just like he has.

Trump is scheduled to sign executive orders in a ceremony Friday afternoon.

"We expect to be cutting a lot out of Dodd-Frank because frankly, I have so many people, friends of mine that have nice businesses and they can't borrow money", Trump said.

Financial analysts said scaling back or undoing Dodd-Frank reforms will take time and action from a deeply divided Congress.

White House National Economic Council Director Gary Cohn echoed the president in an interview with Fox Business Network's Maria Bartiromo.

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Prior to signing the order, Trump held a meeting with small business owners during which he promised to do "a big number" on the Dodd-Frank Act, the signature piece of legislation drafted in response to the 2008 financial crisis and subsequent housing meltdown. The deregulation "has nothing to do with Goldman Sachs", he said.

Most of Dodd-Frank is focused on banks and other financial institutions, but some elements cut across industries.

Many Dodd-Frank measures are unpopular with financiers, including the Volcker Rule, which stops firms from proprietary trading - the practice of speculatively trading their own funds for profit. The Trump Administration is jam-packed with Wall Street big shots, like Treasury Secretary nominee Steven Mnuchin, a former Goldman Sachs partner and chairman of OneWest Bank.

Trump's order won't have any immediate impact. The CFPB has proved an effective consumer watchdog and has returned over $11bn to the victims of payday lenders, loan sharks and those charged excessive overdraft fees since its creation.

What's the goal of Dodd-Frank?

A Manhattan businessman, Trump's aggressive orders are expected to draw backlash from Democrats who distrust big banks and want regulations and oversight in place.

Trump's administration is packed with Wall Street veterans.

"Ultimately, we look forward to the administration, Congress and the regulators working together to reduce regulatory burden", Berger said. "It can't be done by fiat".

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