NEWS: What Dodd-Frank Repeal Could Mean

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NEWS: February 7

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What Dodd-Frank Repeal Could Mean

A financial regulations expert weighs in on the possible implications of President Donald Trump's executive order scaling back the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

The enormous piece of financial reform legislation passed as a reaction to the 2008 financial crisis and covered about 2,300 pages. It also established a number of government agencies charged with overseeing different aspects of the banking system.

Joseph Lynyak III, partner at the international law firm Dorsey & Whitney and an expert on Dodd-Frank, the Volcker Rule, regulatory reform, and the CFPB, reviewed the executive order and provided commentary.

"The President's Executive Order 'Core Principles for Regulating the United States Financial System' establishes a set of guidelines by which the Administration will judge the advisability of implementing financial regulatory changes not needing Congressional approval," he said.

Importantly, Lynyak noted the Treasury Secretary has delegated the portfolio for financial regulatory reform, and through his role as chair of the Financial Stability Oversight Council (established by Title I of the Dodd-Frank) is charged with the task of identifying what will have the effect of making the U.S. financial system safe, sound and competitive. "Clearly this will include modifications to Dodd-Frank Act rules that have been repeatedly criticized by the industry as being burdensome, costly, and ineffective," Lynyak said.

In a blog in The Hill, Pam Perdue, EVP, chief regulatory officer for New Haven, Conn.-based Continuity, wrote "The Banking Compliance Index disclosed that since January 2013, banks and credit unions have engaged with more than 1,200 new rules covering over 53,000 pages in the Federal Register." Read the story at CREDIT UNION TIMES

Opinion: The honeymoon is over: Wall Street is finally taking Trump literally

By itself, the 230-point drop in the Dow Jones Industrial Average DJIA, +0.80% this week wasn't earth shattering: 1% gains and losses happen all the time. But the clattering sound accompanying it wasn't hard to diagnose: It was the sound of scales falling off of Wall Street's eyes.

The market this week is dealing with the realization that President Donald Trump means all the things he says. He really is a protectionist, really does think America needs to be protected from the world both economically and physically. He really does make policy without much care or thought to get details right, he really has recruited an honest-to-God terrible team, and it actually is kind of dangerous.

For months, Wall Street strategists scrambled to justify a post-election rally most didn't see coming by claiming Trump's proposed tax cuts and vague infrastructure spending plans would goose growth, while discounting his vow to impose trade barriers as not really serious. Ten days into his presidency, the president has alienated our third-biggest trading partner in Mexico while having his spokesman float vague proposals about 20% taxes the president himself says might apply to all imports.

And the rally goes thump. Not quite a crash, certainly not yet.

But the combination of the flirtation with new trade barriers - there's no bill introduced in Congress yet to make them real - and this past weekend's bar on immigration or even visitors from seven mostly-Muslim nations makes clear that Trump really means to do as he says.

And the Keystone Kops nature of how he fired Acting Attorney General Sally Yates, for refusing to defend the immigration order in court, along with the head of Immigration and Customs Enforcement, makes clear that inmates led by presidential counselor Steve Bannon now run the asylum. Read the entire story at MarketWatch

It's time to reform the CFPB

When Congress created the Consumer Financial Protection Bureau, there was an implicit assumption that it would be a non-partisan, independent agency. The Bureau was set apart from the President's agenda at inception. Yet, the Bureau has been driven by partisan politics from the very start under the leadership of a single, unaccountable director with tremendous unchecked power. If partisan ideology is to be eliminated at the Bureau and accountability restored, Congress must re-structure the CFPB under the leadership of a bipartisan commission.

In the aftermath of the creation of the original New Deal administrative agencies, the Court ruled on basic requirements for delegating broad powers to such agencies. Neither in fact or spirit does the CFPB meet those standards - standards established to insure accountability. The establishment of any administrative agency has the direct consequence of distancing governmental power from those who are the source of all power in the American republic - its citizens. Accountability then is the absolute essential for such delegation, and the CFPB has failed to practice that central truth. Read more at THE HILL

Trump begins rollback of Dodd-Frank financial regulations

President Trump signed an executive order Friday taking aim at the regulatory labyrinth created by Dodd-Frank, the massive 24,000-page law passed in the wake of the 2008 financial crisis.

"We expect to be cutting a lot out of Dodd-Frank," Trump said, after morning meetings with business leaders.

The order directs the Treasury secretary to initiate a review and consult with regulatory agencies to identify changes to Dodd-Frank. It will not take effect immediately and awaits Senate confirmation of Trump's Treasury Secretary nominee Steve Mnuchin.

Trump also signed a presidential memorandum that instructs the Labor Department to delay implementing an Obama-era rule that requires financial professionals who charge commissions to put their clients' best interests first when giving advice on retirement investments.

The rule was intended to prevent conflicts of interest by financial advisers and brokers. Opponents say it extends beyond the Labor Department's authority.

While the financial oversight order won't have any immediate impact, the administration's intent is clear. Read the entire story at FOX NEWS

Trump targets CFPB in plan to unravel Dodd-Frank Act

President Trump is itching for a fight with Democrats over reining in the Consumer Financial Protection Bureau, one of the most contentious reforms in response to the 2008 financial meltdown.

Just two weeks into his presidency, Mr. Trump took aim at the bureau with an executive order to begin unraveling the rules and regulations in the Dodd-Frank Act that created the watchdog agency in 2011.

The order didn't mention the CFPB or its director, Richard Cordray, but the directive for the Treasury to review and assess changes to financial regulations and regulatory agencies had the inference to the bureau written all over it.

The battle over the agency's fate is bound to get nasty.

"We expect to be cutting a lot out of Dodd-Frank," Mr. Trump said at a White House meeting last week with business titans, including JPMorgan Chase & Co. CEO Jamie Dimon.

Read the story at THE WASHINGTON TIMES

Court denies Democrats' push to defend CFPB

Could the next stop be a decision on the CFPB's petition?

The D.C Circuit panel on Thursday denied all three motions to intervene in the landmark case between the Consumer Financial Protection Bureau and PHH.

The case, which is waiting for a final decision on the CFPB's petition for rehearing en banc, received three additional motions over the last couple weeks from Democratic state attorneys general, Senators, and consumer advocacy groups, who were attempting to intervene on behalf of the CFPB.

However, the likelihood that the court would deny those motions was high. Alan Kaplinsky, partner and leader of Ballard Spahr's Consumer Financial Services Group, explained that it is very uncommon for motions to intervene to be filed in an appellate court. "In my 46 years of practicing law, this is the first time I have seen it," he said.

Kaplinsky said the motions were a long shot, adding that it would've been a real Hail Mary.

More than a dozen state attorneys general filed their motion to intervene first, stating that the election of Donald Trump compelled them to intervene in the CFPB lawsuit. "When PHH filed the original petition for review in June, 2015, there was little reason for the State Attorneys General to intervene. At that time, the CFPB still had an independent Director and was fully committed to seeking rehearing to challenge the panel's ruling and defend the constitutionality of the bureau's independent structure," the AGs state in their motion to intervene.

"But as a result of the presidential election," the AGs continued, "the situation has changed."