Trump Not Seeking Full Repeal Of Dodd-Frank; Opposes Bank Bailout Provision

Tyler Durden's picture

One of the bigger surprises to emerge from the initial attempts by the Trump transition team to frame the president-elect's policy yesterday, was what was dubbed at full repeal of Dodd-Frank, a move which has been seen by some as surprisingly pro-banker friendly.

Specifically, this is what the website says on the topic of Dodd-Frank:

Following the financial crisis, Congress enacted the Dodd-Frank Act, a sprawling and complex piece of legislation that has unleashed hundreds of new rules and several new bureaucratic agencies.  The proponents of Dodd-Frank promised that it would lift our economy. Yet now, six years later, the American people remain stuck in the slowest, weakest, most tepid recovery since the Great Depression.  Paychecks have been stagnant.  Savings are being depleted, millions are unemployed or underemployed, and millions more have dropped out of the workforce altogether.  Economic growth remains below 2%, about half the historic average.  The big banks got bigger while community financial institutions have disappeared at a rate of one per day, and taxpayers remain on the hook for bailing out financial firms deemed "too big to fail." 

 

The Dodd-Frank economy does not work for working people.  Bureaucratic red tape and Washington mandates are not the answer.  The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation.

However, in what may be bad news for the financial sector, following vocal opposition to grassroots as well as Congressional republicans, Trump appears to now be tempering expectations of a full Dodd-Frank repeal, and according to the WSJ, Trump’s transition team is instead focusing on "rescinding or scaling back individual provisions" of Dodd-Frank that Republicans dislike most, such as the Financial Stability Oversight Council’s authority to designate large nonbanks systemically important and thus subject to tougher regulation from the Federal Reserve.

The WSJ adds that another priority is overhauling a separate section of Dodd-Frank, Title II, that gives financial regulators the authority to take over a failing financial firm and liquidate it—an alternative to the government’s 2008 strategy of bailing out banks by handing them equity capital.

Suggesting that Trump has not been captured by the banking lobby, at the same time a Trump administration is expected to embrace other aspects of the massive law, including efforts to boost the transparency of credit-rating firms and regulate derivatives products.

Some more details:

Much of the policy work to date appears to overlap with Republican-backed legislation to replace Dodd-Frank that was written by House Financial Services Committee Chairman Jeb Hensarling (R., Texas.). Mr. Hensarling’s committee approved the bill in September by a vote of 30-26, largely along party lines. Mr. Hensarling is under consideration to serve as Mr. Trump’s Treasury secretary, other people familiar with the matter said.

 

Unlike other parts of Dodd-Frank, Title II is staunchly supported by large banks. They say it is proof that bailouts are a thing of the past. Some Republicans, however, would rather put big financial firms through bankruptcy. They believe Title II as it stands is simply a bailout by another name.

 

These Republicans especially dislike a provision that allows the government to temporarily lend money to a failing bank so it doesn’t collapse while the government unwinds it. In a quirk, the Congressional Budget Office views this part of the law as a liability for the federal government. That means that any legislation repealing the section looks attractive because it saves money, according to the CBO.

It is likely that the final outcome of this work in progress may still change as Trump’s financial policy team is still being assembled and its priorities could change. The WSJ also adds that Trump's team has tapped Paul Atkins, a former Republican member of the Securities and Exchange Commission and longtime Dodd-Frank critic, to recommend policies on financial regulation.

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Kirk2NCC1701's picture

No Dodd-Frank REACHAROUND?  That's gotta suck*

* pronounced 'thuck'

Duane Norman's picture

Dodd-Frank is OK to fuck with, but here's what Trump should really be doing - TERM LIMITS

http://fmshooter.com/trump-needs-focus-first-100-days-plan/

MillionDollarBonus_'s picture

So how exactly are we supposed to deal with financial crises without bailing out important systemically financial institutions? Sorry Trump, but some banks are simply too big to fail, and refusing to admit this will only lead to economic Armageddon.

THINGS OBAMA NEEDS TO DO BEFORE HIS TERM ENDS
Normalcy Bias's picture

Perhaps his method to deal with 'too big to fail' will be to break up these institutions.

That's loooong overdue....

nibiru's picture

He has to do the biggest things on his list in the first 6 months. Later there will be distractions and problems that can easily take too much time to deal with and postpone or even stop any real changes.

 

The Financial sector, the Military-Industrial Complex and the Political class. The 3 targets that want Trump either to do nothing or basically die in case he lifts a finger and try to change something meaningfully.

californiagirl's picture

This is Trump's chance to undo Clinton damage by reinstating Glass Steagall. While he is at it, he can tackle naked shorting, flash trading, dark pool frontrunning and a slew of other corrupt activities. Then there is Bubba's Commodity Futures Modernization Act.

Dave5150's picture

^^^^^^^^ THIS, x1 MILLION.  Wait... x100... BILLION.  Muhaha... muhahahaha... muhahahahahahahahaha!!!

californiagirl's picture

To add to my above comment, perhaps Trump can name it the Anti Clinton-Obama-Squid Act. Or ZHers can come up with a better name.

letsit's picture

people who voted for trump are in for a rude awakening. he's 200% establishment. see, he's already backtracking, not even putting up a fight.

Infocat's picture

We will see after the first 6 months, before that its unwise to already judge him. Hes not even in office.

Tarjan's picture

From the 2016 Republican Platform, under the section titled "Regulation: The Quiet Tyranny":

"We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment."

I consider this to be a promise to the American people and I expect, no demand, that it be kept.

~

P.S.: We should all go to https://apply.ptt.gov/yourstory/ and give The Donald our thoughts. I just did.

Automatic Choke's picture

TYLERS:

I suspect DJT (or his staff) reads ZH.    Thus, I strongly request that the Tylers start a topic of idea requests for DJT agenda.

 

Jim in MN's picture

 

Here is a very serious start.  Note that it is from five years ago.  Other than some of the names, it is all right here, at least as a discussion starter.

 

You have to move the goalposts a looooooooooooong way to even have a shot at the kind of change we need.

 

https://www.scribd.com/document/67758041/List-of-Demands-October-6-2011

 

JRobby's picture

We need Glass-Steagall reinstated.

We need banks

WE ABSOLUTELY UNDER NO CIRCUMSTANCES NEED TBTF BANKS.

The quicker they are broken up and the criminals that remain "in the industry" from before 2008 and after are prosecuted, the faster things wil normalize.

Yes, massive write downs and asset fire sales needed. It must be "orderly" (see today's jump in foreclosures piece on ZH)

Clinteastwood's picture

Truth: no bank is really too big to fail.......

.......that includes the Federal Reserve.

crossroaddemon's picture

We NEED banks? Honestly I'd be delighted to see a return to the days when the charging of interest was a crime. Along with that start proecuting any CEO, board member, and shareholder of any company found to be in violation of any law to the fullest possible extent. These two provisions would scale shit back to a much more local level almost overnight, which is the first step to actually doing something worthwhile.

Jack's Raging Bile Duct's picture

Corporate personhood must die. Executives need to go to jail and have their assets auctioned off. Shareholders need to lose everything.

MEFOBILLS's picture

Actually charging interest in some cases is ok.  

It becomes very complicated.  Ancient Venice  would look at both the Creditor and Debtor as the contract was negotiated.  For example, if a ship owner wanted to go on a fishing expedition and needed money, creditor could not take interest until after the catch.

To prevent non usurious credit/debt relations, the contract is legally examined at inception.

If the expedition went bad, then debtor was considered to have put his boat and life at risk.  Therefore, the money creditor would take a large part of the loss.

In today's world, usury as a concept has lost its meaning.  Today, the bank will take boat as collateral, and then re-sell it to get their "money capital" back.  Never mind that bankers credit/capital sprung from thin air.  

If it is an equitable deal, then both creditor and debtor will share in the gains.  

Modern man has a very unsophisticated understand of usury and also debt/credit relations.  This is a feature of today, as the hypnosis was funded into existence by our (((friends))) especially starting around from years 1100 AD on.  And yes, usury as a weapon, is the funding mechanism sanctioned in talmud.

The devil wins at the moment you do not know he is there.  By way of deception, thou shalt do war.

sarz's picture

Banking - lending at interest - is specifically mentioned as a weapon for the Jews to subdue other nations in Deuteronomy, part of the Torah, that we are told to believe is good and unlike the evil Talmud. 

A Nanny Moose's picture

No. Interest rates serve a purpose. They are the price of money. Take the horseshit free money economics elsewhere.

thamnosma's picture

I did express my desire for a new Glass Steagall Act along with opposition to Dimon or Munchin as Treasury Secretaries over at GreatAgain.gov. I really do think someone will be reading and tabulating input from citizens there. Takes all of a couple minutes to leave opinions or remarks.

prmths2's picture

A more direct approach:

https://www.greatagain.gov/

click on "share your ideas"

Syrin's picture

I look forward to the day you die from choking on a double donger,

GunnerySgtHartman's picture

Sorry Trump, but some banks are simply too big to fail

Then BREAK THEM THE HELL UP.  Is it really that hard?  NO!

RaceToTheBottom's picture

The creation of the Royalty Bankster class is too important to joke about, even sarcastically.

Dodd Frank changes are not enough.  

Glass-Steagall with HFT mods or the fix is in.

Jack's Raging Bile Duct's picture

End The Fed. End legal tender laws. Bankers destroy themselves. The only thing that has ever preserved them is The State.

MEFOBILLS's picture

How about a fully sovereign money system.

Why allow private emissions of bank corporate credit?  It is fraud, crazy, and an unstable system to boot.

Even glass steagall was a stop gap to help prevent some of the excesses of debt money system.

All private bank emissions of credit have a sawtooth.  The economy rises up slowly as new bank credit is hypothecated into existence.  Then it collapses quickly into depression.  This forms a sawtooth.  During the depression phase, the banksters then enter harvest time.  Harvest phase is when you SWAP MAGICKALLY, real assets to cancel debt instruments.

This forms a plutocratic oligarchy over time, where the owners of all productive enterprise are merged with finance.  Any cursory view of Western Corporate ownership structure will reveal this as the case in today's world.

The NEED act H.R. 2990 is alread on the book in the U.S.

http://www.monetary.org/wp-content/uploads/2013/01/HR-2990.pdf

Within a debt system, it can have mechanisms for paying off debts.  Yes, glass steagall has firewalls which should be resurrected, provided humanity stupidly keeps the (((fraudulent))) debt money system.  I comment below on how Trump can pay off U.S. public debt.

http://www.zerohedge.com/news/2016-11-11/surging-bond-yields-signalling-...

 

 

T830's picture

Am I wrong to think MDB is supposed to be a satirical cartoonish voice of the delusional people in the US?  

Il Dottore's picture
Il Dottore (not verified) Duane Norman Nov 11, 2016 12:27 PM

Only Possible Solution to this is Glass Steagall
Bear that in mind

The Wizard's picture

THAT'S IT, REINSTALL A SUPER VERSION OF GLASS-STEAGALL. DOES MDB AGREE?

MANvsMACHINE's picture

Glass-Steagall-Trump

or is it Trump-Glass-Steagall?

bidaskspread's picture

Only possible solution for this is a breakup of the bankster cartel. They'll side swipe Glass Steagull through international means. Just look at the bloated DB if you have questions. 

Il Dottore's picture
Il Dottore (not verified) bidaskspread Nov 11, 2016 12:35 PM

Son, we got no WWIII for now.... But it is the Kosher Mafia, Sheldon Adelson and Benjamin Netanyahu, who actually have Trumps back... So unless he throws them out...
Picture here the URSS ouctome, sooner or later

Jim in MN's picture

Let us reinforce the principle behind all of this...in fact, the principle behind Zero Hedge itself to a large degree:

CAPITALISM and MARKETS are IMPOSSIBLE without RISK including FAILURES

Everything else, from the Fed to ZIRP to the collapse of small business formation to stagnant productivity and wages, stems from the fundamental throttling of risk for the global elites and their pet institutions.

NO BAILOUTS

NO INTEREST RATE MANIPULATION (prolly have to phase that one in)

PROPER MARK TO MARKET/GAAP ACCOUNTING

May need to relocate Treasury Department and Federal Reserve offices away from NYC and DC just to make the point more strenously.  Try Cincinnati.

Bay of Pigs's picture

Not likely. Mitch McConnell said the issue isnt even on the table.

SleepWaker's picture

Looking for term limits is just as possible as the a-holes looking to repeal the election results.  It's never gonna happen.  

LetThemEatRand's picture

The President could use his position to urge and help organize a constitutional amendment movement.  The grass roots of both sides would be all over it.

Heywood Jaeatme's picture

Trump hasn't actually won the election - yet. How about an amendment to abolish the electoral college? And another to end gerrymandering?

GunnerySgtHartman's picture

How about an amendment to abolish the electoral college?

And by doing that, you empower the 14 largest states to elect the president every four years.  You do realize that, right?  Do you really want to shut out the 36 smallest states from the presidential election process?  Talk about civil war, that will do it.  The purpose of the Electoral College was to insure that ALL of the states have a say in the presidential election.  Bear in mind, too, that Bill Clinton did NOT win a majority of the popular vote in either 1992 or 1996.  Should his election be nullified?

And another to end gerrymandering?

And how are you going to do that?

francis_the_wonder_hamster's picture

You are correct, but getting rid of "winner-take-all" in each state is worth discussing.  

If this were in place in California, a lot of Republicans who stay home every year would now vote and the "Hillary won the popular vote" crap would end very quickly.

Winner-take-all in each state strongly favors cities.  Just ask anyone in Southern Illinois, California, etc....

GunnerySgtHartman's picture

Winner-take-all in each state strongly favors cities.

While I completely agree, it's an issue that I feel the states should decide for themselves.

RaceToTheBottom's picture

You want to change the Constitution?  I don't think that is a good solution to something that you do not understand.

https://www.prageru.com/courses/political-science/do-you-understand-elec...

NotApplicable's picture

Living in a term limit state, I can tell you this: the only thing I've seen term limits do is to further obfuscate who is owned by whom. Instead of a bunch of old, recognizable politicians, all I see are a bunch of young faces with no past.

Meanwhile, the oligarchs still control who appears on any ballot with their in$trument$ of persuasion.

manlius torquatus's picture

I am okay with "term limits" but do you really think those incumbents will realistically start a "constitutional amendment" bill in congress that describes the method in cutting one's own throat?  Only way this will happen has to come from the American people marching on DC to get their attention.

knukles's picture

Dat's code.  (That's cold)
Wo shunndt b making fun ob da hanicap.