Trump To Sign Executive Orders Undoing Dodd-Frank, "Fiduciary Rule"

Tyler Durden's picture

On Friday, President Donald Trump plans to sign an executive action to scale back the 2010 Dodd-Frank financial-overhaul law, in a sweeping plan to dismantle much of the regulatory system put in place after the financial crisis. The order won't have any immediate impact. But it directs the Treasury secretary to consult with members of different regulatory agencies and the Financial Stability Oversight Council and report back on potential changes. 

"There are quite a few things that we could do on Dodd-Frank ... that we think will have fairly immediate and dramatic impact," the official said, including personnel changes at regulatory agencies and additional executive orders.

That likely includes a review of the CFPB, which vastly expanded regulators' ability to police consumer products — from mortgages to credit cards to student loans. Trump administration officials, like other critics, argue Dodd-Frank did not achieve what it set out to do and portray it as an example of massive government over-reach.

Trump will also sign a presidential memorandum Friday that instructs the Labor Department to delay implementing the so-called "fiduciary rule" - 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 "fiduciary rule" was aimed at blocking financial advisers from steering clients toward investments with higher commissions and fees that can eat away at retirement savings.

The retirement advice rule was issued by the Obama administration and was set to take effect in April. It has been staunchly opposed by the financial services industry, who argue the rule limits retirees' investment choices by forcing asset managers to steer them to the lowest-risk options. Opponents of the rule argued that the rule would result in high costs that will ultimately make small accounts unprofitable. While some lawsuits were filed against the rule, companies like Bank of America Corp's Merrill Lynch and Morgan Stanley had announced plans to cooperate with the rule. The Labor Department had estimated that it could cost firms as much as $31 billion over the next decade to comply.

“Americans are going to have better choices and Americans are going to have better products because we’re not going to burden the banks with literally hundreds of billions of dollars of regulatory costs every year,” White House National Economic Council Director, and former Goldman president, Gary Cohn said in an interview with The Wall Street Journal. “The banks are going to be able to price product more efficiently and more effectively to consumers.”

A senior White House official outlined the measures in a background briefing with reporters Thursday. "We think that they have exceeded their authority with this rule and we think this is something that is completely overreaching," the official told reporters at a briefing on Thursday.

Trump pledged during the campaign to repeal and replace the law, which also created the Consumer Financial Protection Bureau. "Dodd-Frank is a disaster," Trump said earlier this week during a meeting with small business owners. "We're going to be doing a big number on Dodd-Frank."

Cohn said the actions are intended 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.

More from the WSJ:

Trump blamed the political establishment and Wall Street banks for leaving behind many Americans and vowed to break up both. Those promises have already been called into question as he has filled his administration with members of Congress and Wall Street executives, including Mr. Cohn, who retired as president of Goldman Sachs Group Inc. to join the Trump administration.

 

Adding to the potentially difficult optics for Mr. Trump, he will sign the actions on the same day he meets with a group of business executives, including J.P. Morgan Chase & Co. Chief Executive James Dimon and BlackRock Inc. CEO Laurence Fink. Asked about the potential political pushback because of his Wall Street past, Mr. Cohn said the administration’s goal of deregulating financial markets “has nothing to do with Goldman Sachs.”

 

“It has nothing to do with J.P. Morgan,” he said. “It has nothing to do with Citigroup. It has nothing to do with Bank of America. It has to do with being a player in a global market where we should, could and will have a dominant position as long as we don’t regulate ourselves out of that.”

The changes Cohn described are sure to face a fight from consumer groups and Democrats, who say postcrisis regulations are protecting average borrowers and investors from abusive practices, while making the financial system more resilient and bailouts less likely.

This path also may create political problems for Mr. Trump, whose campaign was successful in swaths of the Midwest where homeowners were hit hardest by the housing crash sparked by the financial crisis.

Meanwhile, asked about the potential political pushback because of his Wall Street past, in his WSJ interview Cohn said the administration’s goal of deregulating financial markets “has nothing to do with Goldman Sachs.”

“It has nothing to do with J.P. Morgan,” he said. “It has nothing to do with Citigroup. It has nothing to do with Bank of America. It has to do with being a player in a global market where we should, could and will have a dominant position as long as we don’t regulate ourselves out of that.” Cohn said existing regulations put in place by Dodd-Frank are so sweeping that it is too hard for banks to lend, and consumers’ choice of financial products is too limited.

Democrats and consumer groups have pushed for tighter controls on banks and other lenders, particularly after the subprime mortgage crisis that helped fuel the global financial crisis. But Cohn said that many of the postcrisis rules haven’t solved the problems they were supposed to be addressing. He said, for example, that there still isn’t a solid process to safely wind down the collapse of a giant faltering financial company or to ensure that those firms have access to short-term liquidity.

“I’m not sitting here saying we want to go back to the good old days,” Cohn said. “We have the best, most highly capitalized banks in the world, and we should use that to our competitive advantage,” he added. “But on the flip side, we also have the most highly regulated, overburdened banks in the world.”

Cohn also laid out a road map for how the Trump administration plans to target new financial rules. He said the Treasury Department would lead an effort to overhaul mortgage-finance giants Fannie Mae and Freddie Mac, which were put into government conservatorship after the crisis. He also said that the White House wouldn’t need a change in the law to redirect the mission of the Consumer Financial Protection Bureau, created by the 2010 law and which governs things like mortgage and credit-card rules. (Please see related article on B10.)

He suggested the White House could influence the mission of the bureau, set up as an independent agency, by putting a new person at its helm to replace Richard Cordray, the agency’s director. Asked about potential changes at the agency, he said, “Personnel is policy.”

* * *

Trump said repeatedly during the presidential campaign that the Dodd-Frank overhaul law was preventing banks from lending, which he said made it harder for consumers to access credit and get the economy to grow. Financial analysts have had mixed views on this assessment. Some believe that low demand from consumers has hurt the ability of banks to lend, and low interest rates have hurt the returns banks make on these loans. But smaller banks have said they are dealing with a crush of new regulations spurred by Dodd-Frank, something regulators have struggled to address.

Cohn didn’t specify how all of these regulations should be rewritten, but he said that financial markets have made their own corrections and that the environment that fueled the financial crisis no longer existed. He said, for example, that even if mortgage restrictions are rolled back, it doesn’t mean that there would be another boom in the subprime lending market. That is because, he said, those loans can’t be securitized and sold like they were before the financial crisis because the market for those products isn’t the same.

“We don’t want to do it an unregulated way,” he said. “We want to do it in a smart, regulated way.”

Translation: we want our bubble, we want to be able to securitize, package and sell it, we want to offload risky exposure to momentum-chasing retail investors and, potentially, widows and orphans.

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SharkBit's picture

Next up, Eliminate FATCA.

Croesus's picture

Glass-Steagal, anyone? 

I doubt the banks will be passing the regulatory cost savings down to us...it'll just mean fatter bonuses for those poor banksters...

MarkD's picture

Yipeeee..........I want to be able to borrow $600k to buy a $200k house. Can't wait. You go Trump. WIN!!!

FreezeThese's picture

He'll also be tweeting, firing off at Arnold and Iran ... never been a worse time for a child in Office, nor to not own gold

 

If we make it through this ... I motion for a 6 month quiet period before the Democratic nominee takes office

BabaLooey's picture

Crytard much?

Hey LOOK! - Your boy Soetero is wearing a ball cap backwards on his nappy head - go worship that.

cloud_boost's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do,... http://bit.ly/2jdTzrM

Whoa Dammit's picture

There are many things in this country that should be less regulated, but banking ain't one of them. 

boattrash's picture

Keep in mind that most "legislation" actually does the exact opposite of its title.

Dodd-Frank was good for breaking the backs of small, local banks so the Big 5 could buy 'em up.

TuPhat's picture

But the big guys will love cheating the small investors as usual.  Thank you very much Trump for making the swamp bigger.

boattrash's picture

"But the big guys will love cheating the small investors as usual."

So do the casinos. That's why I don't play/rely on either for my income.

Joe Davola's picture

...swaths of the Midwest where homeowners were hit hardest by the housing crash sparked by the financial crisis

Is this true?  I have been under the impression the worst hit were California, Florida and other high flying housing markets - which typically doesn't include the midwest.

BullyBearish's picture

That swampy thingy is getting BIGGER...

 

Notice the emotional, feel-good items keep the "fans" enthralled while the important items (Iran, banking regulation withdrawl, israel settlement hand slap) are snuck in to F*&k us...Same as it ever was

https://www.youtube.com/watch?v=I1wg1DNHbNU

 

curbjob's picture

When fascism comes to America is will be announced with a hashtag and frontran  by wilbur ross.

swmnguy's picture

Did you mean to use the past tense?

Rik Haines's picture

"That swampy thingy is getting BIGGER..." 

Upvoted for using the phrase "swampy thingy" :) 

Obadiah's picture

Housing markets in Nebraska are still pretty hot for the 200k to 400 range

Ex-Oligarch's picture

Perhaps by "hit hardest" he means that the bubble in the Midwest hasn't reinflated as quickly?

balolalo's picture

hahaha!

YEAH THOSE POOR BANKSTERS....

they were barely making enough scratch.  

drain the swamp?!?!

hahaha!

thanks orange jesus.  thanks. 

AndSoItBegins's picture

It hasn't one to effect yet. He is stopping it from being implemented. It was another nanny state regulation to reduce choices and we know how everything the government touches turns to sh*t while they tout how much they're helping.

Lugnut's picture

Time for some new gators in the swamp. Trust me, they'll be yuuge!

ersatz007's picture

Will we ever see a bankster go to jail I wonder................

ejmoosa's picture

Small investors need to provide their own regulation by doing their OWN due diligence and knowing what they are investing in.

It's time to be responsible for ourselves.  

boattrash's picture

How in the fuck could that get a down-tic, sloppy trigger finger on a mouse?

ersatz007's picture

I'm all about this personal responsibility and due diligence you talk about provided the BANKSTERS are held to this same standard next time they blow a bubble and crash the economy...

 

which is to say, regardless of how much personal responsibility I take for myself and no matter how much due diligence I perform when investing/buying a house, etc...it doesn't mean anything if these fucks get bailed out with MY TAX DOLLARS when they make a mistake. 

Utah_Get_Me_2's picture

No one forces small investors to gamble their money. It's a choice. 

ersatz007's picture

Ummm... I guess you weren't around for the bail-outs we gave to the banks?  That money came out of YOUR POCKET, MY POCKET, and everyother upstanding TAX-PAYING CITIZEN's pocket.

So someone gambled, lost money, and the tax payer covered the gambling loss - BY FORCE - in the form of taxes.

New_Meat's picture

yep, "Frank-Dodd" or Frod, was in fact wildly successful in consolidating size into te too big to fail banks.

Barney Frank

Chris Dodd

Defense rests.

chunga's picture

Dodd*-Frank = fake overhaul.

It isn't funny but I still can't think of this without laughing: A national bank, WF, creates 2,000,000 criminally fraudulent accounts, admits no wrongdoing, and settles with CFPB for what is called an "aggressive sales tactic".

* Chris Dodd is one of the scummiest humans to ever walk this earth.

cheka's picture

as if the big nyc banks follow any rules coming out of dc

AldousHuxley's picture

GS up 30% in last 3 months....up 4% just today breaking  the highest on record.

 

Banks back to prop trading Jon Corzine style with client's deposites.

Also, will advise you to buy 401k funds charging 1% when Harvard and Calpers are all moving away from actively managed funds. Retail investors will be sold to.

 

Despite Wells Fargo scandal with fack customer accounts, their market cap also hitting all time highs fully recovered from the scandal just few months ago.

 

Makes the ex-goldman TARP head Neal Kashkari sound like a legit Fed Reserve regulator. Perhaps he was kicked out of the tribe for being a  Hindu...not can't have that in the house Cohens built

"...as head of the Minneapolis Fed in early 2016, Kashkari urged Congress to consider bold rules, including breaking up the largest banks or turning banks into "utilities" by creating huge cash cushions so they can't fail. Such rules would go further than the post-crisis Dodd-Frank regulations."

 

boattrash's picture

Great post Aldous! Thanks for the insight.

tankster's picture

So much for being tough on banks...

Next???

BabaLooey's picture

1) TOTAL RE-WRITE of Dud/Fag

2) RE-INSTATEMENT OF GLASS/STEAGALL

3) PROSECUTE  - AND IMPRISON - BANK SHENANIGANS. 

FINES - BANISHMENT - AND PRISON TIME FOR OFFENDERS

That would go a long way to resolving this bucket of fuck.

glenlloyd's picture

Hmmm, can't say I like this bit of news. Would be a lot better I think to scrap Dodd-Frank completely, since the creation of it was largely left to the banks anyway, and start over.

If you get rid of the fiduciary rule, which was like the only end consumer protection in the whole fucking mess, then just dispense with it completely.

Politicos seem to continue to dance around the idea of reinstating Glass-Steagall, which is ridiculous, it was a perfectly legitimate protection that kept banksters from using private deposits as play money knowing that if any losses were suffered and the bank went down that FDIC would cover it.

FDIC protection is not something that should be accorded to gambling institutions.

photonsoflight's picture

The executive branch can only sign or veto legislation.  A few executive orders changing rules is the most Trump can do. This is a job for Congress. They need to start serving the American people. NOW.

Lugnut's picture

I might have missed the part of the story where they said they were going to re-write Dodd-Frank to make better oversight rules.

SafelyGraze's picture

if only there were a way that we could sweep all retirement accounts into our off-book vehicles instantly

that would be great

and would simplify the very cumbersome and antiquated system currently in place

hugs,
the fiduciaries

 

NidStyles's picture

I've got nothing to say about this, as I haven't read any of the newer rules yet, so I have no idea what would be changing.

 

I did however want to take this slot and time to point out one thing.

This guy's name is Cohn. One letter away from Cohen.Those of us that are knowledgable about Jewish society and the way it's structured know what that means. It means this guy is a religious leader of the Jewish Tribe. He's one of their authorities, like we say General Mattis is one of our's.

 

Why are there so many Jews telling us what to do? Do these people not have their own country now? Isn't it time for them to go live in their own country instead of being in ours telling us what to do and how to live?

 

Am I seriously the only one here tired of hearing from Jews, Mexicans and Arabs how evil I am for supporting my Constitution, and the freedom of my people? How evil I must be, because I willingly point out that people from different races, tribes, and cultures will not have the same position, and often enough will have political and personal wishes and desires that are not in line with mine or other traditional Americans?

 

My family has been here since the 1600's. I had relatives that fought in The Revolution. Why is that I have no voice, but these people whom are not full citizens or recent immigrants are allowed to push those of us that have been here just as long or myself around as if I owed them something for letting them come here?

 

They are guests in MY country, not OUR country. This country only belongs to the descendants of the Founding Stock. Everyone else is let in on our charity and willingness to provide aid. I as a member of the founding stock and sick and fucking tired of hearing these people kvetch and cry about everything and their endless manipulations of my country to their sole benefit.

 

To you invaders, get out. You're not welcome here anymore. We are tired of dealing with you and your bullshit. Go live in your own damned countries. Go fuck over some other people so we can get back to doing what Europeans do. Explore and push boundaries.

CuttingEdge's picture

This guy's name is Cohn. One letter away from Cohen.

It's also one letter away from the word Con.

Dr. Acula's picture

"Con" would be a fitting name for fractional reserve banking, aka bailment fraud

Deathrips's picture

I hear the coneheads are from france.

 

Fuck cultural marxism and its perpitraitors.

 

RIPS

BarkingCat's picture

Are you an Apache or perhaps Iroquois??

MEFOBILLS's picture

Are you an Apache or perhaps Iroquois??

 

if you want to play that bullshit card, there is evidence that white people were also on the North American Continent, in some cases pre-dating Siberian types (mongoloids). The native indians were not bearers of high civilization.

There was a weaver culture in Florida that was caucasoid, and there are Viking artifacts in the North East.

The native Indians never developed a wheel, or bricks for making houses.  They never made paved roads, or even invented a sail.  They had no real writing to convey ideas, nor did they have any sort of literature.  Think about the barabarism of taking a scalp.  Some indian tribes were cannibalistic, including the Apache.

Superior Cultures should displace barbaric cultures.  Maybe if an Apache ate parts of your daughter, you might have a different opinion?

The Jewish culture is not superior, it is parasitic.  Bankster mechanics are all about taking rents, or unearned income.  They will couch the terms in all sort of legalise and hypnotic smoke screens, to then confuse the trusting sheeple.

White people, especially nordics, evolved to high trust - mostly during the fourth ice ages.  Calculating parasitic tribes are incompatible elements.

A healthy society will try and shake off its parasites.

The author makes this point, and it cannot be argued with:

Translation: we want our bubble, we want to be able to securitize, package and sell it, we want to offload risky exposure to momentum-chasing retail investors and, potentially, widows and orphans.


Philthy_Stacker's picture

Oh my!

"if you want to play that bullshit card, there is evidence that white people were also on the North American Continent"
Really? I'm white and I just don't see the evidence of a 'thriving Caucasian' civilization anywhere in NA.
Knights Templar were probably in Canada in the 12th Century, or earlier, hiding gold. The Vikings made land by 'accident or exodus' but clearly the majority of DNA can trace the native population back up the West coast to the most Northern route along an ice bridge, just prior to the last melt. North American Native culture was expansive and thriving until Europeans arrived with their guns and germs.

"Superior Cultures should displace barbaric cultures. Maybe if an Apache ate parts of your daughter, you might have a different opinion?"
WTF? Replace hunting and gathering with Industry (pollution), Conquest (for conquests sake), enslavement (bricklaying, farming, self-service)

As far as the wheel, no society has ever claimed the wheel, it's just there. (Think Anunnaki)

Conquering America only served the already bloated desires of rich Europeans. That's what the revolution was for. The transfer of power from Europe to the Colony, between the Plutocrats of England and elsewhere and the newly minted Colonist Plutocrats.

The massive coast to coast rail system that created modern America was financed by the Rothchilds. Nothing has changed ...

whip_sawed's picture

Add to the mix:

“The Negro arrived in America as a slave in 1619, just one year before the Pilgrims arrived at Plymouth in search of freedom.”

11b40's picture

I see we have a few money changers warming up their down arrows.

MEFOBILLS's picture

You know you are right over the target when you take flack.

 

Then our friends point out that parasitized white brains are responsible for "capitalism's" excess, when our (((friends))) invented stock market capital in Amsterdam.  They then went on to parasitize Britains brain, especially starting with bank of england in 1694.

Point a finger and three point back at you. 

All of the races are capable of excess.   But, the races that develop "creeds" that are parasitic need to be called out.  If you come from a culture that actively promotes these sort things (Talmudism, and Islam especially) then expect to be resisted.

With regards to the Indians in America, some of the northern tribes had advanced law.  Who knows, maybe if left alone for tens of thousands of years they may have built a high culture.  Then again, they may have eaten each other and disappeared.   They most likely would have never made any advance, as they showed no progress in their long history.

Most of you have been watching TV shows since birth describing the wonderful native american.  Why don't you read some actual history?  Many indian tribes would capture other tribes, including whites, and then tie them to wooden frames.  Then they would torture the "enemy" for weeks until they died.

It was their form of entertainment.  Think about that act as well, torture for entertainment - it must have been FUN!

Actual real history is also not kind to our ((friends)).  There is a reason they were kicked out of countries almost a 100 times. 

They are running their slick usury game against america.  It is a very sophisticated construct, an evolutionary construct designed to profit an in-group while reducing the out-group.

 

Thought Processor's picture

 

 

Everything seems so much easier when catagorized into overly broad and general groups.  

 

ie:  

whites are smarter, Jews are bad, indians are barbaric, blacks are inferior, and on and on.

 

Eventually you grow up (hopefully) and you realize that these broad generalizations were only created by those who either did not understand the diversity of life or did and were trying to exploit it against those who did not.  

 

Life is not a zero sum game.  In order for me to prosper you do not have to lose.  It can be win win though in order to be so everyone actually has to work together to make it so.  If one side unfairly exploits the other then the game quickly deteriorates.

 

This has all been proven out in game theory exercises done long ago.  It's actually not that complicated.  But none of this can be commanded by some top down authority.  It has to be chosen by those involved, who have come to the conclusion usually after having learned that all else has failed.

 

Perhaps we are collectively, as humans, still learning this.  And if we fail to learn this and then pass what was learned to the next generation then the loop simply repeats itself (as it has).

 

Food for thought.

 

 

MEFOBILLS's picture

Zero sum cultures are endemic to the middle east.

They won't even let somebody from another family serve as baby sitters.  Why import ME people into your society, they bring with them bad wetware.

This sort of work together, we can both profit... comes out of the North Western Europe.  The Greeks to some degree had it as well.  Christianity encourages high trust behavior.  Athiests can have high trust, so it is likely genetic.  Does Islam or Judaism encourage high trust behaviors - no, they are in-groups.

I'm going to keep pointing out that only certain tribes have high altruism and high trust.   The Japanese have a high trust society, but are not necessarily altruistic toward other races.  Both of these factors altruism + trust, plus a degree of intelligence, are required for higher civilization.  

Man will slide back to being an animal unless these bad thought constructs are resisted.  Some races have not evolved along pathways conducive to building high civilizations.  Are Austrailian aboriginals going to design interstellar engines so man can travel the stars?  No way - they are dumber than stumps.  Oopps that is racist.  I made a thought crime.  Sue me.