Watch Live: Trump Signs Executive Orders On Corporate Inversions and Dodd-Frank Regulations

Tyler Durden's picture

As pressure mounts on Trump to post some victories within the totally arbitrary window of the "First 100 Days" of his administration, the President just joined Treasury Secretary Steven Mnuchin to sign a combination of executive orders and memos targeting the reduction of tax regulations and certain components of Dodd-Frank.  As we noted earlier, the executive orders and memos signed today are expected to (i) initiate a review and potential unwind of executive orders signed by Obama in 2016 to limit corporate inversions and (ii) initiate a thorough review of the orderly liquidation authority granted to the Federal Deposit Insurance Corp. (FDIC) under Dodd-Frank.

  • TRUMP: THIS REGULATORY REDUCTION IS FIRST STEP TO TAX REFORM
  • TRUMP: 2 DIRECTIVES WILL REVIEW DAMAGE OF DODD-FRANK REGS
  • MNUCHIN: WE'RE FOCUSED ON ACHEIVING COMPREHENSIVE TAX REFORM
  • MNUCHIN: REVIEW IS THOROUGH AND WILL DELIVER FINDINGS IN JUNE
  • MNUCHIN: WE'LL SEE IF FSOC AND OLA RULES IN PLACE MAKE SENSE

 

For those who missed it, below is our preview of today's signings from earlier.

* * *

Per a statement from the White House, one of Trump's new executive orders will seek to undo tax rules put in place in the last year of Obama's presidency that were designed to limit so-called 'corporate inversions' which allows U.S. traded companies to recognize income in lower cost countries like Ireland.  Per Bloomberg:

Under President Barack Obama, Treasury sought to rein in U.S. companies’ attempts to shift their profit offshore by proposing rules that would curb so-called “earnings stripping” and inversions -- mergers in which U.S. companies transfer their tax address overseas to low-tax countries like Ireland to cut their tax bills.

 

Some of those rules, first proposed in April 2016, sought to restrict lending among subsidiaries of the same corporate parent, a technique that can create income in low-tax countries and tax-deductible interest payments in the U.S. The proposed rules met a barrage of criticism from corporations and tax lawyers, who complained that they went too far by banning common, everyday cash-management practices that have nothing to do with tax avoidance.

 

Amid the criticism, Treasury last October softened the proposed rules to allow cash pooling, a common corporate money-management technique in which excess cash in subsidiaries is swept daily into a single pool. It also delayed a related proposal, which would require companies to extensively document their related-party lending, until Jan. 1, 2018.

Trump

 

Other actions expected today include a memo that will require a review of the Financial Stability Oversight Committee’s designation process for systemically important banks and a review of the orderly liquidation authority granted to the Federal Deposit Insurance Corp. (FDIC) under Dodd-Frank. 

Under Dodd-Frank, the FDIC is granted the power to wind down the biggest banks but Trump's memo is expected to call for a study on whether enhanced bankruptcy authority is a better alternative for failing financial companies.

The 2010 financial-regulation law known as Dodd-Frank established a so-called orderly liquidation authority under which the Federal Deposit Insurance Corp. is empowered to untangle and wind down the biggest banks. Republican lawmakers have said the law doesn’t address the fact that Wall Street firms remain too big to fail, meaning taxpayers will still be on the hook for future rescues.

 

The U.S. House of Representatives earlier this month approved legislation to create a new bankruptcy process for financial companies with more than $50 billion in assets that could allow for a quick transfer of a failed bank’s assets and impose a temporary stay of some contractual rights to give the company time to restructure. The measure aims to address concerns that led lawmakers to approve taxpayer bailouts during the 2008 credit crisis. At the time, the structures of Wall Street banks were considered too complex to go through bankruptcy court.

The orders are expected to be signed around 3pm EST.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Soph's picture

I wouldn't go as far as saying he's worse than Hitlary. That's diving pretty deep into the gutter.

He sure isn't much better though, that much is certain.

TheSilentMajority's picture

Anchor-babies still kosher?

silverer's picture

I've decided I won't pay my mortgage, they pull that shit again. Because if I bail them out, I consider my debt paid.

Phillyguy's picture

Does Trump want a repeat of 2008?

NihilistZerO___'s picture

It's coming whether he wants it or not...

ElTerco's picture

Way to go! Send US tax payments overseas! Now the money spent on taxes is going to be going out the door, so to speak, rather than paying for local services.

Bernie Madolf's picture

Why bother reversing Corp inversions if ccorp tax rate is going to be reduced to 15% and a tax holiday to repatriate?

They must think the rate reduction will fail?

Don't see how this is winning.

pebblewriter's picture

Hmmm...so, making inversions easier is going to help unemployed Americans how, exactly?

I wonder how many of those red state, blue collar workers who voted for Trump would like to have their votes back.

SwaziRed's picture

Hallelujah! It's precisely because of measures like these that Trump's working class muppets voted for him. And for the ability of U.S. mining companies to bribe foreign governments. And to befoul their drinking water. Yay!

Rubes.

Archive_file's picture

Sweet! All the Feds have to do now is capitalize the import/export bank and it'll be full Soviet!

Lastly, they'll hand out Mao suits for all!

aloha_snakbar's picture

Why is he always holding stuff up that he signs? Its like a Vegas show, and I expect to see chorus girls and fireworks at any moment...

SwaziRed's picture

Arrested development. My guess around age nine. His father must've been a real tyrant.

The guy is barely literate. Watch how his speech slows down when he reads from a teleprompter. It's painful to see. That's why he's so proud when he manages to scrawl his name. Like an overjoyed toddler proudly displaying his first 'big boy' doody. Sad.