One of the catalysts behind the surge in bank and financial stocks since the Trump victory, has been the market's expectation that the new administration will repeal Dodd-Frank, and thus undo years of regulatory hurdles that have prevent banks from engaging in everything from prop trading to levering substantially higher, and have cost them billions in legal fees and settlements.
However, the market may be getting ahead of itself. In an interview Sunday on NBC’s “Meet the Press, Senate Minority Leader Chuck Schumer, drawing a line in the sand for the next administration, said he has the votes to stop President-elect Donald Trump from repealing the Dodd-Frank Act and “the rules we put in place to limit Wall Street.”
Schumer, who was picked by Senate Democrats to serve as minority leader following the retirement of Harry Reid, said he expects that the Senate’s Democratic minority would get help from Republicans in a fight to preserve Wall Street regulations: “We have 60 votes to block him,” Schumer calculated.
Cleaning up the swamp in Washington. These are things that Democrats have always stood for, and frankly, Republicans have always been against. So we're going to challenge President Trump to work with us on those issues where we can. If he doesn't, he'll be breaking his promise to particularly the blue collar workers, many of whom voted for him, on those particular issues.
But on issues where our values are at stake, where the president goes in a divisive direction, where his campaign did before, we'll go against him and with everything we've got. We're not going to repeal or help him repeal Obamacare. We are not going to roll back Dodd-Frank. I think they should forget about that. We have 60 votes to block them.
Among his campaign promises, Trump has said he would scrap Dodd-Frank. Following Trump’s victory on Nov. 8, his transition team said it will be "working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation.”
In his interview, Schumer also predicted Trump would face defeat if he tried to repeal Obamacare, but he did express support for “dramatic change” in trade laws and for closing loopholes in the tax code, ambitions that may align with Trump’s. “When we oppose Trump on values or this presidency takes a dark, divisive turn, we’re going to do it tooth and nail,” Schumer said in another interview on ABC’s “This Week With George Stephanopoulos," broadcast Sunday as reported by Bloomberg.
Schumer also touched on the topic of Trump's supreme court appointments, warning that if Trump "doesn't nominate a mainstream candidate, we're going to go at him with everything we've got ... Because this is so, so important" including a filibuster. While Senate Majority Leader Mitch McConnell had suggested doing away with the filibuster, Schumer said Republicans "don't come with clean hands, having delayed Merrick Garland for a whole year."
Schumer also told "Fox News Sunday" in an interview taped on Friday that he and Trump had spoken twice since the election, including once about the possibility of "a major infrastructure bill." Trump on Sunday morning tweeted “I have always had a good relationship with Chuck Schumer. He is far smarter than Harry R and has the ability to get things done."
The sentiment, however, does not appear to be shared. In an interview with Politico posted yesterday, Schumer said that Trump “was not my friend. We never went golfing together, even had a meal together. He’s called me, we’ve had civil conversations a couple of times. But I’ve got to see what he does." And, incidentally, so does the rest of America.