In examining what was the top of mind news amid regulatory reforms and action, the biggest event (stateside at least) was, of course, the legislation approved by the U.S. House of Representatives to roll back tenets of the 2010 Dodd-Frank Act.
Passed strictly along party lines (with Republicans voting aye, Democrats voting nay), the vote was mostly symbolic in nature, as the bill, the Financial Choice Act, has little chance of being passed “as is” in the Senate, which is also working on its own legislative overhaul targeting financials.
As has been noted extensively in the press, President Donald Trump and Republicans have long stated since the 2016 campaign that they would seek to gut the Dodd-Frank Act and unwind a large swath of regulations.
Among the key tenets of the newly-passed Act, there would be the elimination of the orderly liquidation authority, which would help larger financial institutions unwind in the wake of a financial crisis. Separately, the Act would also eliminate the so-called “fiduciary rule,” which mandates that brokers must act in the best interest of their clients when offering investment advice. And, seemingly always in the news, has been the Consumer Financial Protection Bureau (CFPB), which, under this piece of legislation, has proposed that the President can fire the Bureau’s director at will — a key point of contention wending its way through courts and beyond.
One key appointment in shaping de-regulation, as it may be handed down in Congressional legislation, also came this week as President Trump named Joseph Otting the new Comptroller of the Currency, with, as CNBC.com noted, key oversight of chartered banks.
Otting had served as CEO from 2010 to 2015 of OneWest Bank and worked with current Treasury Secretary Steven Mnuchin. As with all nominations, a Senate confirmation is necessary, and should that happen, Otting would have at least some interplay with efforts to scale back Dodd-Frank.
Also in the halls of Washington, D.C., the CFPB stated that — in a reversal of earlier positions stated by the Bureau — first-party creditors (such as banks) are, in fact, responsible for the accuracy of information that is germane to consumer debts. That policy decision, announced by Director Richard Cordray, would mark a shift from earlier contention that third-party debt collectors were, in fact, on the hook for ensuring and maintaining accuracy in those reports.
On a bit of a larger stage — think of the world stage in this case — the U.K. saw a surprise outcome in an election that had Prime Minister Theresa May looking for a boost to her mandate for a “hard” Brexit.
That, of course, didn’t happen, as May’s Conservative Party became a minority literally days before negotiations on the terms of the U.K.’s withdrawal from the EU were bound to begin. The roadmap has become convoluted, while May has said that negotiations will proceed as planned. The issue now is “hard” vs. “soft” Brexit, with the former as a rather complete severance from the EU, and the latter a series of likely compromises on items as diverse as “passporting,” taxes and trade agreements.