Regulation

Trump To Start Taking On Dodd-Frank And Taxes With New Executive Actions

Today in Washington, President Donald Trump is scheduled to sign three new executive actions designed to jump start a review of tax codes and financial regulations — specifically rules set out under the Dodd-Frank financial reforms.

According to reporting, the long term impact of today’s signings remains hazy — but they could potentially change the ways in which companies are allowed to structure themselves as well as scale back regulations on some lager FIs.

The first executive order will give Treasury Secretary Steven Mnuchin authority to “review significant tax regulations issued in 2016” to see if they “impose an undue financial burden on American taxpayers, add undue complexity, or exceed statutory authority.”

There is some speculation that the move could be seen as the first step in appealing rules around the process of inversion — when firms incorporate overseas to avoid U.S. taxes — that were put in place by the Obama administration.

One of the most sweeping tax regulations imposed in 2016 was written by the Obama administration’s Treasury Department and it made it much harder for companies to use inversion to incorporate overseas in places like Ireland so that they could avoid paying U.S. taxes.

Trump’s signature will also grace two new memoranda — though according to the WashingtonPost, both of those memos seem to overlaps with the Treasury department’s current actions.

One will direct Mnuchin to review something called “orderly liquidation authority.”  This review would look at whether an “enhanced bankruptcy authority” would be better for the process for winding down large failing firms than the one established by Dodd-Frank. The review also asks the Treasury to consider whether the liquidation rules “could lead to excessive risk-taking” by financial companies.

The other memo calls for the review of how the Financial Stability Oversight Council designates certain companies for enhanced financial regulation due to their size and scope .  Many financial companies and Wall Street executives have complained about this process.

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