President Trump, should it be so, could be gunning for a lot of folks, not least of them a pair much in the spotlight of Wall Street: Dodd and Frank.
Reuters noted Wednesday that the Republican nominee (that is, presumed) would look to “dismantle” just about all of the financial reforms that had been mandated and institutionalized up and down Wall Street by the legislation.
The reason? As Trump told the newswire, the reforms themselves had “made it impossible for bankers to function. It makes it very hard for bankers to loan money for people to create jobs, for people with businesses to create jobs. And that has to stop.”
How to make it stop? The Donald says something akin to a dismantlement should do the trick. The legislation itself has put a number of measures in place that are akin to emergency, or even contingency, plans, among them the establishment of “living wills” which lay out how to wind down operations in a true crisis. In addition, banks, with their relatively more cautious reliance on debt funding vehicles have been a bit more loath to part with funds.
(But we here at PYMNTS note that necessity, as the mother of invention, has made it possible for not a few young tech upstarts to step in and try to fill the void.)
There’s also the ongoing controversy over the funding of, and even existence of, the Consumer Financial Protection Bureau. The financial industry itself has pushed for scrapping the laws, on the assertion that it has cost millions of dollars to comply, and that capital could have been put, arguably, to better use. The banks have been treading more cautious ground, with an eye on revamps rather than wholesale overhauls.
Now, many of Trump’s statements on the matter have been declarative statements without roadmaps or details behind them. But other conduits to reform may be brewing. As Reuters noted, Republican Rep. Jeb Hensarling, who heads the House Financial Services Committee, has said that he would have a financial plan of his own in the next few weeks.
Predictably, opponents of striking down Dodd-Frank state that the door might be left open to a repeat of some of the egregious financial activities and lending decisions that predated the financial crisis.
The trumpets of partisan battle over Dodd-Frank, on Capitol Hill at least, are muted for now, but growing louder.