Mid-Term Elections May Keep Financial Reform In Place

The Trump administration and Carl Icahn, Trump’s chief advisor on financial regulation, are squarely opposed to the financial regulation put in place under the Obama administration, but whether or not they may want it repealed isn’t as cut and dry.

That’s according to Barney Frank, the chair of the House Financial Services Committee from 2007 to 2011 when Congress enacted the Dodd-Frank financial reform act. Frank penned an opinion piece on CNBC in which he weighed in on what he thinks will happen with financial reform laws now that Trump has taken office. While he said Republicans have long been against the reform, which they think is heavy-handed, their constituents support it, making it harder for them to repeal the laws. After all, during the Obama years, they could let their opposition be known without having to worry about any of the legislation actually being repealed. But now, with the Republicans in the majority in the House and Senate, those rules could be weakened or eliminated altogether.

“The single biggest deterrent to Republican congressional action to do away with the changes made by the Wall Street reform bill for the past four years is its popularity with the public,” wrote Frank. “And unlike health care, support for that law cuts across party lines. Cutting back the power of the Consumer Financial Protection Bureau, re-deregulating derivatives, restoring the full power of lenders to make imprudent mortgage loans while retaining no responsibility for them do not poll well.”

Frank pointed to the Wells Fargo account scandal that was brought to life by the CFPB. Republicans up for reelection in 2018, he said, can only imagine the election ads if they vote to dismantle the CFPB or get rid of other financial reform. Frank conceded that there is a bipartisan consensus to make some changes to the law for small and mid-sized banks without diminishing the power to protect consumers. Frank noted that, since Trump has the power to appoint the people responsible for exercising the power of the law, “they can substantially weaken it without legislating.”