Post-2008 Crisis Banking Regulations Will Be Rolled Back
US President Donald Trump says he will cut banking regulations, starting the process with an executive order.
Trump signed an order pushing the Treasury Department to review the Dodd-Frank Legislation that was passed in the aftermath of the 2008 financial crisis.
The regulations were put in place to prevent a recurrence of the crisis and increase bank regulation, and was signed into law by the Obama Administration.
Critics of Dodd-Frank say it has reduced lending and available credit in the system, and hurts smaller banks.
Said Trump, “We expect to be cutting a lot out of Dodd-Frank.”
In an interview with the Wall Street Journal discussing the upcoming banking regulation changes, Gary Cohn, Director of the White House National Economic Council, said the move will help the United States achieve a “dominant” role in the global banking sector.
Added Cohn, “Americans are going to have better choices and Americans are going to have better products because we’re not going to burden the banks with literally hundreds of billions of dollars of regulatory costs every year.”
Trump is walking a difficult line here. While reducing regulation and increasing lending – especially for smaller banks – could help low-income and middle class people get access to more credit, any move that is seen as being pro-banking industry will face significant levels of doubt from Trump’s base of supporters.
Democrats will also pounce on any sign Trump is cozying up to Wall Street.
In the campaign, Donald Trump regularly tied Hillary Clinton to Wall Street Banks, and said politicians and banks were taking advantage of the American people. If it begins to look like he is doing the bidding of the banking industry, he could cause significant anger among some of his supporters.
That said, if the economy grows and lending expands for individuals of all income levels, there will be widespread support for changes that are seen as beneficial.
In the end, it’s all about the money.
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