Trump ignites political fight over U.S. banking law reforms
U.S. President Donald Trump on Friday ordered reviews of major banking rules that were put in place after the 2008 financial crisis, drawing fire from Democrats who said his order lacked substance and squarely aligned him with Wall Street bankers.
Though the order was short on specifics, financial markets embraced Trump's signal that looser banking regulation is coming and pushed bank stocks higher. The Dow Jones U.S. Banks stocks index closed up 2.6 percent. .DJUSBK [.N]
At a White House forum on Friday with U.S. business leaders, including JPMorgan Chase's (JPM.N) CEO Jamie Dimon, Trump said his administration expects "to be cutting a lot out of Dodd-Frank."
Trump "can’t make any substantial change in the financial reform bill without Congress,” Frank told Reuters. "The language in the order doesn’t do anything. It tells the secretary of the Treasury to give them something to read. The tone of it is to weaken the bill.”
Trump and other critics of the Dodd-Frank law say its regulations have hindered lending. At the meeting with CEO's on Friday Trump said, "I have so many people, friends of mine, that have nice businesses that can’t borrow money...because the banks just won’t let them borrow because of the rules and regulations in Dodd-Frank."
Trump's adviser leading the deregulation effort, National Economic Council Director Gary Cohn, was previously a top official at Goldman Sachs (GS.N). Billionaire investor Carl Icahn, meanwhile, is counseling Trump on regulation across the government.
Meanwhile, a memo tells the Labor Department to review a "fiduciary rule" for brokers offering retirement advice that was finalized in 2016. While early reports said Trump wanted to push off the rule's implementation, originally slated for April, by 180 days, the order did not mention any delay. The Labor Department late on Friday said it was considering legal options for delaying.
One order signed by Trump requires the U.S. Treasury Secretary to submit possible regulatory changes and legislation modifying Dodd-Frank in 120 days, according to a White House official. - Reuters
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