Dodd-Frank

The banking industry is counting on regulatory relief coming out of the Trump administration and Congress, but there are significant constraints on how much they might be able to deliver.

It's hard enough lobbying for big changes on Capitol Hill, but sometimes it only gets harder when it comes time to actually implement them.

The current partisan war over the Dodd-Frank Act is just one dispute in a broader ideological divide about the government’s role in industry.

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Under the Trump administration, the challenge for the industry is to find the proper balance between supporting post-financial crisis regulations that have worked well and campaigning for reform efforts that have been ineffective.

Critics of Dodd-Frank argue that post-crisis regulations put a damper on lending. But loan growth at regional and community banks has "actually been very strong," says Joo-Yung Lee, head of North American financial institutions at Fitch Ratings.

A vote on a House plan to replace the Dodd-Frank Act may not happen as quickly as originally expected due to limited floor time and other legislative priorities, such as health care reform, that are likely to take precedent.

In President Trump’s first joint address to Congress, he listed several top priorities, including repealing Obamacare and enacting tax reform, but made no mention of reforming the Dodd-Frank Act.

Lawmakers voiced bipartisan support for regulatory relief, arguing that small financial institutions have had to bear the brunt of too many regulations.

As banking leaders gain a more substantial policymaking role, they will have a greater impact if they stake out a clear position in favor of regulations that protect investors and depositors.