WASHINGTON — President Trump on Tuesday reiterated his pledge to roll back the Dodd-Frank Act and replace it with “something else," although the prospects of such a legislative overhaul remain remote.
Speaking to the press after a meeting with a group of CEOs from several industries, Trump made a series of wide-ranging remarks about the actions he intended to pursue to make the U.S. more business-friendly, including reducing the burden of financial regulations on the financial sector.
“We are going to eliminate wasteful regulations, which we’ve already done, probably 25%,” Trump said. On Dodd-Frank, he added: "I’m very happy because we’re really doing a major streamlining and perhaps elimination and replacing it with something else. But that will be the minimum."
“We’re doing a major elimination of the horrendous Dodd-Frank regulations,” Trump continued. “Keeping some, obviously, but getting rid of many. And we’re going to put many millions of people back to work, the banks will be able to lend again.”
Trump has long been critical of Dodd-Frank, the landmark financial regulatory law passed in 2010 by a Democrat-controlled House and Senate and signed by President Obama. In January the president vowed to “do a big number” on Dodd-Frank. He later signed an executive order directing the Treasury Department and other financial regulatory agencies to examine their regulations and identify ways to streamline and even eliminate unnecessary regulations.
His comments Tuesday signaled his desire to eliminate the law altogether. But the financial services industry and top Republicans are increasingly tempering expectations for a sweeping legislative overhaul. While House Financial Services Committee Chairman Jeb Hensarling, R-Texas, is expected to unveil a retooled version of his Financial Choice Act, Senate Banking Committee chairman Mike Crapo, R-Idaho, is more focused on narrower, consensus-oriented bills that can pass both houses with bipartisan support — a strategy Hensarling said he would not obstruct.
Trump's criticism of Dodd-Frank and other post-crisis regulations echoed an argument that has gained traction among congressional Republicans and others in the business community, namely that the rules are stifling bank lending and, in turn, small-business growth.
“So many people come to see me, I see them all the time, small businesses, they’re unable to borrow from banks,” Trump said. “They never had a problem five, six, seven, 10 years ago. They had great bankers, they had great relationships. Now they can’t borrow, and we’re going to let the bank loan them money and they can build their businesses.”
His comments come a day after Federal Reserve Chair Janet Yellen said that by most measures, bank lending has grown in recent years. A disagreement over whether or not bank lending has been inhibited will likely be another flash point between critics of the Obama-era financial regulatory regime and its supporters.
“I don’t think if you look at objective data on lending, that it’s possible to make the case that regulation has simply stifled lending,” Yellen said. “Lending is growing in a very healthy way as the economy has recovered.”