When President Trump took office, he vowed to “do a big number” on the Dodd-Frank Act.

While a much more modest bill is potentially nearing the president’s desk, the narrative that the crisis-era law is being dismantled is suddenly bubbling up once more.

Earlier this week, on the heels of his retirement announcement, Paul Ryan boasted on Fox News that the House is “going to be repealing and replacing Dodd-Frank.”

Ryan said Wednesday that Congress will be "repealing and replacing Dodd-Frank" this year. Bloomberg News

At the time, the comment seemed potentially innocuous — perhaps someone leaning on a well-worn, if inaccurate, phrase in the spur of the moment.

But in light of a report on Twitter this morning that Marc Short, the White House’s director of legislative affairs, used similar language in describing the administration’s near-term priorities, the phrasing is beginning to look more like strategic messaging.


A White House spokeswoman did not respond immediately to a request to comment on or clarify the statement.

The comments in some ways mirror the worst fears of progressives, who warned the bill was a gift to Wall Street and a gutting of Dodd-Frank, in the lead-up to a Senate vote on the package.

Some of the most controversial provisions in the legislation include raising a key Dodd-Frank threshold for heightened regulations from $50 billion to $250 billion, changing how a certain capital cushion is calculated and removing some requirements on data collection used for monitoring discriminatory practices. These provisions have rightly been debated by lawmakers and advocates on both sides of the aisle, but they fall far short of a significant unwinding.

The legislation doesn’t touch, for example, Title VII of the law, which focused on cleaning up the regulation of derivatives, or the creation of the Consumer Financial Protection Bureau — two core aspects of the financial reform law. Nor does it strip the Federal Deposit Insurance Corp. of its powers to unwind a large banking company, another key component of the original law. Supporters of the bill argue it’s primarily aimed at helping small and regional banks.

“Frankly, I think there is less here than meets the eye,” former congressman Barney Frank, one of the law’s namesakes, said in an interview last month about the proposed changes.

In some ways, attempting to overdramatize the bill as a “repeal and replace” is surprising, given that the House is still hashing out whether it will be able to negotiate additional changes to the regulatory relief package or be forced to approve the Senate bill as it stands — which is looking more likely by the day. Top Republican lawmakers have been pushing for the inclusion of additional measures that have garnered some bipartisan backing in the House. Yet lobbyists close to the discussions say that Senate lawmakers, particularly moderate Democrats who gave the legislation necessary support, are standing firm against eleventh-hour additions to the closely negotiated package. They simply don’t want to take another tough vote on the issue. That’s led to some hand-wringing this week as to whether the effort could be unraveling as both chambers hold their ground.

But the shift in tone from senior Republicans might also suggest an end to the standoff over the bill is near. It’s possible, for example, the “repeal and replace” language is being used to provide cover to House Republicans, should a vote be in the offing on the Senate package — a way to frame the effort as a big win for conservatives. Supporters of the bill say they’re hopeful such a vote could be coming in the next few weeks.

Pressure is mounting to get a final deal done — both from trade groups anxious to chalk up a win for their members and perhaps even from the White House itself, observers say. Should Democrats take the House in the November elections, this could be the last significant bill the president is able to sign into law for the foreseeable future. Trump even signaled last week that the banking bill “should be done fairly quickly.”

Others have already called the narrative that the bill is tantamount to unwinding Dodd-Frank, which was taken up by some progressives as the Senate vote neared on the legislation, “demonstrably false.” It remains so even as top GOP officials trot out the line.

Victoria Finkle

Victoria Finkle

Victoria Finkle is editor of American Banker's op-ed blog, BankThink.

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