Trump begins attack on financial regulations

WASHINGTON—President Donald Trump signed two executive orders Friday that begin rolling back Obama-era financial regulations.

After a lengthy battle in Congress, President Barack Obama signed the Dodd-Frank Act in 2010 in response to the 2008 financial crisis, intending to rein in the risky banking practices that hurt millions of Americans. Trump’s first order directs the Treasury Department to review the act, which he called a “disaster,” and loosen regulations. The second order delays an Obama administration directive to the Department of Labor that places regulations on brokers’ ability to help clients with retirement planning.

Both orders came hours after Trump met with 18 of the wealthiest business executives in the country. The president stated afterward that the biggest impediments to economic growth and job creation were regulations on the financial sector. Trump said today’s orders begin to fulfill campaign promises he made to ease government burdens on business.

“We expect to be cutting a lot out of Dodd-Frank, because, frankly, I have so many people, friends of mine that have nice businesses that can’t borrow money, they just can’t get any money because the banks just won’t let them borrow because of the rules and regulations in Dodd-Frank,” Trump said Friday to start his meeting with the business executives before closing the door to the press.

The meeting featured CEOs from companies such as JPMorgan Chase, IBM, General Motors, Walmart, Boston Consulting Group, Boeing, and Tesla. Trump said he expects to have either monthly or quarterly meetings with top business executives to receive their input on how to create jobs and economic growth.

The second order halts what Obama called the fiduciary rule, set to go into effect in April. House Speaker Paul Ryan, R-Wis., equated the fiduciary rule to “Obamacare for financial planning,” and praised Trump for delaying its implementation.

“This regulation is deeply flawed,” Ryan said in a statement. “It would significantly raise the cost of seeking financial advice, making it even harder for families to plan their future and save for retirement.”

Taken together, the executive actions set up a new vision for financial regulations crafted by America’s first billionaire president and an advisory team chock-full of former Wall Street heavyweights.

Trump’s economic council director, Gary Cohn, who retired as president of Goldman Sachs to help the Trump administration craft new economic policy, was the chief architect of the new orders.

He told Fox Business Friday, these new plans are good for everyone, not just large banks and investors.

“The biggest thing we have to fix is that we have to get the United States banking system working again,” Cohn said. “Today, banks do not lend money to companies. Banks are forced to hoard money because they are forced to hoard capital and they can’t take any risks. We need to get banks back in the lending business, that’s our No. 1 objective.”

But Trump’s critics say these executive orders are just one more gift to his friends on Wall Street.

After learning of the president’s executive orders and roundtable meeting with business executives, Sen. Elizabeth Warren, D-Mass., posted a scathing critique on her social media pages.

“Donald Trump talked a big game about Wall Street during his campaign—but as president, we're finding out whose side he's really on,” she wrote. “The Wall Street bankers and lobbyists whose greed and recklessness nearly destroyed this country may be toasting each other with champagne, but the American people have not forgotten the 2008 financial crisis—and they will not forget what happened today.”

Other critics said Trump is taking the wrong approach to financial reform.

“The administration apparently plans to turn over financial regulation to Wall Street titan Goldman Sachs, making it easier for Goldman and other big banks like Wells Fargo to steal from their customers and destabilize the economy,” Lisa Donner, executive director of Americans for Financial Reform, said in a statement Friday. “That betrays the promises Trump made to stand up to Wall Street, and it will have dire consequences if he’s successful.”

Trump cannot rewrite Dodd-Frank without help from Congress, but today he confirmed his commitment to overhauling the law as soon as possible. White House Press Secretary Sean Spicer said Friday Trump will influence Dodd-Frank as much as he can by executive order and will work with Congress to rewrite or repeal the law if necessary.