President Trump on Friday began scaling back banking regulations that reshaped the financial industry after the 2008 financial collapse.
The president signed an executive order directing a sweeping review of the Dodd-Frank Act, the 2010 law that was one of the most significant changes to financial regulation since the Great Depression.
The act subjects the nation’s largest banks to a series of regulatory requirements, including annual “stress tests” to ensure they can survive another economic crisis. Additionally, it dictates how much capital they must keep in reserve and limits their trading operations.
Dodd-Frank also created a new consumer-protection bureau to root out deceptive financial products.
Under Trump’s directive, the Treasury secretary will recommend changes that align with the administration’s goal of easing burdens on the financial industry.
A second order the president signed will delay an Obama-era rule that requires financial professionals who charge commissions to put their clients’ interests first when giving retirement advice.
“Today we’re signing core principles for regulating the United States financial system. It doesn’t get much better than that, right?” Trump said at the signing.
Experts predicted Trump’s blue-collar backers would not be angry at the move.
“I don’t think they will. The fact is that Trump has taken a number of steps that don’t really fit with his populist rhetoric, ” Julian Zelizer, a professor of public affairs at Princeton University told The Post.
Others agreed the president would not face a backlash for weakening the Dodd-Frank Act.
“I don’t think anyone expected him to leave Dodd-Frank alone, so this was expected,” said Matthew Hale, a professor at Seton Hall University.
“It can be framed as a technical change and one that frees business from government regulations. Both of which make people’s eyes glaze over.”
University of Virginia Professor Larry Sabato added, “I doubt Trump’s blue-collar backers will defect because Wall Street is being given some filet mignon. But Trump has to deliver some pork chops to the Rust Belt — a lot of good-paying jobs — in the next couple of years.”
Veteran New York political consultant Hank Sheinkopf disagreed.
“People who don’t like Wall Street are going to be unhappy. People who lost big money on Wall Street in 2008 are going to be very unhappy,” he said.
With Post Wires
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