While the effects of President-elect Donald Trump’s decisions about regulatory reform are still being drafted, one thing remains certain: The Dodd-Frank Wall Street Reform and Consumer Protection Act — and the Consumer Financial Protection Bureau (CFPB) that it created — most certainly will face substantial revisions. This includes the possible rollback of rules and regulations that Dodd-Frank’s critics regard as excessive constraints on the private sector.
What will these reforms look like?
The Financial CHOICE Act, a piece of legislation championed by Jeb Hensarling, chair of the House of Representatives’ Financial Services Committee, offers a preview of sorts.
The bill proposes transforming the Office of the Comptroller of the Currency into a five-person commission and subjecting it — along with the Federal Deposit Insurance Corp. and the Federal Reserve’s non-monetary policy functions — to the congressional appropriations process. In addition, the bill would require banking regulators to submit proposed rulemakings to congressional review and cost-benefit analysis.
These structural changes, designed to make regulators more accountable, are a change from the long-held bipartisan consensus about ensuring banking regulators have a safe—and relatively independent — distance from Washington politics.
Still, the landscape facing the Trump administration remains nuanced and complex. Legislators will encounter a complicated environment that won’t allow them to roll back the clock on the reforms spurred by the financial crisis of 2008-2009.
As the Trump administration transitions into power, we will continue to monitor the policy and legislative developments likely to affect Dodd-Frank’s future.