Now, as his transition team asserts itself, an all-out repeal of the 2010 Dodd-Frank law — Trump called it a "disaster" and a "disgrace" — seems unlikely. But experts foresee a gradual but potentially significant chipping away of key parts of the law. "I don't think it eviscerates Dodd-Frank, but I think it takes away some parts," James Cox, a Duke University expert on securities law, said of the Trump team's approach. The transition team's stated goal is a stark one: "To dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation."
Republicans have long attacked Dodd-Frank and a central component, the Consumer Financial Protection Bureau. The CFPB vastly expanded regulators' ability to police consumer products — from mortgages to credit cards to student loans. Critics say Dodd-Frank and the CFPB went too far to hinder banks from making loans that people and businesses need to spend and hire. Yet many experts say a relaxing of Dodd-Frank's rules — the most sweeping such changes since the Depression — could raise the likelihood of another crisis fed by high risk-taking. Dodd-Frank limits many of the high-risk practices that ignited the 2008 financial crisis and led to a recession that wiped out $11 trillion in household wealth. Taxpayers were stuck bailing out Wall Street giants and other financial firms.
Republican presidential candidate Donald Trump speaks at a campaign rally in Grand Rapids, Mich. Trump pledged in his campaign to throw out what he called stifling regulations, including the financial rules that Congress built to prevent another crisis.
Beyond the CFPB, other elements of Dodd-Frank that could be vulnerable to a Trump-driven attack are:
— The Financial Stability Oversight Council. The council, made up of top regulators, monitors the banking system for any risks that could trigger another crisis. It can label a company as so big and entwined with the financial system that its fall could imperil the economy. That label then puts the company under tighter oversight. Critics say the council, which makes decisions behind closed doors, wields excessive power.
— Rules that critics say especially hurt regional and community banks that had little to do with the financial crisis. Their cost of complying with the new rules is so high, critics charge, as to impede their ability to lend and help fuel economic growth.
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