Trump signs order which could end Dodd-Frank banking regulations after Senate votes before dawn on other financial measures

[superbeets]

President Donald Trump is taking his first steps aimed at scaling back financial services regulations, and the Republican-run Congress cast a vote early Friday signaling that it's eager to help.
The president signed an executive order Friday that will direct the Treasury secretary to review the 2010 Dodd-Frank financial oversight law, which reshaped financial regulation after the 2008-09 financial crisis.
But first, the Senate used an unusual pre-dawn vote to approve legislation, 52-47, killing a regulation that has required oil and gas companies to disclose payments to the U.S. or foreign governments for commercial development. The House approved the measure this week, and Trump is expected to sign it.

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The president signed an executive order Friday that will direct the Treasury secretary to review the 2010 Dodd-Frank financial oversight law,

Republicans said the rejected regulation gives foreign competitors valuable information about U.S. firms and would hurt the economy. Democrats said erasing the requirement means big companies will be able to hide questionable dealings with foreign governments like Russia.
Trump pledged during his campaign to repeal and replace the Dodd-Frank law, which also created the Consumer Financial Protection Bureau. A senior White House official outlined his executive order in a background briefing with reporters Thursday.
"Dodd-Frank is a disaster," Trump said earlier this week during a meeting with small business owners. "We're going to be doing a big number on Dodd-Frank."
The order won't have any immediate impact. But it directs the Treasury secretary to consult with members of different regulatory agencies and the Financial Stability Oversight Council and report back on potential changes.

 

[superbeets]

+2


Direction: Steven Mnuchin, who will be Trump's Treasury Secretary once confirmed by the Senate, will be told to review Dodd-Frank

That likely includes a review of the CFPB, which vastly expanded regulators' ability to police consumer products — from mortgages to credit cards to student loans.
Trump administration officials, like other critics, argue Dodd-Frank did not achieve what it set out to do and portray it as an example of massive government over-reach.
Trump will also sign a presidential memorandum Friday that instructs the Labor Department to delay implementing an Obama-era rule that requires financial professionals who charge commissions to put their clients' best interests first when giving advice on retirement investments.
The rule, which was set to take effect in April, will be delayed for 90 days while it's reviewed.
The so-called "fiduciary rule" was aimed at blocking financial advisers from steering clients toward investments with higher commissions and fees that can eat away at retirement savings.
Critics argue the rule limits retirees' investment choices by forcing asset managers to steer them to the lowest-risk options.

 

[SheriffJoe]

In less than a year, literally everything Hussein did will be wiped out and a faded memory.

The community organizer's legacy:

 

[Greenbacks]

 

[JohnnyMac]

I don't remember Trump coming to Ohio, Michigan, and Wisconsin and campaigning on the platform of "Let's turn Wall Street loose again."

 

[ML Dog]

I don't remember Trump coming to Ohio, Michigan, and Wisconsin and campaigning on the platform of "Let's turn Wall Street loose again."

He said many many times that he was going to lessen regulations. Including mentioning Banking specifically several times but then when Kelly-Anne took over from that retard Paul Manafort Kelly-Anne encouraged him to not mention Banking Regs specifically.

It cannot possibly SURPRISE you that this happened, nor should it be surprising to any one who invested time in learning what the candidate they voted for's stances were. As people should. So any OH, MI and WI Voters who are surprised by this? Their fault. The fact that he was going to this was well known, he'd put it out there.

 

[ML Dog]

In less than a year, literally everything Hussein did will be wiped out and a faded memory.

The community organizer's legacy:

Epic Post.

Obama's Shit, all his Executive Orders, all in the Dumpsters behind The White House.

Trump TOLD Obama that he was gonna toss all his shit out, on Inauguration Day

The two men had some very interesting conversations, frankly shocking and very unpleasant exchanges.

One gets the impression that they don't like each other very much:

 

[BZ]

Get ready to watch history repeat itself. It's amazing how many never learn.

 

[MantisToboggan]

I don't remember Trump coming to Ohio, Michigan, and Wisconsin and campaigning on the platform of "Let's turn Wall Street loose again."

Trump made it clear Dodd-Frank was on the chopping block during his campaign.

 

[Willie99]

Trump made it clear Dodd-Frank was on the chopping block during his campaign.

this would be a blessing, banking regulations and mortgage regulations and to a lesser extent now credit card regulations are all stunting growth

you want bankers to make better business decisions?

1) stop guaranteeing their bad decisions so they have more at risk

2) stop imposing quotas on them so less than credit worthy individuals are required to receive credit

imposing regulations and expenses and laws on them which makes everybody else jump through loops is not a solution

 

[MantisToboggan]

this would be a blessing, banking regulations and mortgage regulations and to a lesser extent now credit card regulations are all stunting growth

you want bankers to make better business decisions?

1) stop guaranteeing their bad decisions so they have more at risk

2) stop imposing quotas on them so less than credit worthy individuals are required to receive credit

imposing regulations and expenses and laws on them which makes everybody else jump through loops is not a solution

Ya, I'm with you. "I'm a liberal" but I'm anti-big government regulation.

 

[mountain]

The capital requirements put on smaller, community type banks is ridiculous, pretty much the same as the big boys.

Big banks don't care a lot about mom and pop

 

[BZ]

this would be a blessing, banking regulations and mortgage regulations and to a lesser extent now credit card regulations are all stunting growth

you want bankers to make better business decisions?

1) stop guaranteeing their bad decisions so they have more at risk

2) stop imposing quotas on them so less than credit worthy individuals are required to receive credit

imposing regulations and expenses and laws on them which makes everybody else jump through loops is not a solution

Yes deregulation of the banking industry has produced such wonderful results in the past. I'm sure this time it will be different though since his top advisors all hail from Goldman Sachs and they really have our best interest at heart. I'm sure growth be abound as we let the credit hounds loose once again.

 

[Willie99]

the big government guys always pretend it's freedoms that create the problems, and career politicians that know nothing about business or banking or health insurance are the solution

surreal

 

[Willie99]

The Government Did It




The financial peril of Fannie Mae and Freddie Mac –the government-sponsored, government-regulated mortgage giants regarded as instrumental in solving the nation’s mortgage market problems–has one benefit. It should help expose the lie that today’s financial problems are the result of an insufficiently regulated market.

For too long, the refrain has gone, Congress and the administration have been asleep at the wheel when they should have been steering the economy by expanding government control over the housing and financial markets. Economist Paul Krugman slams the administration’s “free-market ideology”; he urges Bush to “reverse course now” and “seek expanded regulation.”

All this overlooks a crucial fact: There has been no free market in housing or finance. Government has long exercised massive control over the housing and financial markets–including its creation of Fannie Mae and Freddie Mac (which have now amassed $5 trillion in liabilities)–leading to many of the problems being blamed on the free market today.

Consider the low lending standards that were a significant component of the mortgage crisis. Lenders made millions of loans to borrowers who, under normal market conditions, weren’t able to pay them off. These decisions have cost lenders, especially leading financial institutions, tens of billions of dollars.

It is popular to take low lending standards as proof that the free market has failed, that the system that is supposed to reward productive behavior and punish unproductive behavior has failed to do so. Yet this claim ignores that for years irrational lending standards have been forced on lenders by the federal Community Reinvestment Act (CRA) and rewarded (at taxpayers’ expense) by multiple government bodies.

The CRA forces banks to make loans in poor communities, loans that banks may otherwise reject as financially unsound. Under the CRA, banks must convince a set of bureaucracies that they are not engaging in discrimination, a charge that the act encourages any CRA-recognized community group to bring forward. Otherwise, any merger or expansion the banks attempt will likely be denied. But what counts as discrimination?

According to one enforcement agency, “discrimination exists when a lender’s underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.” Note that these “arbitrary or outdated criteria” include most of the essentials of responsible lending: income level, income verification, credit history and savings history–the very factors lenders are now being criticized for ignoring.

The government has promoted bad loans not just through the stick of the CRA but through the carrot of Fannie Mae and Freddie Mac, which purchase, securitize and guarantee loans made by lenders and whose debt is itself implicitly guaranteed by the federal government. This setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans and sell them to a government-backed buyer whose primary mandate was to “promote homeownership,” not to apply sound lending standards.

Of course, lenders not only sold billions of dollars in suspect loans to Fannie Mae and Freddie Mac, contributing to their present debacle, they also retained some subprime loans themselves and sold others to Wall Street–leading to the huge banking losses we have been witnessing for months. Is this, then, a free market failure? Again, no.

In a free market, lending large amounts of money to low-income, low-credit borrowers with no down payment would quickly prove disastrous. But the Federal Reserve Board’s inflationary policy of artificially low interest rates made investing in subprime loans extraordinarily profitable. Subprime borrowers who would normally not be able to pay off their expensive houses could do so, thanks to payments that plummeted along with Fed rates. And the inflationary housing boom meant homeowners rarely defaulted; so long as housing prices went up, even the worst-credit borrowers could always sell or refinance.

Thus, Fed policy turned dubious investments into fabulous successes. Bankers who made the deals lured investors and were showered with bonuses. Concerns about the possibility of mass defaults and foreclosures were assuaged by an administration whose president declared: “We want everybody in America to own their own home.”

Further promoting a sense of security, every major financial institution in America–both commercial banks and investment banks–was implicitly protected by the quasi-official policy of “too big to fail.” The “too big to fail” doctrine holds that, when they risk insolvency, large financial institutions (like Countrywide or Bear Stearns) must be bailed out through a network of government bodies including the Federal Deposit Insurance Corporation, the Federal Home Loan Banks and the Federal Reserve.

All of these government factors contributed to creating a situation in which millions of people were buying homes they could not afford, in which the participants experienced the illusion of prosperity, in which billions upon billions of dollars were going into bad investments. Eventually the bubble burst; the rest is history.

Given that our government was behind the wheel, influencing every aspect of the mortgage crisis, it is absurd to call today’s situation the result of insufficient regulation.
We do not need more regulation or economic “steering”–laws or bureaucrats dictating to financiers and investors the kind of innovation they may or may not engage in. If that were the solution to economic problems, then Hugo Chavez would preside over the world’s healthiest economy in Venezuela. What we need to do is remove the government’s power to coerce, bribe, reward and bail out irrational decisions. The unfree market has failed. It’s time for a truly free market.
Yaron Brook is managing director of BH Equity Research and executive director of the Ayn Rand Institute.

 

[Willie99]

Government agencies making bad policy, government telling bans to make bad loans and then guaranteeing them, government forcing banks to loan money to non credit worthy individuals all help create the problem

and then the government tried to fix the problems they created with more bad policy

it's not rocket science either

 

[Willie99]

PS: I want businessmen in charge, thank you. Because I know career politicians are clueless buffoons, it's that simple

I have zero confidence in any lifelong politician, and I understand what helps small businesses grow and create jobs

 

[SheriffJoe]

It's always comical when liberals blame failing government-regulated industries on "the free market."

Hard to name two industries with more government regulators, do-gooders and social engineers breathing down their necks than housing and banking.

Hey, lets create laws that make evil white rich men lend money to poor black people. What could go wrong?

 

[Willie99]

The Government Did It




The financial peril of Fannie Mae and Freddie Mac –the government-sponsored, government-regulated mortgage giants regarded as instrumental in solving the nation’s mortgage market problems–has one benefit. It should help expose the lie that today’s financial problems are the result of an insufficiently regulated market.

For too long, the refrain has gone, Congress and the administration have been asleep at the wheel when they should have been steering the economy by expanding government control over the housing and financial markets. Economist Paul Krugman slams the administration’s “free-market ideology”; he urges Bush to “reverse course now” and “seek expanded regulation.”

All this overlooks a crucial fact: There has been no free market in housing or finance. Government has long exercised massive control over the housing and financial markets–including its creation of Fannie Mae and Freddie Mac (which have now amassed $5 trillion in liabilities)–leading to many of the problems being blamed on the free market today.

Consider the low lending standards that were a significant component of the mortgage crisis. Lenders made millions of loans to borrowers who, under normal market conditions, weren’t able to pay them off. These decisions have cost lenders, especially leading financial institutions, tens of billions of dollars.

It is popular to take low lending standards as proof that the free market has failed, that the system that is supposed to reward productive behavior and punish unproductive behavior has failed to do so. Yet this claim ignores that for years irrational lending standards have been forced on lenders by the federal Community Reinvestment Act (CRA) and rewarded (at taxpayers’ expense) by multiple government bodies.

The CRA forces banks to make loans in poor communities, loans that banks may otherwise reject as financially unsound. Under the CRA, banks must convince a set of bureaucracies that they are not engaging in discrimination, a charge that the act encourages any CRA-recognized community group to bring forward. Otherwise, any merger or expansion the banks attempt will likely be denied. But what counts as discrimination?

According to one enforcement agency, “discrimination exists when a lender’s underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.” Note that these “arbitrary or outdated criteria” include most of the essentials of responsible lending: income level, income verification, credit history and savings history–the very factors lenders are now being criticized for ignoring.

The government has promoted bad loans not just through the stick of the CRA but through the carrot of Fannie Mae and Freddie Mac, which purchase, securitize and guarantee loans made by lenders and whose debt is itself implicitly guaranteed by the federal government. This setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans and sell them to a government-backed buyer whose primary mandate was to “promote homeownership,” not to apply sound lending standards.

Of course, lenders not only sold billions of dollars in suspect loans to Fannie Mae and Freddie Mac, contributing to their present debacle, they also retained some subprime loans themselves and sold others to Wall Street–leading to the huge banking losses we have been witnessing for months. Is this, then, a free market failure? Again, no.

In a free market, lending large amounts of money to low-income, low-credit borrowers with no down payment would quickly prove disastrous. But the Federal Reserve Board’s inflationary policy of artificially low interest rates made investing in subprime loans extraordinarily profitable. Subprime borrowers who would normally not be able to pay off their expensive houses could do so, thanks to payments that plummeted along with Fed rates. And the inflationary housing boom meant homeowners rarely defaulted; so long as housing prices went up, even the worst-credit borrowers could always sell or refinance.

Thus, Fed policy turned dubious investments into fabulous successes. Bankers who made the deals lured investors and were showered with bonuses. Concerns about the possibility of mass defaults and foreclosures were assuaged by an administration whose president declared: “We want everybody in America to own their own home.”

Further promoting a sense of security, every major financial institution in America–both commercial banks and investment banks–was implicitly protected by the quasi-official policy of “too big to fail.” The “too big to fail” doctrine holds that, when they risk insolvency, large financial institutions (like Countrywide or Bear Stearns) must be bailed out through a network of government bodies including the Federal Deposit Insurance Corporation, the Federal Home Loan Banks and the Federal Reserve.

All of these government factors contributed to creating a situation in which millions of people were buying homes they could not afford, in which the participants experienced the illusion of prosperity, in which billions upon billions of dollars were going into bad investments. Eventually the bubble burst; the rest is history.

Given that our government was behind the wheel, influencing every aspect of the mortgage crisis, it is absurd to call today’s situation the result of insufficient regulation.
We do not need more regulation or economic “steering”–laws or bureaucrats dictating to financiers and investors the kind of innovation they may or may not engage in. If that were the solution to economic problems, then Hugo Chavez would preside over the world’s healthiest economy in Venezuela. What we need to do is remove the government’s power to coerce, bribe, reward and bail out irrational decisions. The unfree market has failed. It’s time for a truly free market.
Yaron Brook is managing director of BH Equity Research and executive director of the Ayn Rand Institute.

BTW, this article was written in 2008

 

[BZ]

the big government guys always pretend it's freedoms that create the problems, and career politicians that know nothing about business or banking or health insurance are the solution

surreal

Freedoms don't create problems Willie- but greed certainly does. I'm not a proponent of big government, particularly as it relates to person freedoms, but there does need to be smart regulations in place for corporations. As far as this area is concerned, simply refer to history. Bank failures and financial crises were common until the 30's until regulations were strengthened. Then we go nearly 50 years without issue until the first deregulation in the 80's which cost taxpayers billions. Fast forward to the 90's when we deregulated again and shortly thereafter the massive financial crisis- again costing taxpayers billions. History has and will repeat itself.

Like you said, this isn't rocket science.