Dodd-Frank overhaul imminent as Trump orders review

President Trump will order a review of the Dodd-Frank Act and Fiduciary Rule which could see major roll-back of rules.

US President Donald Trump is expected to order a review of the Dodd-Frank Act.

The Act was introduced in 2010 in direct response to the financial crisis and introduced the Financial Stability Oversight Council as well as the Volcker Rule.

Reports from Bloomberg also indicate that Trump will also seek to remove the US DoL (Department of Labor) Fiduciary rule.

The rule was set to begin in April and applies to all financial professionals who work with retirement plans or provide retirement advice. 

One legal expert t said that any delay in the application may see the “end of the rule as we know it.”  

“Officials in the Trump administration are openly hostile to the rule and, while there was some risk of other distractions lowering this on the list of priorities, once the decision to link the rule with Dodd-Frank was made by the administration, the die was cast,” said Andrew Oringer, co-chair of Dechert’s ERISA and executive compensation group. 

“Even if the rule is ultimately waylaid, there seems to be a general sense among some that some type of ‘best interest’ overlay may be appropriate.

“I would think, though, that any replacement regime would be far more streamlined, focusing on the basics of a ‘best interest’ overlay rather than on some highly complex web of rules,” said Oringer. 

The TRADE’s sister publication, Global Custodian, recently investigated the possibility of the Trump administration altering or even removing the Dodd-Frank Act.

Plans to water down the Dodd-Frank Act were met with skepticism at last June’s NEMA with delegates doubting it could be achieved.

Sean Tuffy, senior vice president and head of regulatory intelligence at BBH, echoed that sentiment in a response to the news on Twitter.

Many banks have already spent huge sums of money implementing Dodd-Frank, and some may express alarm at having to unwind their compliance and infrastructure builds.

“In my personal view, his main objective is to increase enterprise and stimulate growth but I suspect he is going to take a practical approach to regulation, said Steven Nadel, partner at Seward and Kissel in New York, speaking at the end of 2016

“I do not think he is going to remove Dodd-Frank but rather modify it.”