WASHINGTON–President Trump has moved to eliminate a number of the laws and regulations passed in the wake of the Great Recession, including rules that reduce oversight of Wall Street and potentially credit unions that were part of the Dodd-Frank Act.
Separately, Trump also signed an order that seeks to put an end to a Labor Department rule that requires brokers to exercise a fiduciary duty of acting in a client’s best interests, rather than acting to profit themselves, when providing retirement advice. While saying it supports the intent of the Labor Department rule, CUNA praised the move to delay it, saying it’s too complex.
The president signed an executive order that calls for a financial system that is overseen by “efficient, effective and appropriately tailored” regulations. CUNA said the order is consistent with its Campaign for Common-Sense Regulation, which seeks to relieve regulatory burdens to better allow local institutions like credit unions to make decisions that best suit their communities.
“We appreciate the administration’s direction to ensure that regulations are appropriately tailored to target those harming consumers and to provide more consideration to the impact of these regulations on American consumers,” said CUNA President/CEO Jim Nussle in a statement. “The current one-size-fits-all style of regulation does not work for Main Street – local credit unions, small banks, and the consumers and small businesses they serve. We’re hopeful that the core principles spelled out today will help ensure community financial institutions and the millions of Americans that rely on them are able to operate in a more favorable environment. We stand willing to work with the administration and Congress to make appropriate changes to achieve these goals.”
NAFCU Weighs In
NAFCU President and CEO Dan Berger, meanwhile, called on the trade group’s membership to lobby lawmakers to repeal of the Durbin debit interchange amendment.
The 2017 “Financial CHOICE Act,” which could be introduced in the coming weeks, is expected to include a provision to repeal the amendment, which was included as a late addition to the 2010 Dodd-Frank Act, NAFCU noted.
“As you know, NAFCU continues to push for repeal of the failed Durbin debit interchange amendment and to fight against any efforts to expand interchange price caps to credit cards,” Berger said. “Now, we need your help.”
Berger explained that the merchant community has made keeping the Durbin amendment intact as their No. 1 target, and they are lobbying the Hill to drop the repeal from the bill.
The president signed a directive that calls for a significant rewriting of major portions of Dodd-Frank saying it will ease constraints on banks and enable them to lend more to companies, which in turn will then hire more workers, Trump said.
“We expect to be cutting a lot out of Dodd-Frank because frankly, I have so many people, friends of mine that had nice businesses, they can’t borrow money,” Trump said during a meeting with business leaders. “They just can’t get any money because the banks just won’t let them borrow it because of the rules and regulations in Dodd-Frank.”
At nearly the same time the president was issuing his order, the Senate voted 52 to 47 to void the rule in Dodd Frank that requires oil companies to publicly disclose payments they make to governments when developing resources around the world. The House had earlier voted to also repeal the rule.
The Republicans have said their overall goal is to “repeal and replace” Dodd Frank, and have also been reviewing ways to use the budget process to defund certain portions of the law.
In response to the executive order ordering the Department of Labor to stop its fiduciary rule implementation and review the regulation in its entirety, CUNA said it supports the goal of the rule to protect investors, but has concerns that regulatory burdens and complexity associated with this rule could make it more difficult for consumers of all means to receive support planning for their financial future from credit union service organizations and some credit unions.
“CUNA welcomes the administration’s announced delay of the Department of Labor’s fiduciary rule,” said Ryan Donovan, CUNA chief advocacy officer, in a statement. “While CUNA appreciates that DOL provided some of our requested clarifications in their final rule, we remain concerned that all members should have the ability to receive help saving and planning for the future, without unnecessary regulatory barriers. We believe a delayed implementation would benefit credit union members as it would allow DOL to consider more closely the potential unnecessary adverse impacts of the rule.”
The DOL’s rule, finalized in April 2016, defines who is a “fiduciary” of an employee benefit plan, adding brokers and advisers providing advice to individual retirement accounts.