Barron's - 03 March 2017
After the Republican election sweep in November, it seemed almost inevitable that the Dodd-Frank Act would be swept away or gutted in short order.
Three months later, “the drive to wipe out or scale back Dodd-Frank has lost momentum,” writes Bloomberg. While President Trump on Feb. 3 ordered a Treasury Department review of the Dodd-Frank law, he did not refer to the law during his first address to Congress, last week.
“As with the Republican vow to repeal Obamacare, the sticking point may be finding a replacement for the law on the books,” Bloomberg explains.
House Financial Services Committee Chairman Jeb Hensarling of Texas is an outspoken critic of the law. But his House bill, the Financial Choice Act, is seen as unlikely to become law.
The bill is unpopular with bankers because it requires banks to maintain higher levels of capital. Congressional Democrats say it does away with vital safeguards against another financial crisis. A Democratic filibuster in the Senate could await the bill if it makes it that far.
Because of competing legislative priorities in Washington, Dodd-Frank could be on the back burner until at least 2018. And eventual changes could be confined to delivering relief to smaller banks that don’t pose systemic risks.