On Friday, January 20, 2017, Donald J. Trump will become the President of the United States, and for the first time in nearly a decade, a single party will control the Presidency, the House, and the Senate. After years of deadlock, Republicans are prepared to use this consolidation of power to move their legislative agenda quickly through Congress. But one current law may find itself in the GOP’s cross-hairs: the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).
President Obama signed the over 2,000 page Dodd-Frank Act into law over six years ago on July 21, 2010. The sweeping legislation created the Consumer Financial Protection Bureau (CFPB) and imposed comprehensive regulatory reform on the financial industry. Although hailed by Democrats as a success, Republicans have repeatedly argued that Dodd-Frank overregulates the financial services industry and often causes more harm than good. During his campaign, President-Elect Trump called Dodd-Frank “a disaster” that “make[s] it harder for small businesses.” In an op-ed in USA Today, Congressman Jeb Hensarling (R) of Texas likened Dodd-Frank to “Obamacare for America’s economy and their household finances…[It has] left [Americans] with fewer choices, higher costs and less freedom.”
However, the GOP will likely stop short of attempting to repeal Dodd-Frank in full. As we previously reported, Congressional Republicans introduced a bill, the Financial CHOICE Act, in early 2015 that was designed to “repeal[] the provisions of Dodd-Frank Act that make America less prosperous, less stable, and less free.” Specifically, the Financial CHOICE Act would eliminate aspects of Dodd-Frank that Republicans believe are unnecessary like the Volcker Rule, a complex regulation that limits the type of speculative investments banks may engage in. The Financial CHOICE Act would also reign in the CFPB’s power by replacing the current single director with a bipartisan commission and requiring funding from congressional appropriations. Although unlikely to pass in its current form, the Financial CHOICE Act may provide a blueprint to any attempt to repeal parts of Dodd-Frank this year.
However, the GOP can expect strong opposition to any attempt to amend Dodd-Frank. In a recent blog post, Senator Elizabeth Warren (D) of Massachusetts warned that Democrats would “fight [Trump and the Republican Party] every step of the way.” But whether Congressional Democrats will be able to muster enough support to block the GOP’s efforts remains to be seen.