President-elect Donald Trump is translating some of his populist campaign rhetoric into policy statements, including the contention that the Dodd-Frank Act should be scrapped because it has made Wall Street banks an even bigger threat to the nation’s economy and working families.
After the government’s answer to the 2008 financial crisis, the “big banks got bigger while community financial institutions have disappeared at a rate of one per day, and taxpayers remain on the hook for bailing out financial firms deemed ‘too big to fail,’” says a statement posted on Trump’s official transition website. “The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation.”
U.S. bank stocks climbed for a second straight day on Thursday as investors bet a Trump presidency will lead to less regulation and sideline industry critics in Congress led by Senator Elizabeth Warren.
The 24-company KBW Bank Index advanced 3 percent at 3:16 p.m. in New York, led by Wells Fargo & Co., which rose 7.4 percent. Bank of America Corp. advanced 4.5 percent, while JPMorgan Chase & Co. climbed 4.4 percent.
The call to scrap Dodd-Frank isn’t likely to go over well with Warren, the Wall Street scourge and Trump antagonist who said Thursday that she’d be willing to work with the incoming administration to enact economic and banking policies so long as he didn’t loosen existing rules. In remarks prepared for an AFL-CIO labor federation event in Washington, Warren cited issues they agree on, including the need to curtail Wall Street influence in politics, reinstate Glass-Steagall Act limits on banking activities and reform trade deals.
“When President-elect Trump wants to take on these issues, when his goal is to increase the economic security of middle-class families, then count me in,” the Massachusetts Democrat said on Thursday. “I will put aside our differences and I will work with him to accomplish that goal.”
QuickTake Q&A: What Trump Might Mean for Wall Street Reform Law
In addition to repealing Dodd-Frank, Trump’s transition website outlines several policies that will be familiar to those who followed his campaign, including calls for a moratorium on new rules so existing measures can be reviewed. It also broadly addressed a tax-code overhaul, saying Trump’s plan “can be summarized as lower, simpler, fairer, and pro-growth.”
The new administration’s plans for financial regulation could pull from a proposal released earlier this year by Representative Jeb Hensarling, the Texas Republican who leads the House Financial Services Committee. His bill -- dubbed the Choice Act -- calls for ripping up core parts of Dodd-Frank, including a provision that empowers the government to dismantle failed banks. He also wants to do away with Volcker Rule restrictions on banks’ trading and investments, and to weaken the reach of the Consumer Financial Protection Bureau.
Warren’s pledge offers a first glimpse of a strategy she may use next year when Republicans control the White House and both chambers in Congress.
“Americans want to hold the big banks accountable,” Warren said. “If Trump and the Republican Party try to turn loose the big banks and financial institutions so they can once again gamble with our economy and bring it all crashing down, then we will fight them every step of the way.”