Could Dodd-Frank Soon Disappear?

Could Dodd-Frank Soon Disappear?

President Trump orders a reevaluation of its regulations.

Major legislative changes may soon impact the financial industry. On February 3, President Donald Trump signed two executive orders authorizing reviews of some key industry regulations – the Dodd-Frank Act, and an upcoming Department of Labor rule requiring financial professionals offering retirement planning advice to serve as fiduciaries.1   

 

Passed in 2010, the Dodd-Frank Act was a response to the 2008 financial crisis. To this day, parts of the law have never been carried out. Its goal was to put safety measures in place to prevent further bank bailouts. Dodd-Frank sought to limit risk exposure for big banks by limiting certain speculative forms of investment, setting tighter mortgage lending standards, and establishing greater transparency.2

The critics of Dodd-Frank have contended that its hundreds of regulations hamper banks and investment firms. Some feel that Dodd-Frank makes it harder for small and mid-sized businesses to obtain loans, hindering the nation’s economic growth. According to the New York Times, House Republicans are advancing legislation to “repeal and replace” Dodd-Frank as a complement to the executive order.1  

The DOL had planned a spring 2017 rollout of the fiduciary rule, with a gradual path toward full implementation. By executive order, President Trump has instructed the DoL to postpone the April 10 debut of the rule by at least 90 days, during which a review of the rule may be conducted.3

The regulation was first announced in 2010 and its introduction has been delayed by a number of lawsuits. Proponents believe the rule will help investment professionals to reduce the potential for conflict of interest as they counsel investors. Detractors say that such directives are already in place, and argue that the rule will make it tougher for such professionals to consult lower-income retirement savers.2,3

      

Lewis Wealth Management Group can be reached at 217-337-5584, nate@paullewis.com, or www.paullewis.com.

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. 

Securities and Advisory Services offered through Triad Advisors Member FINRA/SIPC.

 

Citations.

1 – nytimes.com/2017/02/03/business/dealbook/trump-congress-financial-regulations.html [2/3/17]

2 – tinyurl.com/j3wse2l [2/3/17]

3 – cnbc.com/2017/02/03/trump-expected-to-delay-rule-giving-savers-greater-protections.html [2/3/17]

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