Trump Transition Leads to Changes in Dodd-Frank Act
While specifics of his plan remain to be seen, President-Elect Donald Trump and his transition team made clear this week that they intend to dismantle the Dodd-Frank Act, stating that it “does not work for working people.” A statement on Trump’s website says Dodd-Frank will be replaced “with new policies to encourage economic growth and job creation.”
Paul Atkins, Republican and former member of the Securities and Exchange Commission, will consult the transition team and recommend financial regulation policies, according to the Wall Street Journal. Atkins has been critical of Dodd-Frank.
A dismantling of the Dodd-Frank Act could bring changes to banking regulations that Republicans in Congress have opposed as well as prompt changes in the Consumer Financial Protection Bureau (CFPB). Changes in the CFPB could reverberate to the reverse mortgage industry as could cabinet leadership changes expected at both the Department of Housing and Urban Development and the Federal Housing Administration.
In an interview with Reverse Mortgage Daily, Joseph Lynyak III, a partner with Dorsey & Whitney LLP and an expert on the CFPB, said “Needed reforms to the operation of the CFPB might be adopted, including the creation of a commission structure, placing funding for the CFPB under the control of Congress, and amending the penalty provisions currently authorized for use by the CFPB.”
Benjamin Olson, partner at BuckleySander LLP, is the former deputy assistant director for the CFPB’s Office of Regulations. He told Reverse Mortgage Daily, “There are a variety of philosophies on how to best protect consumers, so a change in leadership does not necessarily mean an end to consumer protection.” Olson says a new director might prioritize different philosophies depending on the CFPB’s objectives and the policy issues involved.
Reverse Mortgage Daily notes that the Mortgage Bankers Association (MBA) has indicated its support of Trump and his administration. The MBA’s President and CEO David Stevens has called on Trump to prioritize the U.S. housing market.
Despite the announcement on Trump’s website that the Dodd-Frank Act will be “dismantled,” members of Trump’s transition team were walking back expectations that the act would be fully repealed, according to a Nov. 11 article in The Wall Street Journal. “Instead, Mr. Trump’s team is focused on rescinding or scaling back the individual provisions Republicans find most objectionable,” said The Wall Street Journal.
For more analysis of the transition, see Reverse Mortgage Daily’s article, “Trump Presidency Means Big Changes for CFPB’s Reign in Mortgage Industry” and “Full Repeal of Dodd-Frank Isn’t Main Focus of Trump Transition” in The Wall Street Journal.