The Trump administration over the next several months will conduct a thorough review of the U.S. financial regulatory system and the Dodd-Frank Act to determine what changes are needed, said Mark Calabria, chief economist for Vice President Mike Pence, today at the American Bankers Association’s Government Relations Summit. Calabria gave an overview of several principles that were included in President Trump’s recent exceutive order calling for the review.
One priority for the Trump team will be to protect consumer choice. “All too often, bureaucrats in Washington have tried to limit consumer choices, believing themselves to be better informed” about what’s best for the consumer, Calabria said. “In many cases, regulators have done so in a manner inconsistent with the language of Dodd-Frank,” he added such as certain CFPB rulemakings that impose price ceilings or interest rate caps. He also pointed out that many CFPB actions, such as its arbitration rulemaking, appear more calculated to benefiting the plaintiffs’ bar than helping consumers.
The administration is also emphasizing the importance of staffing at the regulatory agencies, Calabria said, adding that “when it comes to regulation, personnel is policy.” The Trump administration is working quickly to fill open positions at the regulatory agencies, particularly those directly under the control of the president, and Calabria noted that “since so much of the Obama era financial regulation was done through guidance, that part… can be quickly erased once we have new regulators in place.”
In a Q&A session following his remarks, Calabria said that the administration is also forming a group to determine the best way forward for Fannie Mae and Freddie Mac. “Our objective is ‘never again,’” he said. “We don’t want to be in a situation where we have to put tens of billions [of dollars]into these entities or their successors.”