Trump should let Dodd-Frank stand

President Trump has signed a rash of executive orders in the first weeks of his administration. While the lion's share of the media focus has been on his restrictive immigration policy — Trump's view on Wall Street and consumer protection has received little attention.

The incoming president has labeled the landmark Dodd-Frank Wall Street Reform Act a "disaster" that has stifled economic growth and blocked business and consumer lending. Passed in the aftermath of the economic crisis of 2009, Dodd-Frank was designed to reduce the financial risks that nearly brought down the U.S. economy. In his executive order, Trump wants his administration to review Dodd-Frank with the purpose of revising or even eliminating many of its provisions. From my perspective, that would be a serious mistake placing the American economy in renewed jeopardy.

Dodd-Frank is a complex piece of legislation that offers safeguards for both Wall Street and the financial consumer. On the business side, it establishes a financial oversight council that monitors the financial condition of mega-firms whose failure could do irreparable harm to the economy. It also places restrictions on the activities of so-called hedge funds that seek high returns by investing in riskier investments like mortgage-backed derivatives and raises the reserve requirements for banks, enhancing their safety and stability.

On the consumer side, Dodd-Frank estbalished the Consumer Financial Protective Bureau. The bureau regulates consumer and payday loans, banking fees and mortgage lending. Additionally, it requires greater bank scrutiny regarding loan application information, borrower's income, credit history, job status, etc.

Dodd-Frank is a success that has accomplished its objective of stabilizing the financial environment in the wake of an economic crisis. President Trump would be well-advised to heed the admonishment of philosopher George Santayana: "Those who cannot remember the past are condemned to repeat it."

John Kubik

Trail Creek

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