President Trump on Friday ordered a detailed review of Dodd-Frank, as the administration said the law failed miserably in its goal of providing effective regulation of financial institutions.
“Dodd-Frank did not solve the causes of the financial crisis,” White House Press Secretary said during his daily press briefing.
The memo has no immediate impact on the regulatory regime the law established and leaves open the status of CFPB Director Richard Cordray. Spicer told journalists he had no personnel announcement regarding the CFPB. He added that the administration will work with Congress on any changes to the agency.
Republicans on the House Financial Services Committee have said they intend to re-introduce the Financial CHOICE Act, which will include provisions to overhaul the CFPB.
Separately, Trump moved to revoke the so-called fiduciary rule governing financial advisors.
But the status of the CFPB director remains unresolved.
A panel of judges from the U.S. Circuit Court of Appeals for the District of Columbia has ruled that the structure of the CFPB is unconstitutional because it is governed by a single director – currently Richard Cordray – who can only be removed for cause. The panel said that the president should be able to fire the director for any reason, but stayed that order.
The CFPB and the Obama Justice Department have requested that the full D.C. appeals court consider the case.
Several other parties, including state attorneys general, consumer groups and one credit union, the Self-Help Credit Union, had asked to intercede on behalf of the CFPB, but the appeals court on Thursday denied that request.
On the Senate side, Sen. Deb Fischer (R-Neb.) has reintroduced legislation that would replace the one-director agency with a bipartisan, five-member board.
That legislation has stalled in the past.
Senate Republicans also are attempting to roll back a CFPB rule governing prepaid cards. The Senators have introduced a resolution under the Congressional Review Act that the CFPB contends would provide consumer protections to a largely unregulated sector of the financial services industry.
Consumer advocates condemned the administration’s efforts to roll back Dodd-Frank.
“If Trump succeeds in rolling back Dodd-Frank rules he will rush the country straightforward into another job-killing financial crisis,” said Public Citizen President Robert Weissman.
