Today’s headlines focused on a Dodd-Frank Act repeal or overhaul under the Trump administration. Many in the industry may find this welcome news, as this industry has battled its way through six years of Dodd-Frank rules in the US.
Details are fuzzy at best right now, but another plan is starting to get some traction as a possible replacement. The Financial CHOICE Act – the corny acronym that could only be made in Washington – stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs. It is a bill introduced over the summer by House Financial Services Committee Chairman Jeb Hensarling (R-TX), a rumoured candidate for Treasury secretary, and covers a variety of areas from repealing the Volcker Rule, to new banking capital and liquidity standards, to the end of bank bailouts and “Too Big To Fail” policies.
It would also change the regulatory focus, subjecting all financial regulators to the REINS Act designed to keep the cost of regulation in check, bipartisan commissions and putting them on the “appropriations process so that Congress can exercise proper oversight.”
The bill also calls for more transparency from the Fed in terms of monetary policy and regulatory activity. There would be “enhanced” penalties for financial fraud and self-dealing, as well as a tripling of the monetary fines in certain administrative and civil actions and increased criminal fines for insider trading and other illegal activities. The CHOICE Executive Summary can be found [HERE.
Whether or not this is the new Dodd-Frank is still unknown, but parts of the language in the bill were lifted by the Trump team and put on its transition website.