When President Donald Trump took office, he promised to do “a big number” on the Dodd-Frank Wall Street Reform and Consumer Protection Act. He also promised to give a “major haircut” to this centerpiece of the U.S. response to the 2007–2008 financial crisis. Beyond signing into law the Economic Growth, Regulatory Relief, and Consumer Protection Act3—a 2018 bill that rolled back key pieces of Dodd-Frank—Trump has sought to keep his promise by appointing financial regulators intent on watering down major elements of financial reform.
These banking regulators—at the Federal Reserve Board of Governors, Office of the Comptroller of the Currency (OCC), and Federal Deposit Insurance Corp. (FDIC)—have proposed or finalized a host of changes to the big-bank safeguards put in place following the 2007–2008 financial crisis. The common refrain from these regulators is that the changes should be appropriately characterized as a commonsense “tailoring” of regulation. In fact, Federal Reserve Vice Chair for Supervision Randal Quarles used the words “tailor” or “tailoring” a staggering 25 times in a single related policy speech. The phrase implies the changes are neutral tweaks. When analyzing them collectively, however, it becomes very clear that they are not.
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