Dodd-Frank, born of the fires ignited by the 2008 Financial Crisis, has had a rocky existence, from its writing and passage to its lengthy and still uncompleted implementation. With Republicans controlling both houses of Congress, the push is on to repeal or at least rid the law of its most “oppressive” rules that affect all parts of the business community. On May 4, the House Financial Services Committee passed the Financial Choice Act (https://www.congress.gov/bill/115th-congress/house-bill/10) that will, if passed by Congress, repeal some key parts of Dodd-Frank, including:
- Repeal the Volcker Rule with regard to certain speculative investments by banks. In addition, it would repeal section 619, which “generally prohibits insured depository institutions and any company affiliated with an insured depository institution from engaging in proprietary trading and from acquiring or retaining ownership interests in, sponsoring, or having certain relationships with a hedge fund or private equity fund.”
- Repeal the DOL’s Fiduciary Rule that was to go into affect in April, and was delayed to June 9. The new DOL secretary has said he is hoping to halt that implementation date. But many of the big firms such as Vanguard have already implemented the rule and aren’t going backward.
- Establish a “Centennial Monetary Commission,” made up of members of Congress, that will study the Federal Reserve Board and its duties, specifically a) how monetary policy has affected the economy since the Fed was started in 1913, b) evaluate “operational regimes” in terms of monetary policy, including reviewing everything from inflation rate targets to the gold standard, and c) recommend a course of action for U.S. monetary policy. This commission report would be due one year after enactment of that section.
This bill still has a long journey. To survive, it must to be passed by a full House vote before being sent to the Senate to review, mark up and then send back to the House.
The CFTC is doing its share to try and reduce the complication of regulation. Under Chairman Giancarlo’s new Project Keep It Simple, Stupid push, the agency is asking for input and ideas from the industry on how to simplify and make rules less costly. If you’re interested, e-mail your opinions, ideas and recommendations to: projectkiss@cftc.gov or visit cftc.gov/projectkiss.