Offering a blistering critique of the Trump administration’s deregulation frenzy and the potential consequences, last week Better Markets’ President and CEO participated in the Global Shareholder Activism Conference in New York, delivering a paper entitled, “Deregulation Unleashes Wall Street to Prey on Investors, Consumers and All Hard-Working Americans.”
After reviewing the devastating impact of the 2008 financial crisis and its $20 trillion cost to the country, the paper offers an important, cautionary and troubling revelation that legislative changes to current financial protection rules is neither the easiest nor the most effective way to deregulate the financial industry:
“Installing industry friendly nominees and appointees at the financial regulatory agencies is the most effective way and much quicker than trying to change the law.
“President Trump has been doing this virtually from day one and the change over from President Obama’s appointees to President Trump’s appointees is almost complete, with just the FDIC and CFPB still lead by holdovers. The Treasury department, SEC, CFTC and Office of Comptroller of the Currency (OCC) are all lead by Trump appointees. This also means that Trump appointees have a working majority – if not supermajority — on the Financial Stability Oversight Council (FSOC).”
The implications and negative consequences, Kelleher writes, of these actions, on investors, consumers, financial stability and the economy, to say nothing of every American, cannot be overstated. Rulemaking at all the financial regulatory agencies has come to a dead-stop. Existing rules have come under scrutiny, the likely result being their modification or outright revocation. The implementation and interpretation of existing rules will likely be so relaxed as so render them meaningless. And, similarly, meaningful enforcement cases will also decrease substantially. All of this can happen and much of it is happening already without any legislative action and without one word of the Dodd-Frank law changing.