February 03, 2017

Trump signs order for Dodd-Frank review, directs fiduciary rule delay

President Donald Trump signed an executive order Friday that sets "core principles" for U.S. financial regulation while directing the Treasury secretary to meet with members of the Financial Stability Oversight Council on ways to ease regulatory burden under the Dodd-Frank Act.

NAFCU President and CEO Dan Berger said NAFCU welcomes the president's focus on potential regulatory relief. "We welcome regulators taking a hard look at the Dodd-Frank Act for ways to lift current burdens," said Berger, "but we will also continue to press the CFPB to use the authority it has now to exempt credit unions from regulations that were created to address abuses in which credit unions did not engage.

"Ultimately, we look forward to the administration, Congress and the regulators working together to reduce regulatory burden," he said. "We will continue to advocate for credit unions' best interests as this review moves forward."

The executive order launches a dialogue among top regulators on ways to ease Dodd-Frank rules in keeping with the administration's "core principles" for regulation, among them ensuring regulation is appropriately tailored and fosters economic growth. It requires the Treasury secretary, who leads the FSOC, to discuss potential Dodd-Frank Act reforms with council members, which include the heads of the Federal Reserve, NCUA, CFPB, Federal Housing Finance Agency, FDIC, Office of the Comptroller of the Currency, Securities and Exchange Commission and Commodity Futures Trading Commission.

Any recommendations for specific Dodd-Frank Act changes would require congressional action.

NAFCU has reached out to the Trump administration, regulators and Congress seeking an easing in credit unions' regulatory burden under the Dodd-Frank Act, which was created to address the abusive practices that gave rise to the financial crisis. Those in Congress and the regulatory agencies have agreed that credit unions were not the cause of the crisis.

NAFCU stood as the only financial industry trade association to oppose placing credit unions under CFPB authority as the Dodd-Frank Act was being written. The association is also pushing for repeal of the Durbin amendment on debit interchange.

Last week, Berger called on credit unions to reach out to their representatives for support of the Durbin repeal measure, included in last year's "Financial CHOICE Act" from House Financial Services Committee Chairman Jeb Hensarling, R-Texas. That bill is expected to be reintroduced and marked up in coming weeks.

The president also on Friday directed the Labor Department to delay implementation of its fiduciary rule for further review. Issued last year with an effective date of this April 10, the rule would affect how financial advisers may advise clients on retirement savings and hold advisers to a fiduciary standard. NAFCU has aired concerns about how the rule's indirect costs would affect credit unions.

This rule is in litigation. Meanwhile, Friday's memorandum to the Labor secretary provides for a 180-day delay of the rule pending review.