President Trump is set to sign one executive order and two presidential memoranda today (Friday) dealing with financial regulations and taxes at the Treasury Department, according to the White House. All three documents will ask Steven Mnuchin, Treasury Secretary, to analyze provisions of the Dodd-Frank financial reform law and the tax code. The president is directing that a report be given on procedures that will improve the existing structure.
President Trump promised during his campaign that he would “dismantle” Dodd-Frank and signed executive orders in February directing his Cabinet to find beneficial reforms economically that would change the laws. The two memoranda that the president will sign must be different than the previous orders, but it is unclear how.
The new executive order will direct Mnuchin to review “significant” tax regulations issued in 2016 and make determinations about their cost, their complexity and whether or not they are outside of the agency’s authority. This is being done because the White House and the Republican Party is eager to reform the country’s tax code for the first time in 30 years.
One memorandum will ask Mnuchin to asses the Financial Stability Oversight Council’s (FSOC) process of designating banks and financial firms as “too big to fail.” FSOC was established in Dodd-Frank to monitor financial risks and to designate which firms are “systemically important financial institutions.” Banks with this label are subject to tougher federal oversight, and the Republicans claim that the designation is applied inconsistently and arbitrarily.
The other memorandum would ask Mnuchin to review and report back on whether it is useful or not useful for the American economy to have an Orderly Liquidation Authority (OLA). The OLA is the process through which the government would help “systemically important financial institutions” sell their assets without causing an economic crisis. Republicans call this a “bailout” for big banks and want to replace these regulations with a new bankruptcy process.
These orders come as preparation for a Republican major legislative overhaul to Dodd-Frank. The House Financial Services Committee is going to hold a hearing on April 26th to consider their Chairman, Jeb Hensarling’s (R-Texas), rewrite of financial regulations.
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Credit: The Hill