The White House hasn’t specified how it would seek to roll back Obama-era financial regulations, but has projected in a budget proposal released Tuesday it would save the United States $35 billion over 10 years through its efforts.
President Trump’s first formal budget plan reflects his promise to dismantle the Dodd-Frank Wall Street Reform and Consumer Protection Act with a pledge to foster “economic growth and vibrant financial markets” by scrapping its “regulatory excesses.”
The budget doesn’t specify which specific parts of the law would be rolled back to generate savings and boost the economy.
Some of the promised $35 billion could come through defunding the Consumer Financial Protection Bureau (CFPB), an agency established by Dodd-Frank to crack down on predatory lending and fraud.
Republicans have long targeted the CFPB, and the budget calls for the agency to be placed under the congressional appropriations process by 2019. The Federal Reserve, which currently funds the agency, would reduce the CFPB budget for fiscal 2018.
“CFPB’s interpretation of the Dodd-Frank Act has resulted in an unaccountable bureaucracy controlled by an independent director with unchecked regulatory authority and punitive power,” the White House wrote.
“Restructuring is required to ensure appropriate congressional oversight and to refocus CFPB’s efforts on enforcing the law rather than impeding free commerce.”
Eliminating the CFPB altogether would only save roughly $6 billion over 10 years, and funding for the Securities and Exchange Commission and Commodity Futures Trading Commission budgets remained the same. The Internal Revenue Service got a $239-million cut, so the White House is factoring other yet to be determined actions to spur economic growth.
Like many targets set by the administration, the White House’s expected $35 billion in savings is ambitious, and beyond what many economists deem probable. The Congressional Budget Office projected that the Financial CHOICE Act, the most sweeping potential changes to Dodd-Frank, would only save the U.S. $24 billion.
The bill is widely considered too conservative to pass a narrowly divided Senate, meaning anything the Trump administration could get done with Congress could need a narrower scope, limiting the size of the impact.