What Comes After Dodd-Frank?

What did the Republicans actually do when they “killed” Dodd-Frank?

House Republicans last Thursday passed the Financial CHOICE Act, a bill designed to roll back many of the regulations in the 2010 Dodd-Frank Act. This represents just another step by Republicans under the Trump administration to dismantle many of former President Obama’s signature pieces of legislation.

The CHOICE Act, though about a quarter the length of the law it aims to rein in, is 587 pages long and contains a number of provisions including harsher SEC penalties on Wall Street fraudsters, increased legislative control over executive financial regulatory agencies, and major changes in the Consumer Financial Protection Bureau.

The meat of the bill, however, centers around the repeal of both the Department of Labor’s fiduciary rule and the Volcker rule. Democrats are expected to vehemently defend them in the Senate.

The fiduciary rule legally and ethically binds financial advisors working with Americans on retirement accounts to act as fiduciaries to their clients. In other words, these advisors must act in the best interest of their clients in all cases, even if the advice provided would not benefit the advisor. Much of the industry is currently accountable to the slightly lower “suitability standard.”