Trump’s Dodd-Frank Plan Will Be Early Test of Republican Unity
by Billy House, Kevin Cirilli
May 19, 2016
Donald Trump says he’ll deliver a plan in the next two weeks to rewrite the Dodd-Frank law. Around the same time, House Financial Services Chairman Jeb Hensarling is promising to make his own proposal.
So far, at least publicly, the two camps aren’t working together. But the results would offer an early look at whether the Republican nominee and party members in Congress are aligned on a top Republican priority.
The Dodd-Frank plans will be the first of many tests on policy issues -- including health care, national security and a tax overhaul -- of how closely Trump’s agenda fits in with broader Republican plans.
The stakes for the party are high: in effect, whether Republicans are speaking to voters this fall with one voice, or many.
"For our leaders to speak with one voice makes a lot more sense, rather than just being anti-Obama and anti-Dodd-Frank," said Representative Peter King of New York, a Republican on the Financial Services Committee. He said he hopes there will be unity with Trump on other policy matters, too, "but especially in something like this that goes right to the heart of the economy and doesn’t lend itself to sound bites."
The early signs on Dodd-Frank aren’t clear on whether Republicans are unified.
Hensarling’s bill is aimed at replacing Dodd-Frank with new rules that ease up on Federal Reserve oversight of banks, consumer protection laws and capital requirements.
The populist Trump’s intentions are much less defined. Trump told Reuters in an interview Tuesday that he will produce a plan that’s "close to a dismantling" of the 2010 financial regulation law that came in response to the 2007-2008 financial crisis.
House Speaker Paul Ryan, who has so far withheld his endorsement from Trump, is moving ahead with a broader effort to map out a Republican legislative agenda for 2017 and beyond.
Ryan has begun a series of conversations between his aides and Trump’s policy team, but the speaker’s office says that the House Republicans’ legislative agenda will be released independently of those discussions.
"We’re pretty well ahead in that process," Ryan spokeswoman AshLee Strong told reporters, noting that the six topical task forces are already winding down their work.
Hensarling is leading one of those task forces, which plans to publish a white paper outlining how making changes to financial regulation -- including Dodd-Frank -- could spur economic growth.
On May 12 -- the same day as Trump’s high-profile meeting with Ryan -- Hensarling was giving a speech at the National Center for Policy Analysis about his committee’s plan to offer "a pro-growth, pro-consumer alternative" to Dodd-Frank, which he says is harming the economy and consumers.
"Stay tuned. In the weeks to come, we on the committee look forward to unveiling this legislation," said Hensarling of Texas. It would be the culmination of months of work, dozens of hearings, and will likely incorporate legislation the committee has passed previously but has not yet advanced to the Senate or become law.
Two days after his speech, Hensarling added his name to the growing list of House Republicans, including several other chairmen, endorsing Trump.
Sarah Rozier, a spokeswoman for the Financial Services Committee’s majority, says that they haven’t coordinated with Trump on the legislation.
"There have been no discussions with any presidential candidates about our plan -- which we plan to release in the coming weeks -- but we welcome anyone with ideas about how to offer Americans a better approach," she said in a statement.
Still, other conversations are ongoing. House Republicans supporting Trump, including several committee and subcommittee chairmen, are exchanging ideas informally with the Trump campaign, says Representative Chris Collins, a New York Republican and early House backer of Trump. This group of lawmakers meets weekly now with Trump campaign representatives.
While it’s not clear whether Dodd-Frank has come up in those talks, Republicans and Trump are coming from the same starting point.
"Mr. Trump is right, Dodd-Frank isn’t working," Rozier said. And the business community is eagerly awaiting specifics from both.
"We are looking forward to hearing more about Mr. Trump’s views on how to grow the economy, and to see how those details fit in with the proposals we are expecting to see from Congress," said Francis Creighton, executive vice president of government affairs at the Financial Services Roundtable, an influential financial services lobbying group.
Jack Mozloom, spokesman for the National Federation of Independent Business, said that Dodd-Frank "shows up on our regular surveys of small business owners as an impediment to capital." While NFIB said that it took no position on the legislation, "we expect that most small business owners would not weep over the repeal of Dodd-Frank," Mozloom said.
Democrats, meanwhile, have vehemently defended the legislation, formally known as the Wall Street Reform and Consumer Protection Act.
Democratic presidential front-runner Hillary Clinton responded to Trump’s assertion that he’d repeal Dodd-Frank as "reckless."
And Democratic National Committee spokesman Luis Miranda said that Trump’s comments are further evidence that "his dangerous ideas shouldn’t step foot in the White House."