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Executive Order on Dodd-Frank Presages Repeat of Financial Crisis

Friday, February 3, 2017
Deborah Goldstein

This afternoon, President Donald Trump is expected to issue an executive order “directing the Treasury secretary and financial regulators to come up with a plan to revise rules the Dodd-Frank law put in place.”

Center for Responsible Lending (CRL) Executive Vice President Debbie Goldstein released the following statement:

If this Administration has not learned from the mistakes that caused the 2008 economic crisis, they are doomed to repeat them. Lest we forget, lax regulation allowed Wall Street to back extremely reckless loans whose failure snowballed into a financial crisis and Great Recession. Tens of thousands of Americans lost their homes, around eight million Americans lost their jobs, and U.S. households lost trillions of dollars. Recent comments from the Administration and this upcoming executive order are a warning sign of a return to those dark days.

The Wall Street Reform and Consumer Protection Act, also known as Dodd-Frank, established reasonable safeguards against dangerous financial practices. The law also established a Consumer Financial Protection Bureau (CFPB). The CFPB has returned nearly $12 billion to more than 29 million people who’ve suffered abuse at the hands of big banks like Wells Fargo, for-profit colleges like ITT Tech, car-title and payday lenders, credit card companies, and other financial institutions. Any attempt to roll back these measures would be a disserve to America’s working families, threatening them with immense economic hardship.

As a candidate, President Trump spoke about how Wall Street and the Washington political establishment had hurt America’s middle-class. However, as President, he said he’s going to 'do a big number' on Dodd-Frank – a law that protects Main Street from the recklessness of Wall Street – and now he is planning to change how it is implemented. It is our sincere hope that the Administration fulfills its campaign pledge to help the middle class by protecting them from Wall Street’s abuse by standing by consumer protections and against predatory lending, rather than seeking to roll back Dodd-Frank.

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Ricardo Quinto at ricado.quinto@responsiblelending.org.