Friday afternoon, Donald Trump traveled to the US Treasury Department where he's expected to sign a new executive order. The order aims at making life easier for American companies that want to avoid corporate income taxes, relax regulation on some large financial institutions, and make it harder for federal regulators to wind down big banks that fail during a financial crisis.
It's all part of the Trump administration's frenetic sprint to put some points on the board ahead of the symbolically significant 100 days mark, though it also certainly seems like a betrayal of the populist themes of his campaign. The good or bad news, depending on how you feel, is that, based on briefings provided in advance by the White House, it does not appear that today's order actually does anything per se.
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Instead, he is essentially issuing a press release announcing his intention to begin the process of potentially undoing the regulations. As with his earlier executive order on climate regulation, this push for bank deregulation is significant as a statement of priorities and certainly could lead to meaningful policy change down the road but will have little immediate impact.
But the broader significance of Trump's executive sort-of order is as a statement of priorities — a clear flashing light that the notion of a Trump-era GOP as an economically populist "workers' party" is dead, and business interests rule the roost.
What Trumps order would do, if it did anything
The executive order targets three separate Obama-era rules relating to financial services:
- One is rules from the Treasury Department announced about a year ago that make it harder for American companies to engage in "tax inversions" whereby they legally become foreign companies, while retaining their US headquarters and operations, in order to avoid US corporate income tax.
- Another is provisions of the Dodd-Frank bank regulation law that allow the Financial Stability Oversight Council to designate non-bank financial institutions (insurance companies, say) as "systemically significant" and thus subject to unusually tight regulatory scrutiny.
- Last, there is a key Dodd-Frank provision known as Orderly Liquidation Authority which gives the FDIC power keep a complicated failed bank running just long enough to euthanize it piece-by-piece without sparking a massive financial crisis.
Trump's order does not rescind any of these rules. It merely orders a "review" of them. The federal rulemaking process is time-consuming and subject to litigation and judicial review, so Trump can't simply waive Obama-era rules away. He can, however, implicitly gut regulation through neglect.