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President Signs Executive Orders Concerning Banking Industry

President Donald Trump signed executive orders this morning that deal directly with the banking industry's most difficult obstacle for success. The executive order mandates a comprehensive review of all regulations stemming from the Wall Street Reform and Consumer Protection Act – commonly referred to as "Dodd-Frank."

The order directs the Department of Labor to stop implementing the so-called fiduciary rule. Earlier this week, the president called Dodd-Frank a "disaster" and vowed to "do a big number on it."

The executive order will not make any immediate changes to the rules and regulation that govern bank's operations.

In a related development: last week, President Trump issued an executive order that will restrain the growth of federal regulations. New regulations must have a net budgetary cost of zero or less. The order also mandates that for every new regulation that's issued, the issuing agency must get rid of two existing regulations.

The key question for bankers is whether the order applies to federal banking regulators. The order's language is not specific about which agencies are covered. Nevertheless, we understand the intent is to exclude from this order all independent regulatory agencies, including the Federal Reserve, the OCC and the FDIC.

The order appears to significantly increase the Office of Management's power in the regulatory process.