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Trump Administration Issues Executive Order on Financial Regulation and Memo on DOL Fiduciary Rule
Practical Law Legal Update w-005-8320 (Approx. 4 pages)
Trump Administration Issues Executive Order on Financial Regulation and Memo on DOL Fiduciary Rule
by Practical Law Finance
| Published on 07 Feb 2017 • USA (National/Federal) |
The Trump administration has issued an executive order mandating a review of certain banking and financial services regulations and outlining the administration's core principles for financial regulation. The administration also issued a memorandum on the Department of Labor's proposed fiduciary rule for financial professionals.
On February 3, 2017, the Trump administration:
- Issued an executive order (EO) outlining the administration's core principles for financial regulation (see Executive Order on Financial Regulation).
- Issued a memorandum on a Department of Labor (DOL) rule that imposes fiduciary duties on all financial professionals who work with retirement plans (see Memorandum on DOL Fiduciary Rule).
Executive Order on Financial Regulation
As outlined in the EO, the Trump administration's core principles for financial regulation include:
- Prohibiting taxpayer funded bailouts.
- Fostering economic growth through a more a rigorous regulatory impact analysis that addresses "systemic risk and market failures, such as moral hazard and information asymmetry."
- Enabling American competitiveness in domestic and foreign markets.
- Advancing American interests during negotiations and meetings concerning foreign financial regulation.
- Restoring accountability and rationalization of federal financial regulatory agencies.
- Empowering Americans to make independent and informed financial decisions in the marketplace.
The EO directs the Secretary of the Treasury and the heads of the 15 member agencies that compose the Financial Stability Oversight Counsel (FSOC) to report to the executive branch within 120 days of the date of the EO (the initial report), and periodically thereafter, on the extent to which all existing laws, treaties, regulations, guidance, reports, and recordkeeping requirements comport with these core principles. Additionally, both the initial report and any subsequent reports must also identify any existing financial regulations that inhibit the core principles.
The Trump administration has vowed to cut bank and financial services regulation, and has specifically targeted certain provisions of the Dodd-Frank Act (see Legal Update, Potential Impact of 2016 US Presidential Election of Financial Services Regulation).
Memorandum on DOL Fiduciary Rule
Also on February 3, 2017, the administration issued a memorandum that directs the DOL to review a regulation issued on April 8, 2016 by the DOL that imposes fiduciary duties on all financial professionals who work with retirement plans and currently scheduled to become effective on April 10, 2017 (see Fiduciary Investment Advice Toolkit).
The memorandum directs the DOL to examine the fiduciary rule and determine if it negatively impacts investors and retirees or is otherwise inconsistent with the priorities of the Trump administration.