Washington, D.C. — Today, President Donald Trump signed executive orders aimed at rolling back the Dodd-Frank Act, as well as the conflicts of interest rule, also known as the fiduciary rule. Marc Jarsulic, Vice President for Economic Policy at the Center for American Progress, issued the following statement:
President Trump’s intent to roll back financial reform is a craven attempt to put Wall Street’s interests ahead of American consumers and economic growth and return the United States to a vicious cycle of booms, busts, and taxpayer bailouts at the expense of American working families. To be clear: A wholesale dismantling of the Dodd-Frank Act, which appears to be a major end goal of President Trump’s administration, is a threat to the United States’ economic future.
It was just a few short years ago that the financial crisis wiped out 8.5 million jobs, sent unemployment over 10 percent, and left many families picking up the pieces after losing their homes, their wealth, or both. Meanwhile, Wall Street banks—including Goldman Sachs, National Economic Council Director Gary Cohn’s recent employer—received massive taxpayer-funded bailouts in order to prevent the collapse of the entire economy. Today, thanks to President Barack Obama’s financial reform legislation, the U.S. financial sector is safer, more stable, and more oriented toward serving the real economy, while consumers are better protected from the predatory practices and toxic products of the financial crisis. President Trump has made clear that he is perfectly willing to put that all at risk.
Joe Valenti, Director of Consumer Finance, added:
President Trump’s attack on the U.S. Department of Labor’s efforts to ban conflicts of interest in retirement advice—protecting retirement savers from unscrupulous and self-dealing financial advisers—is an equally appalling effort to put the interests of Wall Street ahead of working Americans and retirees. The rule’s principle is simple: Advisers must keep their client’s best interest in mind, rather than their own bottom line. Conflicted, improper advice has persisted for decades and costs American savers and retirees $17 billion per year through higher fees, lower returns, and investments that are not truly appropriate for customers. Undoing this rule means that more dollars will flow to investment and insurance companies through high-priced commissions and kickbacks, rather than helping savers and retirees chart a course through their golden years. This is a particularly dangerous reversal given that more than half of all working-age families run the risk of an insecure retirement. Just two weeks into his administration, President Trump comes to Wall Street bearing gifts, while leaving workers holding the bag.
For more information or to speak with an expert, contact Allison Preiss at [email protected] or 202.478.6331.