President Trump Can’t Comb Over the Facts, Dodd-Frank Doesn’t Need a “Major Haircut”
In Meeting with Wall Street Leaders and Corporate Executives, Trump Backed Further Away from His Commitment to “Drain the Swamp” and Stand up for Hard-Working Americans
WASHINGTON, D.C. – At a CEO “town hall” today, President Trump said he wanted to give Dodd-Frank a “very major haircut.” On its face, the statement raises a few important questions:
- Why is he holding a “town hall” with CEOs rather than everyday Americans?
- How can he protect the struggling American workers he promised to fight for if he wants to dismantle a law that defends them from abuse by big banks and predatory lenders?
- How will he ever “drain the swamp” if he is only giving special interests a seat at the table?
“Not even Donald Trump can comb over the fact that he has completely backed away from his promise to ‘drain the swamp.’ As he meets with powerful CEOs, the everyday Americans who elected him are left in the dark about how giving Dodd-Frank a ‘major haircut’ could possibly help them,” said Karl Frisch, executive director of Allied Progress.
He continued, “Dismantling Dodd-Frank–important reforms designed to hold Wall Street accountable and protect Americans in the wake of the 2008 financial crisis–would serve only to further stack the deck against the hard-working men and women Trump promised to help. The president continues to make clear that his top priority is returning power to the big banks and financial institutions that helped wreck our economy and cost millions of Americans their homes and retirement savings.
At the event Trump also said that his administration is “absolutely destroying” regulations that are keeping banks from lending to small businesses and entrepreneurs though, as the following facts demonstrate, there is no evidence that Dodd-Frank has kept such lending from occurring:
- FACT: Banks are highly profitable and lending is chugging along. The FDIC confirmed in its latest annual report that lending is chugging along and banks are highly profitable [“FDIC Quarterly Banking Profile, Fourth Quarter 2016,” Federal Deposit Insurance Corporation website, accessed April 4, 2017.]
- FACT: The issue of small business lending is one of demand, not supply. Various authorities, among them Federal Reserve Chair Janet Yellen and centrist think tank Third Way, have made clear that demand, not supply, is the problem for small business lending. [Kate Rogers, “Why Small Businesses Don’t Want a Loan,” CNBC, February 26, 2015; and David Brown and Emily Liner, To Grow New Businesses, Improve Access to Credit, Third Way, September 20, 2016, accessed April 4, 2017.]
- FACT: Banking lobbyists are bragging about all the loans they’re making to small businesses. The American Bankers Association brags about all loans that banks are making to small businesses. [American Bankers Association, America’s Banks Social Media Guide, (2017): 6, accessed April 4, 2017.]
- FACT: Small businesses rank lending at the bottom of a list of business-related problems. The National Federation of Independent Businesses surveyed “small-business owners to evaluate seventy-five business-related problems” and lending was near the bottom of the list with access to long-term credit ranking 69 (down from 56 in 2012) and access to short term credit ranking 70 (down from 58 in 2012). [Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit, “Testimony of Ms. Holly Wade, Director of Research and Policy Analysis,” on behalf of the National Federation of Independent Businesses, March 28, 2017.]
To speak with Karl Frisch about Dodd-Frank or Trump’s comments, please contact Tucker Middleton at 919-649-3741 or tucker@alliedprogress.org.
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Allied Progress is a nationwide, progressive advocacy organization that uses hard-hitting research and creative campaigns to hold Wall Street and powerful special interests accountable. Since launching in 2015, the organization has led high-profile campaigns on several issues including reforming the payday lending industry and exposing the those working to cripple the Consumer Financial Protection Bureau (CFPB).