Former Massachusetts congressman Barney Frank lambasted President Donald Trump’s executive order aimed at reversing the financial reform law he authored, saying that the action does nothing.
Mr Trump signed two executive orders before the weekend that would relax Dodd-Frank, the finance reform law signed by President Barack Obama in 2010, to tighten regulations on US financial institutions in the aftermath of the 2008 economic collapse.
Among the many achievements he highlighted in his farewell speech, Mr Obama cited his efforts as saving the country from the historic recession. That success was due in large part to Dodd-Frank.
“Much of that law is popular,” Mr Frank said in a radio interview Sunday morning. “The executive order that the President offered with a lot of hype has no specifics. In fact, it doesn’t do anything.”
Mr Trump campaigned on “draining the swamp” and expelling Wall Street influence from Washington. But during his first two weeks in office, he has by and large demonstrated that key players in American finance have an important ally in the White House.
“We expect to be cutting a lot out of Dodd-Frank because, frankly, I have so many people, friends of mine, who have nice businesses who can’t borrow money,” Mr Trump said before signing the order.
“They just can’t get any money because the banks just won’t let them borrow,” he added, “because of the rules and regulations in Dodd-Frank.”
But Mr Frank was quick to correct the President, who still has significant ties to his business Trump Organisation.
“There are no restrictions on lending in this bill,” he said. “There are restrictions on the manipulation of derivatives of complex financial instruments like the ones AIG used that got people into serious trouble.”
Mr Frank explained that he fears a return to the conditions that led to the bubble burst in 2008.
“What I’m afraid of is that we are going to get back to the period when large financial institutions, to make some short-term money, get themselves into situations where they won’t be able to pay off their debt and we will get back into a crisis,” he said.
His concerns aside, Mr Frank remains confident that the President will fail in his quest to repeal the law.
“I do not think he’s going to get 60 senators to vote to get rid of all this,” he said. “So what you then have, I believe, is he’s going to appoint people who won’t enforce the law.”