President Trump's executive order will scale back major regulations, reviewing the Dodd-Frank law and halting a retirement advice rule. Fred Katayama reports.
Monumental changes could be in store for big financial firms. U.S. President Donald Trump's executive order to be signed Friday will do two things aimed at scaling back regulations: review measures aimed at reforming Wall Street and halt the rule aimed at protecting consumers when getting retirement advice. Trump has called the so-called Dodd-Frank Wall Street reforms as a "disaster." He wants the Treasury to explore how the measures could be fixed. Changes could include the "Volcker rule" that restricts how banks can make bets with their own money. Mizuho Securities USA chief economist Steven Ricchiuto says the law made it harder for banks to lend. SOUNDBITE: STEVEN RICCHIUTO, CHIEF ECONOMIST, MIZUHO SECURITIES USA, (ENGLISH) SAYING: "If you look at things, for example, the loan-to-deposit ratio, for U.S. banks. In the postwar period, we've never been this low at this point in the business cycle. So there really is a significant impact that this rule has had on the availability for credit. And one of the reasons why we don't see small businesses invovled in this recovery, which are a big employer, is the fact that the availability of credit has been restricted. It's also one of the reason we don't have a housing cyclical upturn." Separately, Trump wants the Labor Department to examine whether the retirement rules should be revised or scrapped altogether. Set to take effect in April, that rule requires brokers to act in the best interests of their clients when advising them about their retirement accounts. Currently, brokers are only required to recommend investments deemed "suitable" to their clients.