This story appeared in Bank Digest.
Appearing at the Treasury Building, President Donald J. Trump signed two Presidential Memoranda that affect the ability of the Financial Stability Oversight Council to designate nonbank financial institutions as systemically important financial institutions and the bank regulators to exercise the orderly liquidation authority found in Title II of the Dodd-Frank Act. A separate Executive Order instructed Treasury Secretary Steven Mnuchin to begin the process of tax simplification.
The Presidential Memorandum affecting the designation of nonbank SIFIs calls for a 180-day review to ensure that the SIFI designation is "a fair and transparent process." The Presidential Memorandum on the orderly liquidation authority provides that the Treasury Department conduct an analysis to ensure that the OLA does not encourage excess risk-taking, moral hazard, and exposure to taxpayers.
Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) said that actions to undermine Wall Street reform provisions enacted after the financial crisis "encourage Wall Street's risky behavior and leave taxpayers and our economy exposed to another catastrophe." House Financial Services Committee Chairman Rep. Jeb Hensarling (R-Texas) said the president "deserves tremendous praise for taking decisive action to protect taxpayers and our economy," while Committee Ranking Member Maxine Waters (D-Calif) said that "these two executive actions are two steps back to the risky financial system that brought us the Great Recession and very nearly dragged our economy into a death spiral."