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Trump’s Economic Era

President Trump said when he signed an executive
order calling for less regulation.

The Dodd-Frank law impacts growth by
increasing regulations on selected businesses. J.P.
Morgan has hired 10,000 compliance officers to handle
its mandates. According to the Federal Deposit
Insurance Corporation, more than a thousand
commercial banks have disappeared because of the law.
Government figures also indicate that the country is
losing one community bank or credit union a day under
the weight of government regulations.
Dodd-Frank was supposed to limit mortgage risk
by establishing standards, but these requirements have
been ineffectual partly because mortgage transactions
by Fannie Mae and Freddie Mac are exempt. Fannie
and Freddie are government-sponsored enterprises that
play a significant role in the mortgage industry. Both
Fannie and Freddie buy mortgages from lenders, pool
them together and sell them as mortgage-backed
securities to investors.

The banks, which the government considers too
big to fail, and therefore too big to jail, are protected by
the Dodd-Frank Law. These banks make up about 60%
of GDP, and they control nearly 50% of all bank
deposits. President Trump has issued an executive
order that calls for a comprehensive review of the law.
Both the House and Senate have passed legislation
easing the burden of Dodd-Frank on small banks.

Bail-ins

In a bailout, the government makes creditors
whole by using taxpayers’ money. With a bail-in, big

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