Get ready for four years of light-touch regulation.
No, Dodd-Frank won’t be repealed, as President-Elect Donald Trump has promised. Filibusters by Elizabeth Warren, Sherrod Brown and other Senate Democrats will assure that as well as blocking new legislation that could lessen the regulatory burden on financial advisers.
And no, the fiduciary rule won’t go away immediately, as some of his advisors have claimed. Moreover, his advisors are hardly unanimous about regulation. Activist investor Carl Icahn, who Trump has frequently cited as a possible cabinet member, said today he did not favor rolling back Dodd-frank.
But look for the Trump Administration to use the power of the purse to bring some areas of advisor enforcement to a standstill while his Congressional supporters add anti-regulatory provisions to spending legislation Democrats will be powerless to stop.
For the last two years, Republicans in the House and the Senate have tried to attach anti-fiduciary rulemaking and enforcement provisions to Labor Department budgets, only to be stopped in their tracks by the certainty of an Obama veto and the ability of Senate Democrats to muster the votes of only one-third of the Senate plus one to sustain his action.
That veto threat is out the window for anti-fiduciary and other anti-regulatory provisions Congressional members of Trump’s party want to put into spending legislation necessary to keep the government running.
Keep in mind, too, that Congressional appropriations for federal agencies are usually very broad and agency heads have wide discretion how to use and not use funds.
With the end of President Obama’s term, the nominations of Republican’s Hester Pierce and Democrat Lisa Fairfax to the SEC expire as well.
Without them, the SEC has been down from five commissioners to three this year.
The regulator could be operating with three commissioners or fewer well into 2017 and beyond. Democrat Kara Stein’s term ends this year, but she is allowed to stay on until a replacement is confirmed.