‘Major Haircut’
On Tuesday at a meeting of business executives, Trump reiterated his pledge to rollback financial regulations, saying his administration plans a “very major haircut on Dodd-Frank.” Wall Street, however, seems to be losing faith that it will happen any time soon. The KBW Bank Index of 24 financial companies is now down for the year after surging 30 percent in the fourth quarter of 2016.
Stein declined to comment for this story. Bowen said in a statement that “it would be a mistake to repeal Dodd-Frank and all the evidence-based, smart regulations that have been put in place over the last seven years." She said she looks forward to working with the commission’s Republican chairman to "consider how we can make our regulations better."
Despite the talk of cooperation -- neither commissioner has publicly threatened to use the veto power -- many Democrats see Stein and Bowen as an important bulwark.
Indeed, their records show they’ve been willing to stand up to the financial industry.
Stein, for example, used SEC procedural rules to demand additional penalties for Wall Street banks settling enforcement cases, turning what had been an obscure issue into a flashpoint at the agency and on Capitol Hill. Stein’s effort has been championed by Democratic Senator Elizabeth Warren of Massachusetts, a leading critic of financial firms.
Tough Stance
At the CFTC, which oversees the $544 trillion swaps industry, Bowen has also taken a tough stance.
In 2015, she opposed a CFTC rule that benefited Goldman Sachs Group Inc. and other banks by freeing them from having to post billions of dollars of collateral for certain derivatives trades. Bowen also took on high-frequency traders in November when she supported making it easier for regulators to access their secret algorithms.
The two Democratic commissioners’ views stand in stark contrast to those of Trump’s picks to head the SEC and CFTC. Clayton and Giancarlo have made it clear they’re eager to follow through on the president’s agenda.