President Trump said Tuesday that he’s looking to loosen restrictions on consumer lending as he and Republican colleagues push to roll back the Dodd-Frank Act.
Trump said during a White House event Tuesday he wants to give banks the freedom to loan to customers deemed too risky under Dodd-Frank, the sweeping post-crisis financial rules enacted in 2010.
“We’re looking now at Dodd-Frank because we have to free up so that the banks can loan money to great people, because they were restricted, Trump said at the “Conversations With the Women of America” event.
Banks are making record profits almost a decade after the crisis, thanks in part to a booming stock market and low unemployment. While large banks have been able to adapt to the costs of Dodd-Frank, bank industry advocates say the law suffocates smaller firms with fewer resources.
A bipartisan Senate bill to cut back Dodd-Frank expands the range of which loan applicants can be considered qualified borrowers. The measure, sponsored by Senate Banking Committee Chairman Mike Crapo (R-Idaho), is backed by enough Democrats to beat a filibuster.
While the White House supports the bill, House Republicans say its lack of restraints on the Consumer Financial Protection Bureau (CFPB) makes it too weak to support.
Dodd-Frank set stricter standards for who could qualify for mortgages or loans after hundreds of thousands of foreclosures derailed the economy in 2008. Banking industry advocates say those rules prevent banks from lending to longtime, trustworthy customers that fell on hard times.
Trump recounted how “a person came up to me at a recent stop” to explain how his bank rejected him after years of service because of Dodd-Frank.
“[He] said ‘You know, all my life I did business with a certain bank, and now all of a sudden they can’t do business with me. I’ve always paid my debts, I’ve always paid my loans, the bank loves me, but they’ve been prohibited from doing,’” Trump said.
“Now they’re going to be doing business with that person again.”
“We’re doing a real number on it,” he added, referring to Dodd-Frank.
Trump met with bankers and their lobbyists at the White House several times last year on how they’d like to change Dodd-Frank, and he ordered the Treasury Department to review the law for potential changes.