On February 3, 2017, President Trump issued an executive order setting out “Core Principles for Regulating the United States Financial System” and requiring review of existing regulations to determine whether they conform to those core principles. He also, in a memorandum to the United States Department of Labor, delayed the April effective date of a regulation imposing a fiduciary standard on certain financial professionals who advise clients, including pension funds, about investments.

These are the administration’s first steps towards revising or dismantling major portions of the 2010 Dodd-Frank Act, which President Trump criticized as a “disaster” on which he vowed to “do a big number.”

Specifically, the executive order directs the Treasury Secretary to consult with the member agencies of the Financial Stability Oversight Council (FSOC) and to issue a report with recommendations for changes to the law and the accompanying regulations to bring them into compliance with the executive order's “Core Principles.”

It is unlikely that Dodd-Frank will be repealed in its entirety, particularly since the incoming Secretary of the Treasury, Steven Mnuchin, in his confirmation hearings voiced support for the Volcker Rule, which bars banks from proprietary trading. Rather, it is expected that the target will be specific provisions viewed as burdensome and unnecessary, as well as those provisions with high compliance costs. The executive order does not in itself affect any existing rules or regulations. It is the actions taken in response to it that will determine the shape of future financial regulations. Some regulations under Dodd-Frank can be rolled back by regulation (subject, of course, to established notice and public comment requirements), but other changes, however, would require Congressional action.

Although a full repeal of Dodd-Frank is unlikely, the provisions that are most likely to be under consideration for amendment or revocation include the following:

• The Volcker Rule limitation on banks trading for their own accounts.

• The Consumer Finance Protection Bureau's oversight of consumer financial products.

• Capital requirements for banks, including concentration limits and notification requirements.

• The Federal Deposit Insurance Corporation's orderly liquidation authority with respect to institutions under its jurisdiction.

• FSOC authority to designate organizations as "systematically important financial institutions" and its authority to wind them down.