It has taken seven years to put in place the regulatorystrictures imposed on Wall Street after the financial crisis. Theywon't be removed fast or easily.

President Donald Trump's directive Friday that set in motion ascaling back of the Dodd-Frank Act was more pageantry than policy,said lawyers and former government officials who worked on the 2010law. While the expectation for quick action sent bank stocks higherFriday, numerous roadblocks remain before lenders get relief.

Chief among the hurdles is that Trump doesn't have any of hisappointees running the agencies that oversee financial rules.Congress, too, will have to pass new legislation for manyDodd-Frank regulations to be eased. And the president's decision toput two former Goldman Sachs partners in charge of the effort —less than a decade after the bank's traders helped bring theeconomy to the edge of collapse — galvanized opposition fromDemocrats.

Trump's order is “more of a signal to the marketplace than realaction,” said Richard Hunt, who runs the Consumer BankersAssociation, a group that represents retail banks. “This is thesecond inning of a nine-inning regulatory rebalancing.”

Regardless of the timing, Trump's action demanding thatregulators produce a study on financial rules within 120 daysstarts the process of getting rid of safeguards the Obamaadministration enacted after the 2008 meltdown. Regulations the newadministration plans to target include a ban on proprietarytrading, a requirement that risky financial companies be subject totough Federal Reserve oversight, and rules for taking down failedbanks. The Consumer Financial Protection Bureau may also be on thechopping block.

A separate measure Trump signed, which may delay a controversialLabor Department rule requiring brokers who manage retirementaccounts to put their customer's interest first, is likely to havemore teeth and move more quickly, lawyers said. That directive wasembraced by much of the industry, which has long said theregulation will drive up their costs and make it harder to providefinancial advice to their clients.

Trump has promised to get rid of burdensome regulations onbusiness, though few thought he would embrace easing rules on WallStreet as much as he has. On the campaign trail, he billed himselfas an economic populist and often took shots at bankers. Trump's“Argument for America,” a two-minute advertisement that ran daysbefore the election, featured Goldman CEO Lloyd Blankfein in ansegment about corporate chieftains pocketing the wealth of Americanworkers.

Dimon's Advice

Now, ex-Goldman executives populate the top echelons of theTrump administration and two of them, National Economic CouncilDirector Gary Cohn and Treasury Secretary nominee Steven Mnuchin,are slated to be the point men on the Dodd-Frank rollback.

On Friday, Trump vented during that the law had made itdifficult for his business friends to get loans, and boasted to agroup of executives gathered at the White House that he was gettingfeedback on how to fix it from an ideal adviser: JPMorgan Chase& Co. Chief Executive Officer Jamie Dimon.

Democrats seized on the comments.

Trump made his announcement “literally standing alongside bigbank and hedge fund CEOs,” said Democratic Senator Elizabeth Warrenof Massachusetts. She's expected to be among those leading thefight to prevent an overhaul of Dodd-Frank in the Senate, wherepassing a law requires 60 votes to overcome a filibuster.Republicans hold just 52 seats.

Senator Bernie Sanders of Vermont, the independent who vied forthe Democratic presidential nomination in 2016, said on CNN Sundaythat Trump was a “fraud” who's working for Wall Street. “Heappoints all these billionaires. His major financial adviser comesfrom Goldman Sachs. And now he is going to dismantle legislationthat protects consumers,” Sanders said.

Getting Congress to repeal Dodd-Frank, or pieces of it, would bethe cleanest way to eliminate its requirements, because Trump can'twipe laws off the books on his own.

For example, the consumer agency, which has drawn complaintsfrom banks for enforcement overreach, will continue to operateabsent new legislation. Even modifying it by replacing its directorwith a five-member board or requiring its budget to be approved bylawmakers — reforms suggested by Republicans and the industry —would take an act of Congress.

But Trump officials argued that many of the regulatory changesthey're seeking could be done at the various agencies that wrotethe rules implementing Dodd-Frank.

Help From Congress

“We are going to engage the House, we are going to engage theSenate,” Cohn said in an interview with Bloomberg Television. “Wecan do quite a bit without them, but the more help we get fromCongress, the better off we're all going to be.”

Trump nominees aren't yet in control of the main agencies thatoversee the financial industry, including the Treasury Department.Mnuchin, who's awaiting a full Senate vote, is the head of thefederal council of regulators, which Trump charged with reviewingDodd-Frank.

Other agencies that are being staffed by acting chairmen, or arestill being run by Barack Obama appointees, include the Securitiesand Exchange Commission, the Federal Deposit Insurance Corp., theCommodity Futures Trading Commission and the Office of theComptroller of the Currency. The Federal Reserve, which overseesthe biggest banks, has two vacancies on its Board of Governors,including the one responsible for bank rules.

Another issue that could impede changing rules is the byzantineprocess for approving regulations — one reason that Dodd-Frank tookyears to implement. Rules must be written, offered for publiccomment, often over several months, and deliberated internallybefore there is a final vote to approve them.

In addition, some of the most onerous and unpopular regulationshave been put together by multiple agencies. In the case of theVolcker Rule, which prohibits banks from making market bets withtheir own capital, it took years of negotiations to get the fiveregulators involved to agree. To revise Volcker, each agency wouldneed to sign off on changes.

“The time frame for this, it's going to take a while,” saidMichael Barr, who helped write Dodd-Frank as a Treasury Departmentofficial in the Obama administration.

Bloomberg News

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