This morning, President Trump began to fulfill his campaign promise to “get rid of Dodd-Frank,” putting his name to an executive order that directs federal regulators to revise the rules established by the 2010 financial reforms. While this latest directive from the Oval Office is largely symbolic and does little to change existing regulations, consumer advocates say there are still reasons to be concerned.

The Dodd-Frank reforms — born out of the financial meltdown that began in 2008 with the collapse of the housing market — established an array of new regulations for banks, credit card networks, and lenders. In addition to involving all existing financial regulatory bodies, the Dodd-Frank laws also resulted in the creation of the Consumer Financial Protection Bureau, an independent federal agency tasked with reining in deceptive and anti-consumer practices in a variety of financial products and services.

Detractors of these reforms and of the CFPB contend that they are doing more harm than good, with White House spokesman Sean Spicer today arguing — without pointing to any evidence to support these claims — that Dodd-Frank was “disastrous” and “crippling our economy’s ability to grow.”

“Friends Of Mine”

Trump signed the executive order [PDF] shortly after a morning meeting with his advisory council of CEOs, which includes Elon Musk of Tesla, Mary Barra of General Motors, and Jamie Dimon, the JPMorganChase CEO whom Trump once called the “worst banker in the United States,” and who reportedly turned down an offer to be the next Treasury Secretary.

“There’s nobody better to tell me about Dodd-Frank than Jamie,” said the President this morning, adding that, “We expect to be cutting a lot out of Dodd-Frank, because frankly I have so many people, friends of mine, that have nice businesses and they can’t borrow money. They just can’t get any money because the banks just won’t let them borrow because of the rules and regulations in Dodd-Frank.”

However, as the order itself shows, it merely provides regulatory agencies with a list of “Core Principles” — enable competition, more efficient regulation, prevent bailouts, among others — and asks the heads of these agencies to report back to the President within 120 days “on the extent to which existing laws, treaties, regulations, guidance, reporting and recordkeeping requirements, and other government policies promote the Core Principles.”

No Immediate Effect

Fundamental to the concept of checks-and-balances is the notion that the President can’t simply change or undo laws with the stroke of a pen.

What the White House can do, however, is direct the agencies immediately under its authority to take a new look at existing regulations to determine whether they feel these rules were implemented properly. If an agency does find fault with a regulation, it can revise or rescind that rule.

Yet again, that’s not as easy as it sounds. As we noted when covering President Trump’s executive order requiring that two existing regulations be stricken for every new rule put in place, the process of amending or rescinding a regulation is identical to the process of creating a new rule. Even on an expedited schedule, it would require months — including a 30-day public commenting period — to gut a single existing rule.

In Congress’s Court Now

If the administration is going to seek significant changes or repeal of Dodd-Frank, it’s going to have to rely on Congress to pass new laws or amend existing ones.

Today’s executive order, while having no authority to direct Congress to do anything, does give lawmakers the signal that the White House appears to be on board with those lawmakers who have opposed Dodd-Frank since 2010.

“The protections against Wall Street recklessness were codified in the law,” explains Rohit Chopra, a former top CFPB official who is now with the Consumer Federation of America. To achieve deregulation, “The White House will need Congress to sign off.”

Personnel Matters

Many of the regulatory matters contained in Dodd-Frank are left up to the various regulatory agencies to interpret. Thus, as the financial regulators move forward with reviewing, revising, implementing, and enforcing the law, much will be left up to the subjective opinions of those running these agencies.

For example, the law didn’t establish a proper level for “swipe fees” — the amount of money a bank can charge a merchant for each debit card transaction — but instead directed the Federal Reserve to sort the specifics of that rule out. Likewise, the law didn’t direct the CFPB to take any specific action with regard to prepaid debit cards, but to investigate and determine what protections are needed.

“A lot of the regulations of Dodd-Frank required a bit of a cop-on-the-beat if you will, to ensure enforcement and if you have a different cop-on-the-beat, they enforce different rules, or they enforce the rules differently,” one financial policy analyst explained to Reuters, adding that “what one regulator would view as okay, another might say it’s not okay.”

Former CFPB official Chopra tells Consumerist that most of the Dodd-Frank regulations boil down to a simple matter of law enforcement.

“Will people be chosen who are willing to hold powerful firms accountable,” he asks, “Or will they help these firms sweep things under the rug?”

This is one of the reasons why there is currently a legal battle going on over the CFPB’s structure. Even though the Federal Reserve, along with a handful of independent federal agencies, have directors that can’t be removed from office at the whim of the President, a federal appeals court recently ruled that the CFPB’s sole directorship is unconstitutional, which is exactly the term that Spicer used when referring to the Bureau during his Friday afternoon press conference.

The full Court of Appeals for the D.C. Circuit is currently deciding whether to re-hear this matter. If the CFPB loses that appeal, it would likely mean that CFPB Director Richard Cordray would be dismissed immediately and replaced with a Director more amenable to the administration’s soft-touch approach to regulation.

“That would be a big giveaway to lawbreaking companies,” Chopra tells Consumerist, noting that under Cordray’s leadership the CFPB has returned billions of dollars in refunds to consumers. “Attempts to weaken the CFPB should fall on deaf ears, if politicians are listening to consumers.”

Blessing Or A Curse?

Despite the fact that the order has no immediate effect on Dodd-Frank or the financial regulatory agencies, the banking industry is grateful.

“We appreciate the administration’s support for pro-growth policies so banks can go even further in helping communities and our economy thrive,” reads a statement from the American Bankers Association. “Reducing the strong regulatory headwinds banks face is critical to increasing lending that drives job creation across America. A sensible and careful review of Dodd-Frank and other financial regulations can and should strengthen those goals.”

The order received a noticeably less glowing reception from consumer advocates and some lawmakers.

“Donald Trump talked a big game about Wall Street during his campaign – but as President, we’re finding out whose side he’s really on,” says Sen. Elizabeth Warren (MA), who was instrumental in creating the CFPB. “The Wall Street bankers and lobbyists whose greed and recklessness nearly destroyed this country may be toasting each other with champagne, but the American people have not forgotten the 2008 financial crisis — and they will not forget what happened today.”

“Dodd-Frank was put into place to raise standards for financial firms and ensure consumers are treated more fairly and honestly,” says Laura MacCleery, vice president of consumer policy and mobilization for Consumer Reports. “If we roll back these critical standards, we will once again be putting consumers and the economy at an intolerable risk.”

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