The financial services industry can expect deregulation after the election of President-elect Donald Trump and a Republican majority in both houses of Congress. The expected changes will become the latest chapter in a century-old expansion and contraction of federal financial regulations.

Following the financial crisis of 2008, the U.S. Congress and the Obama administration increased regulation, created new and consolidated old regulators and insulated some oversight from congressional budget and appropriation power. With the new unified Republican government, we can expect legislation that decreases regulation, decentralizes regulators and increases congressional oversight. Here are some of the most significant targets:

The Dodd-Frank Act

Congress passed the Dodd-Frank Act in direct response to the financial crisis that "nearly crippled the U.S. economy beginning in 2008," according to the Senate.

Only six years after the Dodd-Frank Act became law, the 2016 Republican Party Platform referred to the Dodd-Frank Act as "the Democrats' legislative Godzilla."

Trump plans to "dismantle" the Dodd- Frank Act. This would probably include repealing the codification of the Volcker Rule and the Durbin Amendment and reducing the power (or the existence) of the Consumer Financial Protection Bureau.

The Volcker Rule

Section 619 of the Dodd-Frank Act codified the so-called "Volcker Rule," named for former Federal Reserve Chair Paul Volcker.

The Volcker Rule prohibits commercial banks and certain of their affiliates from trading securities for their own purposes and restricts commercial banks' relation- ships with hedge funds and private equity funds.

Trump praised Volcker's performance and policies as Federal Reserve Chair, but has not clearly expressed a view about the eponymous rule. House Republicans, however, already are pursuing legislation to repeal the Volcker Rule, which we can expect to be reintroduced early in the 115th Congress.

The Durbin Amendment

Part of the Dodd-Frank Act, the Durbin Amendment required the Federal Reserve Board to regulate the transaction fees for processing electronic debit transactions and the network fees for the software and the infrastructure to route those transactions, known as debit card "swipe fees." The price limits created by the Federal Reserve Board had the unintended (albeit predictable) consequence of passing on the costs to the consumers.

A federal district court struck down the so-called "swipe fee" cap for debit cards in 2013. That decision is on appeal to the D.C. Circuit, which could decide the regulation's fate before the new Administration and Congress take office. If the court of appeals upholds the regulation, the 115th Congress would probably pursue repeal of the Durbin Amendment.

CFPB

The Dodd-Frank Act created the Consumer Financial Protection Bureau to centralize accountability for enforcing federal financial laws that protect consumers.

The CFPB earned the ire of Congressional Republicans for being the only non-appropriated federal agency led by a single director who could be removed only for cause. In 2016, that structure was declared unconstitutional by the D.C. Circuit, which remedied the constitutional defect by ruling that the president may remove the director at will. The Republican Party Platform called for the CFPB to be abolished.

It is easier to create a new federal agency than to abolish an existing one. The usual route to dissolving an agency is to decrease its statutory authority or its budget (or both) and later transfer what remains to another agency. In the financial services sector, this happened to the Resolution Trust Corporation, the Federal Home Loan Bank Board, and the Office of Thrift Supervision. The 115th Congress and Trump Administration will probably try to add the CFPB to the list of former agencies.

The Financial CHOICE Act

The proposed Financial CHOICE Act of 2016 — introduced in June in the 114th Congress by Representative Jeb Hensarling, who chairs the House Financial Services Committee — would reverse significant parts of the Dodd-Frank Act.

The CHOICE Act would repeal the Volcker Rule and the Durbin Amendment. It would also rename the CFPB the "Consumer Financial Opportunity Commission" and would change agencies with a single head to bipartisan commissions. The CHOICE Act would subject all financial services regulators to a traditional budget and appropriations process. It also would impose a less deferential standard for courts reviewing agency actions by financial services regulators.

It is difficult to imagine the more dramatic aspects of the CHOICE Act — such as subjecting all financial regulators to congressional oversight and repealing the Chevron doctrine, which governs the interpretation of ambiguous statutes — becoming law soon. The Republican-con- trolled Congress will probably reintroduce the Financial CHOICE Act and, with a sympathetic President, could quickly reduce the power of the CFPB and erase the Dodd-Frank Act.

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