President Donald Trump on Friday is expected to scale back on financial regulations, including a review of the Dodd-Frank Act enacted in 2010 as a response to the 2008 financial crisis.
In multiple executive orders, Trump will delay the Labor Department's "fiduciary rule" set to go into effect later this year. Proponents of the rule say that it requires financial advisers to put their clients' best interests ahead of their own.
Financial advisers have opposed the rule because they would rather be held to a "suitability" standard than the "fiduciary" standard which costs more money and is a higher level of accountability than previously required of advisers. A "suitability" standard simply requires an adviser meet a client's need and objective.
Should it be implemented, the "fiduciary" standard is estimated to cost the financial services industry $2.4 billion per year.
Trump will also tackle the Dodd-Frank legislation, which requires banks to comply with regulations to prevent another financial crisis. The legislation was deemed a "disaster" by Trump and criticized by smaller banks who said the regulations were too burdensome.
Conservatives opposed to the legislation argue that it doesn't fully address what caused the financial crisis — which they say was the U.S. government's housing policies.
Conservatives also argue that Dodd-Frank stifles economic growth which could in turn be the catalyst for another economic crisis.
Trump met with his economic advisory council Monday morning and briefly spoke to reporters about his plans.
"We expect to be cutting a lot out of Dodd-Frank," he said, according to the Washington Post. "Because frankly, I have so many people, friends of mine, that had nice businesses, they just can't borrow money ... because the banks just won't let them borrow because of the rules and regulations in Dodd-Frank."
Trump's White House National Economic Council Director Gary Cohn told the Wall Street Journal that Trump's executive order will instruct the U.S. Treasury to revise Dodd-Frank's regulations.
"We have the best, most highly capitalized banks in the world, and we should use that to our competitive advantage," he said. "But on the flip side, we also have the most highly regulated, overburdened banks in the world."
While Trump's exact plans are still uncertain, Forbes reported that the greatest changes to the legislation are likely to impact the Financial Stability Oversight Council, which is supposed to resolve issues with large failing firms without a government bailout. The Volcker Rule, a controversial mandate that prevents banks from engaging in speculative investing with depositor funds, is also expected to reviewed and possibly changed.
A Manhattan businessman, Trump's aggressive orders are expected to draw backlash from Democrats who distrust big banks and want regulations and oversight in place.
"President Trump's action will make it harder for American savers to keep more of what they earn," Sen. Sherrod Brown (D-Ohio), a member of the Banking Committee, said in a statement.
Trump's orders come as the Labor Department announced the addition of 227,000 jobs in January — the largest growth in four months.