WASHINGTON (CN) – President Donald Trump has thrown himself into both sides of a brewing fight over financial regulations by showing interest in a New Deal-era banking provision while also supporting the repeal of Dodd-Frank, according to an AP report.
In a Monday interview with Bloomberg News in the Oval Office, Trump said he was “looking at” the idea of bringing back the Glass-Steagall Act, a 1933 law that required commercial and investment banks to be distinctly separate.
“There’s some people that want to go back to the old system, right?” Trump told Bloomberg. “So we’re going to look at that.”
The AP report goes on to note that shortly after the comments about Glass-Steagall went live, Trump appeared with members of the Independent Community Bankers Association. They wore red “Make Community Banking Great Again” hats, trumpeting the impending demise of Dodd-Frank, which put in place strict regulations on banks and Wall Street in the wake of the 2008 financial collapse.
Trump straddled both positions during his campaign as well, claiming to support a law aimed at breaking up big banks as well as repeals of the Obama administration’s attempt to do just that.
Trump could have allies on both measures, though repealing Dodd-Frank has essentially no support from Democrats. As detailed in the AP report, The House Financial Services Committee on Tuesday began its markup of a bill from Texas Republican Rep. Jeb Hensarling that would repeal some 40 provisions contained in Dodd-Frank, including one that prevents the country’s largest banks from trading for their own profits.
“Under Dodd-Frank, consumers are paying more and getting less,” Hensarling said in a statement when announcing his bill, the Financial CHOICE Act. “Their costs have gone up, and they have fewer choices, more hassles and less access to credit. True consumer protection comes from competitive, transparent and innovative markets that are vigorously policed for fraud and deception. This is precisely what the Financial CHOICE Act will do.”
But a bipartisan bill introduced last month in the Senate could deliver Trump a win in reinstating the Glass-Steagall protections. Sponsored by liberal Democrat Sen. Elizabeth Warren of Massachusetts and cosigned by former Republican candidate for president Sen. John McCain of Arizona, the 21st Century Glass-Steagall Act borrows from the 1933 law and seeks to reinstate separations between investment and traditional banks that fell during the Clinton administration.
The bill would prevent federally insured banks that receive deposits from customers from being part of investment banks, which proponents like Warren argue would reduce the risk of a financial crisis and make banks at the center of the financial system smaller and less likely to require a government bailout.
The proposal would also prohibit people sitting on the board of a federally insured bank from holding the same position for an investment bank, insurance company or similar institution.
Also signing onto the bill are Democrat Sens. Maria Cantwell of Washington and Kirsten Gillibrand of New York. Both Independents in the Senate, Sens. Bernie Sanders of Vermont and Angus King of Maine, signed on as well.
“Our 21st Century Glass-Steagall Act of 2017 would return banking ‘back to the basics’ and go far to restore Americans’ confidence in the banking system,” McCain said in a statement when the bill was introduced on April 6.
The bill is the group’s third attempt to reinstate Glass-Steagall, having first introduced the same legislation in 2013. The current iteration is in the Senate Banking, Housing and Urban Affairs Committee – the same place where the first version died.