Donald Trump Is Breaking His Promise To Be Tough On Wall Street

If there was ever doubt that President Donald Trump ’s tough talk on big banks was an empty show, his first 12 days in office have put it to rest.

Trump is governing like a run-of-the-mill, deregulating Wall Street crony, despite his populist campaign rhetoric: His party’s platform pledged to return to the Depression-era Glass-Steagall Act, which broke up big financial institutions by separating investment and commercial banking; he vowed to close a tax provision that saves private equity managers billions of dollars; he lambasted his opponent for her ties to Goldman Sachs, and he assailed the bank’s CEO in an election ad.

On Monday, Trump made his first direct comments since his inauguration about the post-financial crisis bank regulation reform bill.

“Dodd-Frank is a disaster,” he said. “We’re going to be doing a big number on Dodd-Frank.”

Tossing out Dodd-Frank would mean gutting huge swathes of rules restricting big banks, including intricate capital standards and the annual stress tests regulators use to make sure banks won’t need to be bailed out to the independent Consumer Financial Bureau.

Indeed, the financial industry’s antipathy to the CFPB  the brainchild of bank foe Sen. Elizabeth Warren (D-Mass.) has Democratic aides and consumer advocates increasingly worried that Trump will fire its director, Richard Cordray. A mortgage company has brought forth a lawsuit questioning the president’s authority to do so. A three-judge federal appeals court panel ruled  in October that the president could fire the agency’s head for any reason. (The agency has asked for the full D.C. Circuit Court of Appeals to rehear the case .)

The White House did not immediately respond to a request for comment. 

In between claiming his rivals  Sen. Ted Cruz (R-Texas) and former Secretary of State Hillary Clinton were controlled by Wall Street, Trump peppered his campaign with pledges to undo Obama-era financial reform. But he undercut the idea that he would enact tough new oversight to replace Dodd-Frank even before being inaugurated by filling his new administration with a cadre of Goldman Sachs alumni. 

Steven Mnuchin, a former second-generation Goldman partner who founded a hedge fund and bought and ran a bank that foreclosed on tens of thousands of Americans during the housing crisis, was Trump’s pick to run the Treasury Department. Mnuchin was asked in his confirmation hearing what Trump’s idea of a new Glass-Steagall meant, specifically. His muddled response indicated that it simply referred to what, if anything, Trump ended up replacing Dodd-Frank with. (Senate Democrats are currently holding up Mnuchin’s nomination because he said in his confirmation hearing his bank didn’t use robo-signing. A Columbus Dispatch report used public documents to show Mnuchin’s claim was false .)

Trump chose Gary Cohn, who spent a decade as Goldman Sach’s president and chief operating officer, to serve as his director of the National Economic Council a job generally seen as the No. 2 economic policy role, after the Treasury Secretary.

And Anthony Scaramucci, a hedge fund salesman, event promoter and Goldman Sachs alum, was brought into the White House as a public liaison to government agencies and businesses. Scaramucci said in October that the Obama administration’s rule that cracked down on fees and bad advice to people saving for retirement was the equivalent to the Dred Scott decision . (He later called the comparison “a Dog Whistle for the media to demonstrate mock outrage .”) Steve Bannon, Trump’s chief strategist, was also an investment banker at Goldman Sachs in the late 1980s.

Indeed, what appears to be the first action of the new Trump administration reversing a planned decrease in the cost of a federal mortgage insurance program that helps working- and middle-class Americans buy homes will mean hundreds of thousands of Americans will pay more money every month and tens of thousands may not be able to buy homes at all. The price hike, however, is a helpful boost to anyone selling private mortgage insurance and investors in mortgage-backed securities.