(Bloomberg) — President Donald Trump stepped up his criticism of financial regulations, pledging to go after the 2010 Dodd-Frank banking overhaul because he said the law has made it difficult for businesses to get loans.
“We’re going to be doing a big number on Dodd-Frank,” Trump said Monday at an event with small business leaders at the White House. He called the legislation “a disaster” and said, “it’s almost impossible now to start a small business and it’s virtually impossible to expand your existing business.”
Trump didn’t provide data regarding Dodd-Frank, and the law’s impact on business lending isn’t clear cut. Commercial and industrial lending is up significantly since the law was approved, though the amount of money lent to small businesses was little changed, according to government data.
Trump’s remarks are his most pointed on financial rules since he took office Jan. 20. His advisers vowed to dismantle Dodd-Frank during the transition period, but have provided scant details on how they plan to go about it. Trump didn’t say whether he planned to attack the law through executive action or by working with Congress on legislation.
Banks and investors have been trying to decipher how the billionaire will balance his populist message to the middle class with his Wall Street ties, which include a cadre of former Goldman Sachs Group Inc. bankers he’s tapped for key roles in his administration.
The president’s comments came as he signed an executive order requiring that government agencies revoke two existing regulations for each new one they issue, fulfilling a campaign promise. Trump campaigned on cutting a federal bureaucracy that he blames for making it harder for businesses to grow and get funding.
Key lending portfolios have been on the rise since former President Barack Obama signed Dodd-Frank into law in July 2010. At the time, commercial and industrial lending was at $1.2 trillion, according to data from the Federal Reserve. Almost seven years later, that measure of credit from U.S. banks to the business sector is up almost 70 percent to $2.1 trillion.
There were $310 billion in loans outstanding to small business before the law was passed, according to Federal Deposit Insurance Corp. As of the end of September, those loans totaled $328 billion. While there was a dollar value increase, those loans grew at a far slower pace than larger business loans and nominal gross domestic product. The FDIC defines small business loans as those totaling $1 million or less.