Core Principles for Regulating the United States Financial System
Signed: February 3, 2017
Published: February 8, 2017
Document Number: 2017-02762
đSummary
This executive order sets out âCore Principlesâ for how the federal government should regulate the U.S. financial system, emphasizing consumer choice, avoiding taxpayer-funded bailouts, supporting economic growth, and making rules more efficient and accountable. It primarily affects federal financial regulators and the Treasury Department, and indirectly affects banks, financial firms, and consumers through potential changes to regulation. It directs the Secretary of the Treasury to consult with the Financial Stability Oversight Councilâs member agencies and deliver a report to the President within 120 days (and later updates) assessing whether current laws and regulations align with these principles. The report must also identify specific laws, rules, guidance, and reporting requirements that get in the way of regulating consistent with the Core Principles, without changing any agencyâs legal authority on its own.
đźBusiness Impact
This order most affects banks, credit unions, broker-dealers, asset managers, fintech/payment firms, mortgage/consumer lenders, and any nonbank financial company that could face heightened oversight (e.g., insurers or large specialty finance) because it signals a push to âtailorâ and potentially roll back or revise postâcrisis rules and reporting. In the near term, it doesnât impose new compliance duties, but it creates an opportunity to influence upcoming Treasury/FSOC reviewsâexpect potential changes to stress testing, capital/liquidity expectations, consumer finance rules, and recordkeeping/reporting burdens, which could lower costs for some firms while increasing scrutiny on âsystemic riskâ justifications. Businesses should (1) inventory the regulations and reporting requirements that most constrain growth and document cost/benefit impacts, (2) engage counsel and trade associations to submit comments/brief Treasury and regulators as reviews open, and (3) avoid de-scoping compliance prematurelyâmaintain current controls while building scenarios for both deregulation (product expansion, pricing) and renewed enforcement in areas tied to consumer choice and bailout prevention.
Full Text
Executive Order 13772 of February 3, 2017
Core Principles for Regulating the United States Financial System
By the power vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
Section 1 . Policy. It shall be the policy of my Administration to regulate the United States financial system in a manner consistent with the following principles of regulation, which shall be known as the Core Principles:
(a) empower Americans to make independent financial decisions and informed choices in the marketplace, save for retirement, and build individual wealth;
(b) prevent taxpayer-funded bailouts;
(c) foster economic growth and vibrant financial markets through more rigorous regulatory impact analysis that addresses systemic risk and market failures, such as moral hazard and information asymmetry;
(d) enable American companies to be competitive with foreign firms in domestic and foreign markets;
(e) advance American interests in international financial regulatory negotiations and meetings;
(f) make regulation efficient, effective, and appropriately tailored; and
(g) restore public accountability within Federal financial regulatory agencies and rationalize the Federal financial regulatory framework.
Sec. 2 . Directive to the Secretary of the Treasury. The Secretary of the Treasury shall consult with the heads of the member agencies of the Financial Stability Oversight Council and shall report to the President within 120 days of the date of this order (and periodically thereafter) on the extent to which existing laws, treaties, regulations, guidance, reporting and recordkeeping requirements, and other Government policies promote the Core Principles and what actions have been taken, and are currently being taken, to promote and support the Core Principles. That report, and all subsequent reports, shall identify any laws, treaties, regulations, guidance, reporting and recordkeeping requirements, and other Government policies that inhibit Federal regulation of the United States financial system in a manner consistent with the Core Principles.
Sec. 3 . General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations. ( printed page 9966)
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
THE WHITE HOUSE,
February 3, 2017.