Republican promises to dismantle the 2010 Dodd-Frank financial overhaul may prove good news for many financial firms. The bad news for Wall Street: A top target is a provision big banks would rather retain, according to a Wall Street Journal commentary today. “Orderly liquidation authority” (OLA) was an answer to the 2008 bailouts of Wall Street firms during the financial crisis. It empowers the federal government to take over and wind down a failing financial firm. Conservatives have sought for years to repeal OLA. Now Trump administration officials are talking about doing so, providing new momentum. OLA is a particularly ripe target with partisan tensions boiling on Capitol Hill, according to the commentary. That is the result of quirks in congressional budget rules, which say that because OLA repeal has an impact on the federal budget, it could be passed with a simple majority vote and clear the Senate with only GOP votes. In contrast, other Republican-favored changes to Dodd-Frank, such as stripping the government of powers to extend more stringent oversight to big nonbank firms, would require some Democratic support to clear a higher vote hurdle. “We are going to probably at some point talk about whether OLA works and whether OLA should ever be triggered, because no one thinks that we really solved ‘too big to fail,’” commented White House National Economic Council Director Gary Cohn. He said that the administration was contemplating an unspecified executive action related to the policy.
