Trump Administration Position on Dodd-Frank: Potential Impact on CRE Lending
One of the top priorities for the Trump administration has been to significantly revise (if not completely eliminate) the Dodd-Frank Act, which was designed to limit the amount of risk financial institutions can legally adopt. Dodd-Frank was created in the wake of the 2008 financial crisis, in which widespread loan defaults created a cascade of counter-party effects that threatened to take down the entire US financial industry.
Trump has been critical of the Dodd-Frank rule, saying that these regulations have limited investors’ access to lending, particularly in the real estate market. The president’s stated goal of loosening Dodd-Frank’s restrictions on mortgage underwriting is meant to increase the amount of financing options available to real estate investors.
Since Dodd-Frank was enacted in 2010, certain parts of the real estate sector have seen reduced loan activity relative to the heady days before the stock market crash.