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In a page posted to Donald Trump's transition website Thursday, the president-elect promised to "dismantle" the Dodd–Frank Wall Street Reform and Consumer Protection Act, a 2,300-page law passed in 2010 as a response to the financial industry excesses its supporters believed led to the 2008 financial crisis. The post promised to replace the law "with new policies to encourage economic growth and job creation."

The law, which the post derided as "bureaucratic red tape and Washington mandates," has been unpopular with Republicans since its inception. It passed the House in December 2009 without a single Republican vote and the Senate six months later with only three. 

Among the law's key provisions is what is colloquially known as "too big to fail," a designation that puts extra regulatory burdens on institutions that have the potential to spark financial contagion if they became insolvent. In the language of the law, such a bank or other financial entity is labeled a systemically important financial institution (SIFI) and required to hold larger capital buffers, produce resolution plans or "living wills," and undergo stress tests. 

One non-bank SIFI, MetLife Inc. (MET), has successfully challenged its designation in court, winning reprieve from the extra requirements in March. The Justice Department has appealed the decision. 

The post on Trump's transition site notes that the purpose of such requirements was to eliminate the problem of banks that were "too big to fail," yet "taxpayers remain on the hook." Government bailouts were necessary to stem the financial fallout from the bankruptcy of Lehman Brothers in 2008; the potential for another crisis, followed by another bailout, creates moral hazard by apparently guaranteeing that failing banks will be rescued. (See also, Falling Giant: A Case Study of AIG.)

Trump's site also argues that "the American people remain stuck in the slowest, weakest, most tepid recovery since the Great Depression." It links slow growth, stagnant wages, "depleted" savings and low labor force participation to Dodd-Frank's failures.

Another aspect of the law that is unpopular with Republicans is the "Volcker Rule," which separates banks' trading operations from their consumer deposits business. 

The market appears to believe that lifting these restrictions could boost banks' earnings. The Vanguard Financials ETF (VFH) shot up 7.8% between Tuesday's close, when votes had not begun to be counted, and Thursday's, when initial fears of a Trump-induced market crash had dissipated.

Trump's plan could generate a backlash in at least one way. Dodd-Frank created the Consumer Financial Protection Bureau, which was involved in uncovering and punishing the years-long fraud at Wells Fargo, in which the bank opened as many as two million fake accounts without customers' knowledge. During ex-Wells Fargo & Co. (WFC) CEO John Stumpf's testimony before the House in September, a number of Republican representatives laid into regulators' incompetence for not uncovering the fraud more quickly – and without help from the L.A. Times. The risk, however, is that consumers perceive a lack of oversight as allowing similar frauds to go unpunished. 

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