What You Ought to Know About the Dodd-Frank Act
You'd be excused for thinking that the Dodd-Frank Act of 2010 is old news. Yet, it's once again in focus, with the new presidential administration vowing to dismantle it in an effort to free up banks to lend more and thereby accelerate economic growth.
Listen in on this week's episode of Industry Focus: Financials , where The Motley Fool's Gaby Lapera and John Maxfield discuss the ins and outs of one of the most significant pieces of legislation passed in the past decade: why it was created, what it does, why so many people and politicians are less than pleased with its implementation, how likely it is to change under Trump's administration, and much more.
A full transcript follows the video.
10 stocks we like better than Bank of America
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Bank of America wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of February 6, 2017
This podcast was recorded on Feb. 13, 2017.
Gaby Lapera: Hello, everyone! Welcome to Industry Focus , the podcast that dives into a different sector of the stock market every day. You are listening to the Financials edition, taped today on Monday, February 13th, 2017. My name is Gaby Lapera, and joining me on Skype is John Maxfield, banking specialist. How's it going, John?
John Maxfield: It is going great, Gaby! Always happy to be with you.
Lapera: I am... "excited" is the wrong word for this show. We're going to talk a little bit about politics today, folks, and every time we talk about politics, I get heartburn. I am sitting here with a case of heartburn right now. It doesn't matter which side of the aisle we're talking about, politics makes my acid churn in my stomach. It's no good. [laughs]
So, today, we're going to talk about the Dodd-Frank Act. The full name, by the way, is the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. It's been in the news a lot lately because President Trump signed an executive order mandating that the Department of the Treasury produce a report on whether or not existing laws -- and when we say existing laws, what you should think here is Dodd-Frank -- are following the seven core principles that the Trump White House has laid out for regulating financial systems. There's a lot wrapped up in here. But I think we should start with a quick history of financial regulation, and where Dodd-Frank grew from. I'm going to pass it off to you, Maxfield, because I know you like history a lot, and I think you did a good job summarizing it earlier when we were talking about it.
Maxfield: I think, whenever you're talking about financial regulation, it's helpful to put it in perspective. So, here's how I think about it and how I would recommend our listeners think about it: After every major financial crisis, there's a piece of legislation that tries to attack the problem that caused that crisis. If you go back to, let's say, the Panic of 1907, out of that came the Federal Reserve Act, which established the Federal Reserve. Then, you had the Great Depression. Out of the Great Depression, you had the Glass-Steagall Act, which, among other things, separated investment banking operations and commercial banking operations, and it also established the FDIC, which provides deposit insurance.
Then, there were a series of banking crises that we've talked about in the past on the show, in the 1970s and 1980s, out of which a number of really significant pieces of legislation came in order to, again, attack the problems that people believed caused those crises. Then, in the financial crisis of 2008-09, it was Dodd-Frank that came out of that to attack the problems that many people believed caused that crisis.
Lapera: Exactly. So, there's a lot of regulation that looks backwards in a hope to regulate forwards in the future, which is where Dodd-Frank came from. So, we're going to talk a little bit about Dodd-Frank now, what it actually means, but something to keep in mind is that Dodd-Frank is a very weighty piece of legislation -- and I don't mean in terms of importance, although it is very important, or else we wouldn't be talking about it... although, I don't know, maybe you think we're just here to waste your time. In that case, don't listen to the podcast. [laughs]
But, no, this is actually a very long piece of legislation. What we're going to talk about now are the main points of Dodd-Frank -- so, the things that people think about when it comes to Dodd-Frank, the things that people are up in arms about when they're talking about this legislation, or the things that they're trying to protect. So, I think the first thing we should start with is capital requirements and increased liquidity, which kind of go hand-in-hand as something that banks have been complaining about pretty much nonstop since Dodd-Frank passed.
Maxfield: Right. If you go back to the financial crisis, the theory was that what caused it, or at least, what accelerated it, was that you had these things that were called "too big to fail banks." These were massive organizations -- Bank of America (NYSE: BAC) , Citigroup (NYSE: C) , Lehman Brothers, Bear Stearns, Goldman Sachs (NYSE: GS) . And these banks were operating with an enormous amount of leverage.
In Lehman Brothers' case, it was something like $30 worth of assets for every $1 worth of equity. What that means is that if those assets at a bank like that fell only 3%, basically all the capital of that bank would be wiped out, and it would be insolvent, and therefore it would have to go into bankruptcy. So, the thought process was that we need to increase how much capital banks hold, because if we increase how much capital banks hold, they'll be able to absorb those losses that happen when we go through these economic cycles. So, what they did with Dodd-Frank is they did a couple of things. First of all, the really big banks, they carved them out and applied heightened capital requirements to them, which means they have to operate with less leverage. They also instituted -- listeners have probably heard about these -- annual stress tests that tried to determine what would happen to these banks' capital on a yearly basis if the economy were to enter another financial crisis akin to the one in 2008. So, when they go through that crisis, they test what the losses would look like at these banks, and how that would impact their capital, and whether, through that crisis, they would still be able to meet these minimum capital requirements.
Then, on the liquidity side -- here's a really interesting point about the crisis that I think a lot of people miss: In some of these cases, it wasn't just an issue of capital, or it wasn't even an issue of capital, but it was more an issue of liquidity, because you had all of these bank runs on these banks, and while they had enough capital, the assets they held weren't liquid enough to turn into cash quickly enough to satisfy their depository run. So, what the regulators did was, on top of requiring banks to hold more capital, they're also requiring them to hold a larger percentage of their assets in highly liquid forms like government securities, as opposed to loans, which you can't turn into cash very quickly.
Lapera: And I'm going to interrupt you right here. The reason that banks are upset about this is that if they have larger capital requirements, meaning that they have to keep more cash in reserve, that means that they can't be using that money to make loans or do whatever it is they were going to do with it that would actually make them money. They just have to sit on it, which is upsetting to them, because before the financial crisis, there weren't really that many limits on their capital requirements, not like Dodd-Frank gave.
And on top of that, with the increased liquidity going hand-in-hand with the capital requirements, it means that they have to not only keep all this extra stuff around, all this extra money, but it has to be in a form that's easy for them to liquidate. So, it can't be in loans, because a loan is a promise to pay back money over time, so they can't call in the loans right away. It has to be in a form that is very easy to return to consumers.
Maxfield: That's a great point. When you think about what a bank earns on a loan, let's say it gets a 7% interest rate, or even a 5% on a loan, if you're keeping it in cash, you're not making any money. So, it really attacks the core profitability of banks.
Lapera: Absolutely. Then, on top of that, you have these stress tests that they have to do. I don't think anyone disagrees that you should run what-if scenarios, but the banks are saying that it's burdensome to them because it takes a lot of money to run these compliance tests. You have to pay a lot of people, and it takes a lot of time, and it's time and money that they could be spending making more money. So, they're upset that they are instead spending it to be in compliance with these federal regulations.
Maxfield: Yeah, that's right. And also, if you look at the scenarios that the Federal Reserve tests these banks against, they're almost like Great Depression-type scenarios. Now, that's a good thing, for banks to always be prepared for downturns. If you're a bank, you have to always be considering, and you always have to have in the back of your head that a downturn could be coming down the road. But just, the extreme-ness of these tests makes these banks hold so much more capital, which then, on top of that liquidity stuff, just really drives down their profitability.
Lapera: Right. And then, there's another prong to these stress tests and capital requirements, which are resolution plans, which is that the biggest banks have to tell the government regulators what they plan to do for the next year, like, who are they planning to hire? What's executive compensation like? Why are they planning on having a dividend? And the federal government can basically say yea or nay on a lot of these things.
Maxfield: I'm glad you brought that up. That's actually not the resolution plan, that's part of what's called CCAR, the Comprehensive Capital Analysis and Review process. I mean, there's all these things --
Lapera: No, you're totally right, I have my notes flipped. [laughs]
Maxfield: But I'm glad you brought that up, because I'd forgotten to mention that. One of the powers that banks lost as a result of Dodd-Frank was -- any other company, the board of directors can sit down and say, "We want to raise our dividend this year," or, "We want to buy back more stock this year than we bought back last year." Because of Dodd-Frank, and the stress tests in particular, banks do not have the sole discretion to do that. They actually have to get approval on an annual basis to increase their dividend or buy back more stocks. It's a really restrictive regulatory scenario for these banks.
Lapera: And obviously anyone is upset when they're told that this thing they used to be able to do, they can't do it anymore. It's the same reaction you see in humans across the board, whether it be a three-year-old who you catch finger painting on the wall, you're like, "Hey, that thing you were just doing, you can't do it anymore. I know you think it's pretty, but it's terrible." Or, you, when your doctor tells you, "Hey, I don't know if you noticed, but your cholesterol is really high, so no more cheeseburgers for you." The immediate reaction is, "Well, I don't like that!" whether or not it's good for you, or good for your walls, or good for your atherosclerosis. So, do you want to talk about resolution plans really quick?
Maxfield: Yes. Resolution plans. When Citigroup and Bank of America and Lehman Brothers and Bear Stearns ran into problems, because they're such big, complicated organizations, you can't just take them into bankruptcy like you would for, say, a convenience store down the street. So, what resolution plans are... these are plans that the banks have to give to the Federal Reserve every year that basically maps out how you would bring one of these organizations into bankruptcy, in the event that that was necessary. So, the thought process is, if the road map is there, it would be a lot easier to do if it was necessary.
Lapera: Absolutely. And since banks like Citibank or JPMorgan (NYSE: JPM) are very complicated organizations -- well, some of them are -- it means that this is, again, a lot of time and money being spent on compliance stuff that they don't feel like they should, because, I don't think most businesses plan on how they will fail. That's not something that most people spend resources on.
So, let's talk about something that people are very upset about: the Consumer Financial Protection Bureau, which was created with Dodd-Frank. The Consumer Protection Financial Bureau is something that's very new in America, at least in banking regulation, it's a regulator that has the consumer's best interests at heart, as opposed to regulators who are looking at banks and telling them, "We really want you to make sure you succeed, we don't want you to fail, here are the things we need you to do so you don't fail." This is another regulatory agency that's saying, "That's great and all, but you need to keep the consumer's best interests in mind as well."
Maxfield: And if you think about where it fits into the regulatory structure, you have the three Prudential Regulators. Those are the Federal Reserve, the FDIC, and the OCC, which is the Office of the Comptroller of the Currency. To your point, their primary duty is to oversee banks and make sure that the banking system is safe and sound. The CFPB is a totally different entity. It opened its doors and 2011, so it's been around for a little over five years. And as opposed to being motivated by the desire to make sure that the banking system, overall, is safe and sound, its primary focus is on consumers. This all goes back to the abuses that were uncovered in the mortgage industry in the lead-up to the financial crisis.
Lapera: Yes. And I just want to put something out there. You might be asking yourself right now: Why would anyone be upset about more consumer protections? And I don't think anyone is upset about more consumer protections, except banks. But the agency, the way the bureau is structured, it could be a little bit better, both for banks and for consumers, and for the government. Do you want to get into that, Maxfield? I know I cut you off, and I think you were about to get in there, but I wanted to preface that.
Maxfield: I'm really glad you prefaced that, because what I'm about to say is going to sound very critical of the CFPB, but I think the CFPB is a really important entity. Let me give you a tangible example of why. Before the financial crisis, before the CFPB came into place, the way that banks charged overdrafts on your checking account, here's what they would do: if you had a bunch of charges in a single day, let's say you had five charges for five cups of coffee at Starbucks, but then you had your mortgage payment that came out of that account, and let's say you bought those five cups of coffee and you had those five transactions earlier in the day, and then your mortgage payment was the last transaction that day, and let's say that mortgage payment kicked your account into overdraft territory -- so, you would have an overdraft fee on that transaction -- what the banks would do was, they would rearrange the order of those transactions, and they would put that mortgage transaction first. So, what happened there is that, as opposed to having one overdraft charge, you would have six overdraft charges. So, that is the type of thing that the CFPB was put into place to stop, because it's just egregiously taking advantage of consumers.
Lapera: Definitely. That's called debit re-sequencing, by the way, and I believe the CFPB has pursued a few cases, and there have been a few class action lawsuits about it, but it's technically still not illegal -- fun fact I learned the other day.
Maxfield: That's exactly right. It's not technically illegal. But the CFPB has gone after it, and banks have really backed off from it. But, to your point, the reason the CFPB is so controversial, there are two overarching reasons. The first is that, unlike the other Prudential Regulators who have to balance the impact of their policies on economic growth, the CFPB doesn't have to do that. We've talked about the role that banks play in the economy on this show many, many times. But banks provide fuel for economic growth. So, if you are cutting off the banks that fuel, you are going to impact economic growth. So, it's really important that these regulatory agencies are taking into consideration, in the CFPB's case, both protection for consumers, but also, you don't want to cut off your nose to spite your face by impacting the economic growth, because that will boost up unemployment, which will hurt those same consumers. You know what I mean?
Lapera: I think one of the things you're getting at here is that since the advent of the Consumer Financial Protection Bureau, banks have done stuff like been much more conservative about who they lend money to. And on the surface of this, you may think "Great, that's what they should be doing. They should be conservative lenders." But, on the flip side of that, you have this population of people who are already underserved by banks, who maybe don't have the best credit, but if banks were willing to work with them, maybe they would be able to get a loan and pull themselves out of poverty, whatever it is -- but banks don't want to lend to them anymore, because they know someone will come after them and say, "Look at all this untrustworthy lending you've been doing." And that pushes those people to the margins of the banking and financial structure, so they end up going to places like check cashers or payday loan places, places that potentially don't have as much interest in keeping the consumers above board.
Maxfield: Or, any interest in keeping them above board. [laughs]
Lapera: Yeah, or keeping them afloat in terms of financial things. Check cashers charge their fees up front, so if you fail, they don't really care, because they already have their money. But banks have an interest, in theory, in keeping you as a customer for a long time. In theory.
Maxfield: That's right, in theory. [laughs] And there's a lot of truth to that, but there are certainly exceptions on the margin. Let me get to that second reason that the CFPB is so controversial. Unlike the other regulatory agencies -- at the FDIC, there's a board of governors, there are five governors that weigh in on the policies, and the same thing is true at the Federal Reserve, which has the Board of Governors, and at the OCC, the head of the OCC, he reports directly to the President. So, there is either a dispersion of authority at these organizations, or there's accountability directly to the political branch. The problem that the CFPB has is that it's a part of the Federal Reserve, which is an independent entity within the executive branch for monetary policy reasons. That provides one layer of insulation between the CFPB and the political branch.
But there's an additional problem -- the CFPB is run by one person, not by a board. I don't want to overstate the case, but it's more like a dictatorship as opposed to a parliamentary democracy. You know what I mean? So, that has people concerned. And then on top of that, because the CFPB can go out and find these banks a ton of money -- in the five-plus years it's been around, it's collected something like $12 billion worth of fines, which means that it doesn't have to be accountable even to the Federal Reserve for financing or to Congress for financing. It can produce its own revenue. So, there's this concern that, they don't balance economic growth, they're non-accountable, they can basically do whatever they want. And, in fact, a court has, just last year, held that the governance structure is unconstitutional, and that will probably make its way up the chain of appeals courts. But, it really is a legitimate concern, how this thing is structured.
Lapera: Right. Like all political things, there are shades of grey here. No one's saying -- well, some people are saying, but most people aren't saying "Get rid of all consumer protection." But, some people are saying, "Maybe the way that the CFPB is structured right now is not in the best interest of the nation." I want to move on to the next thing, which is the Volcker Rule, which I think a lot of people have heard about, but maybe don't understand. The Volcker Rule prohibits proprietary trading, limits the relationship between banks and hedge funds, and I believe it also prevents banks from trading certain types of assets. This proprietary trading is something that sounds like a buzzword, but it means something very specific, which is when the bank uses the bank's money to invest, instead of just facilitating investing for their clients.
Maxfield: That's right. Banks can't go out and act like a hedge fund anymore, where you're going out and buying super risky assets. What they can do now is serve as market makers, which means you're just facilitating. So, let's say you're a Bank of America, for example, and you have these institutional investor clients like an insurance company that wants to sell a whole bunch of government bonds that it owns. You can't just sell $100 million worth of government bonds, it's not like buying and selling a stock. You have to have somebody who'll actually facilitate that transaction. So, it will sell those bonds to Bank of America, and then Bank of America will find a buyer for those bonds, so, it just facilitates that transaction. That's what market making is, and that's what the Volcker Rule limits bank's' role in the capital markets to.
Lapera: Right. And banks make their money from fees generated from that, and maybe a commission or something. But before, with proprietary trading, they were actually taking consumers' money, like deposits or whatever, and then investing in the stock market and saying, "Look how much money we made with your money!" And that leads to some very risky practices, like you saw before the recession, that ran his headlong into a concrete wall. Volcker Rule is really interesting because a lot of people think we should just get rid of Dodd-Frank and go back to Glass-Steagall. Glass-Steagall was an act that you talked about earlier which established the FDIC in the 1930s. The Glass-Steagall Act, one of the most important components of it was that it prohibited banks from doing commercial/retail businesses, so, like, taking deposits and making loans, and having an investment house in it. So, it would have prohibited the existence of banks, the way that they exist in their current form, like JPMorgan, which is a universal bank. It said that those two things had to be completely separate, you couldn't have it under one house. Which is, I think, why some people want to go back to that. Maxfield, do you have some insight onto why?
Maxfield: Just, the thought process is, it's too risky to have these trading operations, these investment banking operations, on top of federally insured deposits. It just seems like the taxpayer shouldn't be financing these risky investments. It makes sense, in theory, why you would want to stop that. But here's what you would hear from bankers if you talked to them, particularly the bankers at Bank of America and JPMorgan Chase and Citigroup. They say, "We have these large corporate customers who needed a buffet of financial options. One of those financial options is being able to access the capital markets. If we don't provide that service within the strict regulatory confines of the banking industry, somebody else will provide those. And that somebody else will be outside of the strict regulatory confines of the banking industry. So, let's keep it in, let's keep it safe, let's allow banks to provide the whole buffet of options to these large corporate customers."
Lapera: Which is why the Volcker Rule is sometimes called Glass-Steagall Lite. That's one of the things that they call it, because it's basically what it does. It says, "You can't do any of this proprietary trading, but market making is OK, because we do understand that you have to be able to do that." So then, the Durbin Amendment got kind of tacked on to Dodd-Frank, which is why it's called the Durbin Amendment. The Durbin Amendment limited the amount that debit card processors could charge merchants in fees. In theory, it was supposed to save consumers money, but it hasn't really worked out that way so great.
Maxfield: Yeah, basically, to put it into formal language, every time that you run your debit card, the bank or the processor gets a little slice of that transaction in order to facilitate that transaction, and that slice is called the interchange fee. And the Durbin Amendment just put a cap on interchange fees.
Lapera: And a lot of people are arguing that that's actually being passed on to consumers. We'll see what happens to the Durbin Amendment. People aren't as upset about this one, mostly because, I think, a lot of people don't know about it or understand it. So, that goes through the big bits of Dodd-Frank. We talked about why banks are upset, so let's talk about why regulators and legislators and the average citizen is upset. One of the charges that has been laid against Dodd-Frank's feet is that the federal government now has an inability to intervene, should there be another financial crisis.
Maxfield: This goes back to the whole point of Dodd-Frank. It's not so much that they have the inability to intervene, but it narrows their options and their powers in the event that they do have to intervene. Again, this all goes back to the original purpose of Dodd-Frank, which was not only to prevent another financial crisis like the one in 2008, but to solve the "too big to fail bank" problem. The thought process was, if you tell the regulators that they can't rescue too big to fail banks, then the banks will do everything in their power to make sure that they don't fail. It's attacking the moral hazard problem, and it makes sense in theory, but like anything, the devil is in the details.
Lapera: Absolutely. The other thing that you mentioned, that I have heard multiple times, is that if the banks are too big to fail, that doesn't even make sense, if banks are not doing the right thing, we should just let capitalism do what capitalism does, and we should just let the banks fail, and we'll see what happens when the dust settles. It's not a great idea, in general. I know that there are some people here who really hate central banking who listen to this show. I've had emails from them. But, in general, not a really great idea to let your entire economic system collapse. The problem with when these too big to fail banks collapse is in the name -- they're too big to fail because, when people make a run on them, when they collapse, there's no banking infrastructure left.
Maxfield: Here's what I would recommend to any listener who's thinking about this and who is opposed to this idea of bailing out big banks -- I agree, Gaby agrees, everybody agrees that bailing out these bankers when they get into trouble is a very unpalatable course of action today. These guys make a ton of money.
Lapera: It's not ideal, no. [laughs] But the other option...
Maxfield: Right. If you look back in history, the thing that we know, and this is what Milton Friedman became famous for, was that when there is a contraction in the money supply, that is the thing that kicks you into a recession. And if there is a big contraction in the money supply, that is what kicks you into a depression. Banks are not ordinary companies. This is not like Best Buy or Wal-Mart . Banks play a critical role in the money supply, because they both hold deposits and make loans, which creates money. So, if you allow one of these really big banks to fail -- and the four big banks have an enormous amount of market share in the banking and deposit industry in the United States -- if you allow one of them to fail, the contraction in the money supply would be so steep that it would almost certainly -- and I am choosing that adjective purposely -- it would almost certainly cause a depression. Not a recession, but a depression. So you have to ask yourself, do you swallow the unpalatable option of bailing out these dozens of bankers when they make these mistakes in order to prevent a Great Depression? Or, do you punish those dozens of bankers and then punish the rest of the entire country, and -- because of the way the global economy is connected, the rest of the entire world -- because of the mistakes that these guys have made? I personally don't think that you should do the latter. I think, you should punish those bankers to the extent that you can, swallow that unpalatable option, but save the economy from falling into a depression.
Lapera: Yeah. Exactly what you said. And it's hard, because it's not what you want. You want there to be a consequence for bad actions. But the problem is, like you said earlier, if a Wal-Mart fails, it's just Wal-Mart. If Wal-Mart fails, the market corrects. When banks fail, the market doesn't correct fast enough. There's no correction if the market is gone, which is, I think, something that people miss when they're like, "Ah, just let them fail." I mean, we do have those resolution plans, but that's if there's enough law and order to make sure that the banks get broken up properly. This is a whole nother topic of conversation.
So, let's talk a little bit about this: Dodd-Frank was made by people. There's room for improvement. People make mistakes. The question is, what are we going to end up with, with the Trump administration? The Trump administration laid out these seven principles that they want all financial regulation to follow. Most of them, on the surface, seem totally fine. We don't really know what's going to happen. Obviously, John and I are not fortune tellers. We don't know what's going to happen in terms of future regulation. We don't know if Dodd-Frank is going to be completely repealed and they're going to pass new legislation. But, both John and I are betting that, probably not. Dodd-Frank is probably not going to be repealed in its entirety. Maybe parts of it, but not all of it, in all likelihood. And I know that you have a theory about how they're going to push through change, John.
Maxfield: The rhetoric on the campaign trail was they're going to "dismantle" Dodd-Frank, or do a big number to it, or reduce regulations by 75% in the financial industry. And that all makes good sound bites, but unfortunately, those sound bites, at a certain point, run up against reality. The reality is, to get any type of huge overhaul of Dodd-Frank through Congress, it's going to have to go through the Senate, and in order for it to go through the Senate it's going to need to garner 60 votes, and the way the Senate is right now, it's just not going to get the 60 votes. So, there's just not going to be a dramatic legislative overhaul to Dodd-Frank, at least, that doesn't look like it's going to be the case right now with the way the Senate is. So, what they're going to do, if you listen to Gary Cohn, who was the former No. 2 at Goldman Sachs who is now Trump's top economic advisor, he's saying they're going to affect regulation through changing personnel at the regulatory agencies, which will be an effective way to do it. But it's just not going to be as visible to the average citizen. It will be more visible to those inside the banking industry.
Lapera: And listeners, if you follow this space closely, you might be saying, "What about Hensarling's Financial Choice Act?" That might go through. The Choice Act, for listeners who are not as well versed in this space, is basically the new answer to Dodd-Frank. They would take the Dodd-Frank framework and repeal what they want and put in new things, some of which are good and some of which are bad depending on who you ask. And that's the legislation we're talking about that probably won't get through the Senate, but who knows, it might.
Maxfield: Let me make one really fast point on the Hensarling Financial Choice Act. Ironically, the Financial Choice Act would even further raise capital requirements on banks. It would decrease some of those peripheral requirements, regulations on them. But it would make things even worse for the banks, in terms of the core banking function. There's a lot of moving pieces here.
Lapera: Definitely. Honestly, the Financial Choice Act could be an entire nother show on its own. So, we're going to leave it at that for now. If you guys have any questions, definitely contact us at email@example.com or by tweeting us @MFIndustryFocus. Basically, the way that I would like to wrap up the show is saying overall the executive order doesn't actually do much besides requiring that report from the Department of Treasury. It might possibly trigger the repeal of Dodd-Frank in favor of other regulation down the line, but we don't know yet. I know that you guys probably get sick of me and John saying that over and over on this show, but we just don't know. If we did know, we would probably have different jobs. [laughs] Because then we could see the future. We'd be like Biff in Back to the Future . [laughs]
Maxfield: [laughs] Did he have a job?
Lapera: No, he was just a crazy mogul from winning all his bets. It's a great trilogy, in case you haven't seen it. Austin, have you seen Back to the Future ?
Austin Morgan: Yes, I have.
Lapera: Which one is your favorite?
Morgan: It's tough to say.
Lapera: Really? I'd say No. 3, for sure, for me.
Morgan: I enjoyed all of them.
Lapera: I just really like the Old West thing that was going on in No. 3.
Maxfield: It's so hard to choose between masterpieces.
Lapera: That's true. [laughs] I will say that I also liked the least favorite Indiana Jones movie, the Temple of Doom , the one with the heart being ripped out of the guy's chest, still beating. I was a very morbid child, apparently, but it's still one of my favorites. Anyway, [laughs] now that you guys know a little bit too much about me, let me read some disclosures here.
As usual, people on the program may have interests in the stocks that they talk about, and The Motley Fool may have recommendations for or against, so don't buy or sell stocks based solely on what you hear. Thank you guys very much for joining us. I hope everyone has a great week. Please don't send me mean emails about this show.
Maxfield: No, do. Do send her mean emails, please.
Lapera: No! I mean, even if you sent me an email saying, "What are your political opinions?" I'm not going to answer it. I'm going to say, "I'm sorry, I can't say anything, because The Motley Fool does not hold political stances," which is true. We can talk about what is going on in politics, but I'm not going to tell you what I personally think. All right, well, that wraps it up for us. Thanks for joining us, John. Thank you, Austin. And everyone have a great week!
Gaby Lapera has no position in any stocks mentioned. John Maxfield owns shares of Bank of America and Goldman Sachs. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.