While the legislation will now have to go before the Senate, according to the National Law Review, it is not expected to pass. For those of you who might not know what the Dodd-Frank Wall Street Reform and Consumer Protection Act, is, here’s a short explanation:
The Dodd-Frank Act was the single most important piece of legislation to come out of the 2010 banking crisis. The rule created stringent rules regarding the amount of money that banks must have on hand, as well as increasing compliance and reporting standards for banks. Stricter mortgage requirements were created, along with the Financial Stability Oversight Council (FSOC) and the Consumer Financial Protection Bureau (CFPB).
The rules were created to curb excessive risk-taking by financial institutions and avoid the existence of too-big-to-fail institutions on Wall Street, according to The Atlantic. The thing is, The memorandum signed by President Trump on February 3 to cut out a lot of what the Dodd-Frank Act contained, was actually a gift to his business friends.
As a matter of fact, the Atlantic quotes Trump as saying, “I have so many people, friends of mine, with nice businesses, they can’t borrow money, because the banks just won’t let them borrow because of the rules and regulations and Dodd-Frank.” He was also referring to his good friend, “Jamie,” J.P. Morgan’s CEO, Jamie Dimon, with whom he later met to discuss the regulations.
Conflict Minerals and why we have the rule
Let’s not digress, though. An important part of the Dodd-Frank repeal legislation also includes the section that requires U.S. companies to disclose whether any of the minerals used in their products come from the Democratic Republic of Congo (DRC). Conflict minerals include “blood diamonds,” and minerals used in everything from airplanes to computers and other electronic devices.
Trump’s signed order, or memorandum actually cited corporate profit and jobs as justification for lifting the due diligence requirement, according to Digital Journal’s Brett Wilkins. “In addition to lost livelihoods associated with the Conflict Minerals Rule, the SEC also estimated in 2014 that American companies would be forced to incur upfront compliance costs of $3 to $4 billion, with $200 million per year thereafter.”
The bottom line is simply this – Conflict minerals have fueled armed conflict in the DRC since WWII, with millions of people being killed, maimed or displaced in the worst violence seen in decades. Conflict minerals have paid for uprisings and other illegal practices in the region, including terrorism.
Two days ago, Democratic Senator Chris Coons, who recently signed a letter with five other senators asking the SEC to uphold the rule, told the Associated Press that the rule “played a critical role in reducing violence in mining areas” in Congo.
In an email to the AP, Leonard Birere, president of the Coalition of Anti-Slavery Civil Society Organizations in Goma, Congo wrote: “Dropping the conflict minerals rule implicitly supports conflict in the Great Lakes region. The activity of the armed groups in the mining sites had decreased substantially as well as their capacity for violence.”
