President-elect Donald Trump recognizes that full repeal of the Dodd-Frank Act is unlikely, though he supports a House effort to make significant changes, according to a former banker who was on the shortlist to be Treasury secretary.
John Allison, who recently met with Trump and several advisers while being vetted for the Treasury post, said the incoming administration is inclined to back the proposed Choice Act even though they would like to go further in altering Dodd-Frank.
Allison also had a generally positive view of Steven Mnuchin, who was officially tapped Wednesday to become the next Treasury secretary, noting that the former banker has a grasp on how restrictive regulation has been for the financial services sector due to his experience in resurrecting the failed IndyMac Bank. Allison also met with Mnuchin as part of the interview process.
While Allison, a libertarian and adherent to Ayn Rand's objectivism, acknowledged that he didn't see eye to eye with Trump on several issues outside of banking, he does appreciate how the president-elect is approaching the formation of his new administration.
Trump "is really committed to getting competent people from outside the D.C. circles," Allison said. "He also understands that the working class elected him, so he wants to make things better there…And even if you disagree with their philosophies, he is surrounding himself with smart people."
Trump also believes the U.S. economy can grow at a 4%-5% rate over the next four to five years before settling into a 3% growth rate, Allison said, if the president-elect can implement tax reform and ease regulation.
Allison shed more light on how his name surfaced in the Treasury search. He was contacted by Vice President-elect Mike Pence, whom he already knew. Allison spent a total of 1.5 hours meeting Trump, Pence, Mnuchin and others. The incoming administration had also researched Allison extensively.
"They did their homework," he said. "The process ran pretty much like a corporate job interview."
As for how Trump will work with Mnuchin and other appointees, Allison surmised that the president-elect will be involved with the big decisions but "doesn't show an inclination to micromanage."
Finally, Allison said he discussed other positions with Trump and his advisers but received no offers. The former BB&T chief executive, who once expressed an interest joining the Federal Reserve's Board of Governors despite being a staunch opponent of the central bank, said he’d still find that post intriguing.
"I would certainly be a contrarian," Allison said, adding that he'd make himself available if Trump wanted more advice on the banking sector. "Then again, I'm also happy to stay out of Washington after spending several years there" while running the Cato Institute.