It’s been four years since the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law. President Obama sat down on July 21, 2010 to sign the behemoth of a bill that was the most dramatic change to financial industry in years. Besides the hundreds of pages of text in the law itself, the law also mandated almost 400 regulatory rulemakings. All of this has made compliance professionals in the financial industry very busy.
Of the 398 rulemaking requirements in the law, 280 had specific deadlines. Of those, 127 have missed their deadlines. Of those 127, regulators have not even released proposals for 42 of the missed deadlines. There are another 54 rulemakings without deadlines that have not been proposed. Dodd-Frank is far from being implemented.
The Securities and Exchange Commission had the biggest burden placed in it. Daniel Gallagher, a Republican member of the SEC, said the commission can’t spend all of its time writing Dodd-Frank rules. “To pretend we can process the rules in a thoughtful way, in a period of a year or two, or even five or 10, I think is crazy.”
For a great book on creation of the law, try reading Robert Kaiser’s Act of Congress.
“Of the 535 members of the House and Senate, those who have a sophisticated understanding of the financial markets and their regulation could probably fit on the twenty-five man roster of a Major League Baseball team.”
The financial crisis of 2008 was catastrophic, so of course Congress had to pass a law. That allowed all kinds of other stuff to be piled into the law even if it had nothing to do with the financial crisis. (How did conflict minerals affect the financial markets?)
There is a strong push to enact some changes to Dodd-Frank, but that will likely hinge largely on the results of the upcoming election and whether the Republicans are able to gain control of the Senate. That will just mean changes to the changes.
Compliance professionals are going to be busy implementing Dodd-Frank for the foreseeable future.
Sources:
- Dodd-Frank Progress Report from Davis Polk
- Dodd-Frank Law Still Far From Finished by Andrew Ackerman and Alan Zibel in the Wall Street Journal
- Four Years of Dodd-Frank Damage in the Wall Street Journal editorial page
- Action in Congress