President Obama met with the nation’s top financial regulators last week, to urge for rulings associated with the Dodd-Frank Wall Street Reform law passed more than three years ago. It was the first time the president convened a sit down with each regulator since 2011.
According to a White House statement, Obama “stressed the need to expeditiously finish implementing the critical remaining portions of Wall Street Reform to ensure we are able to prevent the type of financial harm that lead to the Great Recession from ever happening again.”
Regulatory agencies have been slow to adopt final rulings since financial reform was passed in 2010. Just 38.9% of regulations, required by Dodd-Frank, have been finalized and 60% of deadlines missed, according to a report compiled by law firm Davis Polk & Wardwell, LLP.
Among the unfinished tasks are big-ticket items like the so-called Volcker Rule, named after former Federal Reserve Chair Paul A. Volcker, intended to prohibit banks from making risky bets with their own money.
“I join the President in urging the expeditious implementation of the Dodd-Frank law,” House Financial Services Ranking Member Maxine Waters (D-CA) said in a statement to MSNBC. “We must finalize these critical regulations with the utmost urgency,” she added.
Other elected officials point to the slow rule-making progress as a reason to demand more legislative action. Senators Sherrod Brown (D-OH) and David Vitter (R-LA) introduced a bill this year, ending so-called ‘Too Big to Fail’ practices by requiring banks to backstop their lending with increased capital.
Brown, through a statement given to MSNBC, said, “It’s encouraging that regulators are moving toward the standards in Brown-Vitter…we must do more and prevent regulations from being weakened by Wall Street lobbying.”
Wallace Turbeville, a senior fellow at the Washington, D.C. think tank DEMOS and adjunct professor of law at University of Maryland, echoed Brown’s critique of Wall Street lobbying. “The finance industry employs more lobbyists than any other interest group and they have used this influence to delay implementation of financial reform.”
In addition to the 8% across the board spending cuts triggered by sequestration this year, financial watchdogs have seen a drop in their operational budgets’ since 2010, the year Dodd-Frank was passed.
Turbeville pointed to a lack of urgency on the administration’s part and a concerted effort by critics on Capitol Hill to stall Dodd-Frank implementation by passing proposals to scale back the law and de-fund financial agencies. “Regulators have been starved of resources through budget restrictions at the very time their responsibilities have been multiplied and made far more complex” he said.
After applauding the Obama administration’s new push to complete financial reform, Turbeville cited public perception as the key motivating factor behind last week’s meeting, “It is embarrassing for the administration to face the five year anniversary of the financial collapse next month with financial reform, one its few claimed big successes, far from finished. Even if the big push doesn’t work, it will be better to claim that action is being taken to get the job done.”