Should Washington bank on Dodd-Frank?
The sweeping financial reform package, signed into law by President Obama four years ago on Monday, has come under renewed attack as congressional Republicans try to pull funding for enforcement and regulators struggle to implement it.
The regulatory framework affects nearly every financial institution and market, and targets proprietary trading and other practices officials blamed for the global financial meltdown in 2008.
While many of its most pressing provisions have been enacted, the Republican-led House of Representatives last week tried to pull back funding for some of the agencies responsible for enforcing Dodd-Frank.
“I see this as a huge political battle,” John Alan James, chairman emeritus at the Center for Global Governance, Reporting and Regulation at Pace University, told The Post.
Although the bill is likely to stall in the Democratic-controlled Senate, if Republicans win enough votes this November to gain control of the chamber, they could revive efforts to de-fang Dodd-Frank, according to James.
Meanwhile, Mary Jo White, head of the Securities and Exchange Commission, acknowledged last week that about half of Dodd- Frank’s mandates for the SEC still haven’t been finalized, although she promised that they would be “shortly.”
“Progress will ultimately be measured based on whether we have implemented rules that create a strong and effective regulatory framework and stand the test of time under intense scrutiny in rapidly changing financial markets,” White said in a statement.
Some of those unfinished provisions, for instance, relate to credit ratings agencies such as S&P and Moody’s, which were faulted for rubber-stamping toxic mortgage bonds rated as triple-A.