Happy Birthday Dodd-Frank, Part III
It’s been called the birthday; the anniversary; the implementation deadline; the day the doors open; the transfer date; the rulemaking deadline; and more. By whatever terminology, July 21, 2011, Dodd-Frank’s first birthday, should have been a big day. When the countdown ended, however, and Thursday finally rolled around, it all began to feel a bit anti-climactic.
The Rulemakings: Of the 163 required rulemakings that had to be finalized by July 21, only 33, a mere 20 percent have been completed. Overall, only 51, or 13 percent of the total rulemakings required by Dodd-Frank have been finalized. Between the two key deadlines – July 16 (360 days after passage) and July 21 (one year after passage) – there were 117 rulemaking requirements, only 13 of which were actually met. There remain 104 requirements, or 88 percent, that have yet to be fulfilled.
The Studies: Dodd-Frank also requires a multitude of studies, and on the whole, agencies have been more successful in completing those on time. Regulators only failed to complete 3 of the 17 studies required this quarter.
The Agencies: The CFPB, the most anticipated of the new agencies, officially opened on Thursday, but has limited authority until it has a confirmed director. The SEC has missed the most deadlines, at 54, followed closely by the CFTC, which has missed 39. Both SEC Chairman Mary Shapiro and CFTC Chairman Gary Gensler have blamed the delays on limited resources, saying that unless they receive considerable funding increases, the delays will only continue. Regulators will spend $400 million implementing Dodd-Frank in 2011. That number is expected to triple to $1.2 billion in 2012, as regulatory agencies continue to add staff and increase oversight efforts. The House Appropriations Committee passed bills imposing deep cuts in the regulators’ budgets. Those bills have yet to come to a vote before the full House and are unlikely to pass the Senate. Under statute, regulators are also empowered to assess fees to the firms they regulate to bring in additional revenue.
The Leadership: Four regulatory agencies lack key leadership personnel, and all have significant staffing left to do. The president’s nominees for chairman of the FDIC, Comptroller of the Currency and a Member of the Financial Stability Oversight Council are set to appear before the Senate Banking Committee tomorrow. A hearing date has yet to be set for the president’s most controversial nomination, that of director of the Consumer Financial Protection Bureau. Senate Republicans have vowed to block any nominee for CFPB director, but have not vocally opposed the other nominations.
By all accounts, the first year of Dodd-Frank was just the beginning, but as Republicans in Congress continue their efforts to chip away at financial reform, it remains to be seen how many anniversaries it will take for Dodd-Frank to become a reality.
