Posted by: Ben Cole
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With Chris Dodd already in Hollywood, Sen. Barney Frank’s retirement announcement last month led some to speculate the push for Dodd-Frank Act regulations would retire with him. The controversial financial regulation act has faced criticism and pushes for its repeal since it was proposed. With Frank’s retirement, its backers are losing their most outspoken supporter.
A Politico headline stated that Dodd-Frank (officially called the Dodd-Frank Wall Street Reform and Consumer Protection Act) now has “a murky future” due to Frank’s announcement. The article went on to say that despite Frank’s retirement having little impact on the act in the short term, “Republicans are salivating” at the chance to repeal it.
Two Senate Banking Committee hearings showed pushing through Dodd-Frank Act regulations is still a goal in some circles. On Dec. 6, the committee held an oversight hearing on the implementation of Dodd-Frank, with representatives from the Treasury, Federal Reserve and the SEC testifying. The hearing was designed to examine progress in implementing the act, and to explore how it could ultimately improve the stability of the U.S. financial system.
Senate Banking Committee Chairman Tim Johnson noted that some of the most complex Dodd-Frank Act regulations remain under consideration, and that he would like a timely resolution of these rules.
“I recognize that these rulemakings are difficult, but this is the time when tough decisions have to be made by our regulators,” Johnson said during opening statements at Tuesday’s hearing. “While our economy is starting to show signs of recovery from the financial crisis, the ongoing turmoil in Europe is a stark reminder that we must continue to monitor threats to financial stability.”
The financial regulation theme continued the following day, when the committee hosted another hearing titled “Enhanced Supervision: A New Regime for Regulating Large, Complex Financial Institutions.” Just the sound of it invoked thoughts of the overarching goals established by Dodd-Frank Act regulations. Also this week, Johnson released a scathing statement lambasting Senate Republicans after they voted to block Richard Cordray’s nomination to be the first director of the Consumer Financial Protection Bureau.
Frank is not likely to spend his last year in office quietly preparing for private life. He will no doubt spend a good portion of it loudly pushing for his namesake bill’s implementation. But implementing the sweeping Dodd-Frank Act regulations has already faced several delays, mostly due to its complexity. What if the financial crisis continues and Dodd-Frank detractors convince more people its rules would hinder job creation? What if President Obama is not re-elected and cannot veto a repeal of the act? If these delays continue, will it be held up long enough for its detractors to water it down in order to pacify the financial institutions the rules are designed to reign in?
With the attention paid to it this week, it at least shows that the Dodd-Frank Act is not going to fall by the wayside. But for it to have any teeth, Democrats and supporters will have to get moving … or find another (loud) voice to replace Barney Frank’s push for financial reform. Tim Johnson, are you listening?