A daily round-up of analyses, columns and news related to the Dodd-Frank financial reform law.
Death by Delay – Nearly half the financial regulations required by the Dodd-Frank law are behind schedule, a pace that reflects some lawmakers’ attempts to effectively kill the act before the next election cycle, the New York Times reports.
So far, 28 of the financial overhaul rule-making deadlines have been missed, according to law firm Davis Polk. Of the 385 new rules to be written, regulators have completed only 24 so far, well behind the 41 rules that should have been completed by now. The setbacks affect rules ranging from a limit on debit card fees, to regulation of derivatives contracts trading, to bank capital requirements.
Says Bart Chilton, a Democrat on the Commodity Futures Trading Commission: “It’s going a lot slower than I had envisioned.”
Consumer Financial Protection Bureau – Although critics claim it will strangle financial innovation, the new CFPB may prove a boon to businesses by encouraging competition and efficient markets, reports The New Yorker.
It’s Economics 101 – a consumer bureau that arms buyers with better information will encourage comparison shopping, thereby improving the efficiency of financial markets. Currently, many consumers are confused by pages of tiny-script legalese on mortgage or credit-card agreements and often unaware of how much they are paying and why. At a time when Americans “profoundly distrust” banks, the CFPB could help the industry create better credit products for customers.
A Defense of Dodd-Frank – The Miami Herald editorial board is calling for the Obama administration to stand staunchly behind the Dodd-Frank Act, and in particular, the new Consumer Financial Protection Bureau.
Opponents of the law – mainly Republicans – have proposed legislation to sharply curtail the new bureau’s powers, citing fears of Big Government. The editorial said those efforts are misguided because the CFPB already includes the necessary checks and balances.
The Warren Threat – Elizabeth Warren, opposed by congressional Republicans for the top job at the Consumer Financial Protection Bureau, is a threat to banks because she is “so darned honest about banking abuses,” according to a Reuters columnist.
It’s not that Warren is “so bloody disagreeable,” as one ex-banker said. It’s because the tough consumer advocate wants to change the status quo and end rampant credit abuses, junk fees and other financial shenanigans buried in forms and statements only bank lawyers fully understand.