When the Dodd-Frank financial reform law became official in 2010, supporters hoped it would herald in a new era of sobriety and transparency for the financial sector -- largely through the implementation of hundreds of rules meant to prevent another crisis like the one that rattled the economy in 2008.
But for the most part, this has yet to come to pass. Only one-quarter of the rules that regulators were supposed to have written by now have actually been devised.
As of New Year's Day, two hundred deadlines for writing rules based on Dodd-Frank have come and gone, according to a report from the law firm Davis Polk. Regulators have missed 149 of these, meaning they've only met about one out of every four deadlines so far.
All told, the Dodd-Frank law contains 400 rule-making requirements. Only 286 have time-specific deadlines, meaning that most of those have already passed.
The Davis Polk report provides evidence for a common criticism among financial reform advocates -- namely, that the government, many of whose members have close ties to the banking sector is dragging its feet on formulating rules that would place checks on financial institutions and force them to adopt safer positions in case of another systemic shock.
Financial lobbyists have come out strongly against Dodd-Frank, as have a number of conservative politicians, including virtually all of the Republican presidential candidates.
On Wall Street, where profits fell by about $3 billion in the third quarter of 2011, opponents of Dodd-Frank say the planned regulations will further stifle firms' performance. On the campaign trail, a common refrain for Mitt Romney, Newt Gingrich and other candidates has been that the rules outlined in Dodd-Frank will discourage lending, smother small businesses and worsen the nation's unemployment problem.
The Hill notes that such strenuous political opposition to Dodd-Frank has probably contributed to the lag in regulators writing rules. Regulatory agencies like the Commodity Futures Trading Commission, which has missed 31 deadlines out of 54 so far, and the Securities and Exchange Commission, which has missed 59 deadlines of 73, have not gotten the budgets from Congress that the White House has requested for them, largely due to opposition from some lawmakers. In November, Congress approved a budget for the CFTC that was about $100 million less than what President Obama had sought.
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