It's been more than a year and a half since President Barack Obama signed the Dodd-Frank Act into law, promising that the new financial regulations "demand accountability and responsibility from everyone" and "provide certainty to everybody, from bankers to farmers to business owners to consumers."
So far, only one thing is certain -- not much has happened.
As of today, less than one-quarter of the 400 total rulemaking requirements have been implemented, only 40 percent have been proposed and regulators have missed almost three-quarters of their deadlines, according to a progress report by Davis Polk, a law firm that represents some clients impacted by the law.
The complexity of the rules and the intense lobbying of the financial industry have played a major role in the law's slow progress. In some crucial areas, such as the reform of banking regulations, derivatives and credit rating agencies, the majority of the deadlines for proposing and implementing new rules have been missed. And not a single rule related to executive compensation and corporate governance has been finalized so far.
The debate promises to heat up in the coming months -- both Republican front-runners Mitt Romney and Newt Gingrich have called for the repeal of Dodd-Frank -- which could further slow down implementation. The Securities and Exchange Commission recently published a timeline for proposed rules for the next six months, and they include some of the most contentious proposals governing asset-backed securities, municipal securities and investor protections.
The intensity of the industry pressure can be overwhelming -- petroleum marketing firms, airlines and lobbyists represented the majority of 13,000 comment letters sent to the Commodity Futures Trading Commission over a single proposed rule on position limits, the highest number of commodity futures and contracts that a trader can hold, the Sunlight Foundation reported last September.
For the second year in a row, the financial industry spent over $150 million on lobbying expenditures, with the focus shifting from Congress in 2010 to regulators in 2011.
In some cases, Wall Street is changing its own practices in anticipation of long-delayed regulations. Under the law, six agencies were mandated by early 2011 to adopt rules on incentive-based compensation, but the deadline has been repeatedly postponed. In recent weeks, financial leaders such as Morgan Stanley, Bank of America and Credit Suisse changed their policies to defer bonuses until next year.
Treasury Secretary Timothy Geithner vowed last week that the most important Dodd-Frank rules will be in place by the end of the year. "I know that people are concerned that they will be too tough," Geithner told the Charlotte Chamber of Commerce. "I don't think there is much risk of this. I think there is no evidence of that."
Despite Lawmakers' Rhetoric, Small Biz Supports Most Regulations
Despite the tsunami of conservative rhetoric denouncing "burdensome" government regulations, it turns out that most small business owners support them.
Almost 80 percent of small business owners see government rules as a crucial way to compete with big business, 86 percent view regulations as a necessary component of a modern economy, and more than three-fourths said that existing regulations should be enforced, according to a poll conducted by Lake Research. When it comes to specific regulations, 84 percent of small business owners support food safety standards (not sure who the 16 percent are that don't support such standards), and 67 percent support rules to cut back on financial speculating by Wall Street.
As The Hill notes, these poll results are consistent with previous surveys. Last September, McClatchy News Service interviewed small business owners, not one of whom complained about regulations and most of whom welcomed them.
Stringent Rules Can't Prevent Stupidity
Tough fines and other sanctions aren't enough to dissuade some brokers from being just plain stupid.
According to a Reuters review of disciplinary actions by the Financial Industry Regulatory Authority:
- An Ameriprise Financial broker was barred from the securities industry for borrowing $45,000 from an 102-year-old customer and subsequently ignoring FINRA's request to interview him about it.
- A broker failed to disclose a felony plea to a potential employer.
- A broker was busted for trying to cheat on a licensing exam by walking out of the room and peeking at a study guide he had hidden in his car.
* One of the Pentagon's main health care contractors recently paid a $10 million fine to settle a Justice Department lawsuit over claims that TriWest Healthcare Alliance defrauded the government by failing to pass on savings to the military, reports USA Today.
* This huckster's last name should have tipped off unsuspecting payday loan seekers to his scheme. Michael Bruce Moneymaker, Daniel de la Cruz and their companies were ordered by the Federal Trade Commission on Wednesday to pay almost $10 million for secretly enrolling consumers in negative-option programs that cost initial $50 fees and recurring fees of up to $20.
* It wasn't quite a "dope on the table" moment, but U.S. Attorney General Eric Holder helped celebrate the 25th anniversary of the False Claims Act Tuesday. The law -- which recovers money from those who defraud government programs, Medicare and Medicaid, national security programs, disaster relief loans and agricultural subsidies -- has resulted in the recovery of more than $30 billion in judgments and settlements, reports the Project on Government Oversight.
* In its rush to meet deadlines to approve new drug applications, the Food and Drug Administration may end up overlooking safety problems, according to a study by researchers from Harvard, Stanford and Brown.
* In a new report that somehow neglects to mention orange-hued House Speaker John Boehner (R-Ohio) even once, House Democrats on the Energy and Commerce Committee accused the indoor tanning industry of misleading teenagers about the procedure's health effects. About 80 percent of the tanning salons reviewed by the committee's investigators claimed that indoor tanning actually would be beneficial to the health of a fair-skinned girl, with some even insisting that tanning would prevent cancer, treat depression and reduce weight.
* That Mexican-style food chain identified by the Centers for Disease Control as "Restaurant A" in its report on a 10-state outbreak of salmonella is Taco Bell, reports Food Safety News.
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