Thursday, May 2, 2013

3 Years Later Only 37% of Dodd-Frank Wall Street Reform Is In Place

Maybe the 99 percenters had it right all along; there's a battle going on in this country right now between Wall Street and Washington DC and its outcome will affect all 300 million of us here in America.  However, you won't hear about it on the news and you won't read about in the papers.  Why not?  Because it's about things called "derivatives," "credit default swaps," "futures" and a whole bunch of other complicated financial mumbo-jumbo you've probably never heard of that the media has a hard time sensationalizing to the general public.  If the topic of this debate was religion, race, guns or sex then we'd be seeing it all over the 6 o'clock news everyday for the next 3 months straight because the media has an easier time selling that stuff to the masses.  We can't hear enough about what Kim Kardashian is up to these days.  But when it comes to Wall Street, your average American has no idea what the hell goes on there, let alone why they should even be concerned about it.

But America found itself becoming extremely concerned with the affairs on Wall Street in 2008, didn't it?

By then it was too late.  As we've explained before, the recession that we all saw in 2008 was the culmination of events that had been going on for many years.  Perhaps if Americans had been more concerned with the aforementioned "mumbo-jumbo" before 2008 then we could have avoided crashing our economy into a ditch and taking the rest of the world economy down with us.  But you know how we do, America - if it's not smacking us upside the head in our day-to-day lives then we tend to be oblivious to whatever "it" is.  So in the interest of going upside our collective heads, let's talk about the latest exposé on the Wall Street Reform and Consumer Protection Act (aka "Dodd-Frank").

For our long-time readers, you may recall me talking about a legal class I attended about a year and a half ago on Dodd-Frank.  During that class, the presenters told us the following:
Since the 2010 midterm elections, the Republican majority in the House of Representatives has consistently voted to defund the two branches of government most responsible for drafting the details of the regulations that Dodd-Frank requires: the Securities and Exchange Commission ("SEC") and the Commodity Futures Trading Commission ("CFTC").  Without funding, the SEC and CFTC literally do not have the money to hire the lawyers they need to draft the new Dodd-Frank regulations.
That was 2011.  You'd think that things would have gotten better now since we're in 2013 and the election is over, but as The Nation recently confirmed:
Three years after Dodd-Frank was passed, only 148 of the 398 rules requiring action by regulators have been finalized, and draft versions have yet to be submitted for half of the remainder...The CFTC has finalized forty of its sixty rules, according to the Dodd-Frank Progress Report...That leaves a lot of rules that still need to be finalized before there’s a workable derivatives market. Still, compared with the other agencies, the CFTC has proved to be a speed demon. The SEC has barely finalized one-third of its rules, and the various bank regulators (the Fed, the FDIC and the Office of the Comptroller of the Currency) are faring even worse. As a group, they’ve failed to publish draft language for one-third of their portfolio of assignments and have finalized only 27 percent of its rules.
Why are all of these federal executive branch agencies so far behind in putting Dodd-Frank in place?  The answer is quite simple: because some people are spending a boat-load of money to make sure that Dodd-Frank doesn't happen.  And if I was the CEO of Goldman Sachs, JP Morgan Chase, or Bank of America I'd probably be doing the exact same thing.  So I can't even be mad at those guys.

I do, however, take issue with the members of Congress who lost the vote on Dodd-Frank in 2010 but who, nevertheless, continue to do everything in their power to defund the federal agencies mentioned above in order to prevent them from putting Dodd-Frank in place.

That's not how democracy works, folks.

Democracy is where you argue for your idea, I argue for my idea, and whichever idea gets the most votes wins.  If you win, we try it your way.  If I win, we try it my way.  But under no circumstances do we sabotage the winner's idea just because we didn't get our way.  That's some reality TV show type mess.  I'm going to need the United States Congress to be a little bit better than that. 

1. If you've read this article in The Nation, what is your take?
2. Is Dodd-Frank too much regulation?  If so, what needs to go/stay?
3. Are the tactics of the Republican House Members above board or below the belt?
4. Aren't we wasting a lot of time, money and energy by preventing the federal agencies from implementing legislation that passed 3 years ago?
5. What's the solution here?
blog comments powered by Disqus