Dodd-Frank One Year Later: A Lot of Unfinished Business

The one-year anniversary of the Dodd-Frank Act (DFA) marks an important moment to review and reflect on the transformative changes that have taken place since enactment of the sweeping reforms.  Yet, much of the work to implement those reforms is still underway.A slew of reports and studies were released to recognize the significant milestone, and of which there are a few worth reviewing:

  • CFPB’s Progress Report: as one of the first reports issued by the agency that officially assumed authority on July 21st, 2011, the report provides an update on the initial, closely-watched efforts of the Bureau to write and enforce rules and apply its regulatory authority.More than anything, this report provides the Bureau’s guiding framework and priorities: ensuring clear and transparent prices and risks for consumers, stamping out unfair, deceptive, and abusive practices, and making consumer financial markets more consumer friendly and safe.
  • Davis Polk’s One-Year Anniversary Progress Report: this report provides a comprehensive analysis of DFA implementation, and includes status updates on rulemakings, mandated reports and studies, and deadlines and timelines.Notably, the report finds that only 20% (33/163) of the required rulemakings have been completed by the regulators.(not to be outdone, Morrison and Foerster also published a similar report).
  • Michael Barr’s Speech Reflecting on DFA: as one of the chief architects of the regulatory-reform package, Barr’s insights play a particular important role in understanding the direction of financial regulation in the post-DFA era.He is continually consulted for advice about the ongoing implementation efforts.Below is a selected excerpt of the speech.

Comprehensive reform was essential. One year ago, President Obama signed into law the Dodd-Frank Act. The Act provides for supervision of major firms based on what they do, rather than their corporate form. Shadow banking is brought into the regulatory daylight. The largest financial firms will be required to build up their capital and liquidity buffers, constrain their relative size, and place restrictions on the riskiest financial activities. The Act comprehensively regulates derivatives markets with new rules for exchange trading, central clearing, transparency, and capital and margin requirements. The Act provides for data collection and transparency so that in no corner of the financial markets can risk build unnoticed. The Act creates an essential mechanism for the government orderly to liquidate failing financial firms without putting taxpayers at risk. The Act creates a new Consumer Financial Protection Bureau and provides for consumer and investor protections.

A video of the speech can also be found here.

James Nguyen,Dodd-Frank One Year Later: A Lot of Unfinished Business,Berkeley Bus. L.J. Network (July 23, 2011),