WASHINGTON (AP) – Three years after President Barack Obama signed a sweeping overhaul of lending and high-finance rules, execution of the law is behind schedule with scores of regulations yet to be written, let alone enforced. Meeting privately with the nation’s top financial regulators on Monday, Obama prodded them to act more swiftly.
The president’s push comes as the five-year anniversary of the nation’s financial near-meltdown approaches. The law, when passed in 2010, was considered a milestone in Obama’s presidency, a robust response to the crisis that led to a massive government bailout to stabilize the financial markets.
The slow pace of implementation has prompted administration concern that banks still could pose potentially calamitous risks to the economy and to taxpayers. Obama hoped to convey “the sense of urgency that he feels,” spokesman Josh Earnest said before the president convened the meeting with the eight independent regulators in the White House Roosevelt Room.
Lehman Brothers collapsed into bankruptcy on Sept. 15, 2008, and the administration has wanted to use that dubious milestone to look back on the lessons of the crisis and progress so far to prevent a recurrence. In a statement at the conclusion of the meeting, the White House said Obama commended the regulators for their work “but stressed the need to expeditiously finish implementing the critical remaining portions of Wall Street reform to ensure we are able to prevent the type of financial harm that led to the Great Recession from ever happening again.”
Not everyone feels that way about the law, known as Dodd-Frank after its Democratic sponsors, Rep. Barney Frank and Sen. Christopher Dodd.
The law set up a council of regulators to be on the lookout for risks across the finance system. It also created an independent consumer financial protection bureau within the Federal Reserve to write and enforce new regulations covering lending and credit. And it placed shadow financial markets that previously escaped the oversight of regulators under new scrutiny, giving the government powers to break up companies regulators believe threaten the economy.
Because of the complexity of the industry, the law gave regulators extended time to write the new rules that would enforce its provisions.
The rules are so complicated, that the ones already written have filled about 13,800 pages of regulations, compared to the 848 pages it took to write the law itself.
“I would have to give it a mediocre grade at this point,” said Sheila Bair, the former chair of the Federal Deposit Insurance Corp. “Most of the rules have not been finalized. A lot of them haven’t even been proposed yet. When some of the rules have been proposed, they’re highly complicated, they’re riddled with exceptions, they’re watered down.”