Why is it taking so long for the Dodd-Frank Act's many rules and requirements to become enacted? According to the legislation's co-author, former Rep. Barney Frank, D-Mass., it is all the fault of congressional and judicial Republicans.
In an opinion column published in the Financial Times, Frank insists that Republicans have targeted the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) with a series of funding cuts and judicial rulings that have damaged the agencies' ability to bring the full force of the Dodd-Frank Act into law.
‘With Republican control of the House of Representatives – which we had not anticipated when passing the bill – combined with defective rightwing Republican control of the District of Columbia Circuit Court of Appeals, regulators have been hit with what readers of the old Li'l Abner comic strip will recognize as the 'double whammy,'’ says Frank. ‘First, the SEC and the CFTC receive vast amounts of comments for each proposed rule, which they must process. Meanwhile, the Republican House appropriations committee starves them of money. Unlike the bank regulators, the SEC and CFTC have no independent funding.
‘This is where the D.C. courts come in,’ Frank continues. ‘Not only do these agencies have to go through comments, the court then grades their work with a strictness that belies conservatives' professed opposition to 'judicial activism.' On several occasions, DC courts have struck down SEC and CFTC rules, not because of any constitutional problem, but because the conservative judges think the agencies have given too little deference to the financial industry's arguments. Documenting decisions to the degree that the court requires would be difficult in any circumstance. Doing so with the lack of staff and the resources resulting from Republican underfunding is impossible.’
Frank also accuses the GOP minority in the Senate of having ‘filibustered to death an Obama appointee to the D.C. circuit.’ However, he believes that the Dodd-Frank Act will eventually be fully implemented.
‘The rules will be completed in time to prevent the type of crises that they are intended to prevent, but later than they should be,’ he says.