Report Shows Dodd-Frank's Unfulfilled Promises

On the fifth anniversary of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, key provisions of the law still have not been implemented or are inadequately enforced, a new Public Citizen report (PDF) shows. The report, "Dodd Frank Is Five: And Still Not Allowed Outside the House," documents the poor implementation of the law.

"Five years after President Barack Obama signed this legislation, Dodd-Frank remains largely incomplete," said Bartlett Naylor, Public Citizen's financial policy advocate and author of the report. "Major portions of the law have yet to be codified into specific rules. Many enforcement dates are set well into the future, and certain rules are not yet being implemented and enforced to the fullest extent of the law." Of the 390 rules required by the law, fewer than two-thirds have been completed; 60 rules have yet to be finalized, while another 83 have not even been proposed, according to a tally by law firm Davis Polk.

Dodd-Frank promised that America would never again be held hostage by banks that are too big to fail, but that promise remains unfulfilled, the report finds. Instead, industry-captured regulators and members of Congress hungry for campaign contributions from Wall Street continue to delay and dilute the law.

The report reviews the Volcker Rule ban on short-term speculation, the now-repealed provision that required swaps speculation to take place outside of taxpayer-backed banks, the rule barring pay schemes that reward excessive risk-taking, and the "living will" powers that allow regulators to break up major financial institutions.

In many cases, regulators have either failed to finalize rules, granted exemptions and lenient compliance phase-ins, or ignored powers granted by Congress.

"Regulators and lawmakers who put Wall Street interests ahead of public interests aren't fulfilling the law's intent," said Lisa Gilbert, director of Public Citizen's Congress Watch division. "Instead of rolling back key provisions, our officials should be taking full advantage of this important Wall Street reform law to protect Main Street financial markets."

Read the report (PDF).