On the eve of the first anniversary of the enactment of the Dodd-Frank financial reform law, regulatory agencies responsible for implementing the sweeping law are blowing past deadlines at an ever-increasing pace.
As of Friday, 131 rulemaking deadlines will have been missed, including 105 in just the past three weeks, according to a projection by Davis Polk & Wardell LLP. The law firm's regulatory tracker says that 49 rules will have been finalized and 30 proposed. There will still be 190 rulemakings pending.
The Dodd-Frank bill was signed into law July 21, 2010, and many of the approximately 400 rules are due on the first anniversary of that day.
“‘Missed' deadlines are rulemakings and studies that were due, but which have not been finalized as of the date of the progress report,” the preliminary Davis Polk report said. “Rulemakings and studies issued after the statutory deadline appear as final, not missed. Missed deadlines for which there are proposed rules are counted as ‘missed,' not ‘proposed.'”
The law firm released its preliminary report Tuesday and will post a final version on its website Friday.
The Securities and Exchange Commission had 66 rules due by Friday and is projected to miss 54 of them, having completing 12 after their deadlines, according to Davis Polk. The Commodities Futures Trading Commission was slated to deliver 47 rules, missed 39 deadlines and completed eight rules after their deadlines. Other bank regulators had 30 rules due, missed 20 deadlines and completed 10 after the deadlines.
Another analysis asserts that the rules put in place don't touch on the most important issue Dodd-Frank was supposed to tackle.
“By and large, the rules that have been finalized do not address or resolve the core systemic risk issues in the act,” according to a report released this week by the law firm Morrison & Foerster LLP. “A number of agencies have extended the comment periods, or re-proposed rules. With elections coming up, and with international reform measures dragging along, one cannot help but wonder how, when or even if many of the act's reforms will be put in place.”
Republican and business-community critics of Dodd-Frank say that the plethora of mandated regulations will crimp the availability of credit and undermine the halting economic recovery.
They point to the trouble that agencies have keeping up with the rule deadlines as evidence that the measure went too far — although, at the same time, they are encouraging financial regulators to get the rules right rather than rushing to meet deadlines.
One of the co-authors of the law, Rep. Barney Frank, D-Mass., ranking minority member of the House Financial Services Committee, has said that there are no statutory penalties for agencies that miss deadlines. T
In a press conference last week, Mr. Frank said that the measure is “holding up very well,” despite attempts by the GOP to stall implementation.
“I am struck, at least in public, how little advocacy there has been for substantial changes,” Mr. Frank said. “It is still too popular” among voters for the GOP to make head-on attacks.
The shear breadth of the law contributes to the challenge of putting it into effect, according to David Tittsworth, executive director of the Investment Adviser Association Inc.
“The legislation is so complicated and so sweeping,” Mr. Tittsworth said. “If all the deadlines had been met, that would be the miracle, not the other way around.”