– On the fourth anniversary of the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Financial Services Committee Ranking Member Maxine Waters
(D-CA) released a Democratic staff report
that documents the important progress regulators have made in implementing Dodd-Frank, as well as the unyielding Republican effort to undercut it.
The report highlights the significant milestones achieved by regulators, while underscoring there is much more to do. It provides a comprehensive summary of the Republicans’ “aggressive, unrelenting campaign to repeal, weaken, or otherwise pressure regulators to significantly alter provisions in nearly all titles of the Act.” The report points out that this has been further complimented by GOP efforts to underfund regulators such as the SEC and CFTC and subject their rulemakings to constant implementation hurdles and court challenges.
“If enacted, the cumulative effect of these efforts would render the Dodd-Frank Wall Street Reform and Consumer Protection Act essentially toothless, inviting a return to the opacity, risk, and deregulation that caused the 2008 crisis,” the report reads.
Upon release, Ranking Member Waters
emphasized the importance of Dodd-Frank, saying:
"Although many continue to fight implementation of the Wall Street Reform Act, it has already changed the paradigm for how consumers, investors and other market participants interact with our financial system. It has provided much-needed oversight to Wall Street, given regulators the tools to end the era of ‘too big to fail’ entities and taxpayer bailouts, and put a new federal agency on the front lines of protecting consumers from bad actors in the financial system.
“In the aftermath of a crisis that shook the global economy to its core, the need to reform Wall Street was non-negotiable. But the fact remains that four years later, Republicans still oppose common sense regulation and continue to protect Wall Street. In fact, they have waged an unrelenting campaign to destroy Dodd-Frank, while not providing an alternative.”
The report also takes a look back at why Dodd-Frank was needed, reminds us about the cost of the crisis, and explains the high popular support that strong Wall Street regulation still enjoys. It also details how the law and regulators have provided important relief to small financial institutions and small businesses. And the report talks about the widespread success of the Consumer Financial Protection Bureau (CFPB), the immensely popular and successful consumer watchdog that came out of Dodd-Frank.
The report also cites the significant progress in implementation, reading:
“Regulators have made tremendous progress in implementing the Dodd-Frank Act. The Consumer Financial Protection Bureau has already returned $4.6 billion to 15 million consumers who have been subjected to unfair and deceptive practices. The Bureau has established a qualified mortgage rule, ensuring that borrowers who are extended mortgage credit actually have the ability to repay the loan, and has established new rules-of-the-road for mortgage servicers. Additionally, it has worked with the Department of Defense to develop financial protections for service members and veterans, and established a national database to aide consumers with complaints about debt collectors, credit card companies, and credit rating agencies, among others.
The Volcker Rule has forced banks to sell-off their standalone proprietary trading desks, and banks have shifted away from speculative trading to investments in the real economy. Shareholders of U.S. corporations now have the ability to have a “say-on-pay,” voting to approve or disapprove executive compensation. And the Securities and Exchange Commission (SEC) has recovered more than $9.3 billion in civil fines and penalties since 2011, leveraging enhanced authorities provided by Dodd-Frank. The SEC has also established an Office of the Whistleblower to aid them in policing securities market violations, which has already received more than 6,573 tips from 68 countries. Further, private funds are making systemic risk reports to regulators, helping them to understand previously opaque risks…
However, this progress has been regularly stymied by a concerted effort by the Majority to underfund regulator operations, relentlessly pressure them to weaken regulations, and otherwise erect roadblocks to implementation. As a result, the progress regulators have made to implement the law remains precarious.”
The report is available online here
to read the executive summary.