Last year's highly imperfect Dodd-Frank law laid out broad principles for overhauling the nation's financial system, but left the details to regulators. So now 20 different regulatory agencies are busy hammering out the new rules, a long, tedious process that's turning out to be as ugly and contentious as passing the law in in the first place, ProPublica's Pulitzer Prize-winning duo Jesse Eisinger and Jake Bernstein report.
"Government officials … are inserting exemptions as they formulate rules to enforce the law. Some regulators, facing severe budget constraints, caution that they may not be able to carry out some of its key provisions. Foes of the law in Congress, and even some former friends, are voicing concern that aspects of the law could erode American competitiveness. Wall Street is mounting a determined lobbying campaign to blunt provisions it failed to defeat on the floors of the House and Senate."
D-F Co-sponsor Barney Frank isn't too worried ("The first set of rules are going to be good ones," he says) but the process is giving others plenty of pause. "[Dodd-Frank] was doomed at the outset and nothing can possibly salvage it. We might even have been better off without it," says Arthur Levitt, a former chairman of the Securities and Exchange Commission; and former Democratic Sen. Ted Kaufman, who worked on the legislation, says, "I am concerned that we are not putting in place the things that we need to do to prevent [a massive financial crisis] from happening again."