The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), the biggest change to the regulation of our nation’s financial system in decades, was signed into law by President Obama two years ago this month on July 21st, 2010. Republicans on the House Financial Services Committee have marked the occasion by holding hearings throughout the month examining the impact the law is having on the economy, jobs, housing and consumer access to credit. Coming out on the expected sides, Republican Members have used these hearings to express their concerns that the rules created by Dodd-Frank have a negative impact on job creation and overly restrict access to credit for consumers, while Democratic Members continue to defend the law and insist that the new rules “leveled the playing field” for consumers.
Financial Services Committee Chairman Spencer Bachus (R-AL) has decried the “layers of red tape” that Dodd-Frank piled on the economy, causing uncertainty for businesses and inhibiting their ability to grow and create jobs. In a recent statement he commented that “with tens of millions of Americans still unemployed, there is no more important task we have than to promote an environment that cultivates job creation, and that means thoroughly examining the job-killing provisions of Dodd-Frank.”
The Committee has held nine hearings related to the law so far this month, with one more scheduled for later this week. Last week, the Committee held hearings examining Dodd-Frank’s impact on municipal finance; Dodd-Frank’s impact on families, communities and small business; on Dodd-Frank’s impact on consumer choice and access to credit; and, earlier this month, on Dodd-Frank’s impact on home mortgages. This week, the Committee focused on Dodd-Frank’s impact on insurance regulations and yet again on consumer access to credit. In a truly rare instance, Republicans and Democrats appeared to be on the same side of an issue, sharing concerns over their constituents’ access to credit and stressing the necessity in some communities for non-bank short-term loan options. Most hearings have followed the familiar partisan script and Democrats went so far as to openly criticize Republicans for holding hearings for the sole purpose of trying to score political points.
King & Spalding also hosted a Thought Leadership event on Dodd-Frank last Friday, July 20th. The Capitol Hill event featured Congressman Ed Royce (R-CA), a senior member of the House Financial Services Committee, former White House counsels, C. Boyden Gray and Peter Wallison, former SEC Commissioner Kathy Casey, Nicole Gelinas from the Manhattan Institute, and Tom Quaadman of the U.S. Chamber's Center for Capital Competitiveness. Former Maryland Governor and U.S. Congressman Bob Ehrlich, now Senior Counsel at King & Spalding, moderated the panel discussion which reviewed the legal and economic implications of the Act.
Also this month, Several Members of the Financial Services Committee have introduced legislation to address what they see as deficiencies or gaps in Dodd-Frank. Congressman Jim Renacci (R-OH) introduced a bill to ensure that all information shared between state agencies and the Consumer Financial Protection Bureau are afforded privilege protections (H.R. 6125) and Congressman Blaine Luetkemeyer (R-MO) introduced the Consumer Credit Access, Innovation, and Modernization Act (H.R 6139), which would create a Federal charter for National Consumer Credit Corporations.
While disagreement between Republicans and Democrats over Dodd-Frank’s impact on the economy will undoubtedly continue, there is no debating the fact that regulators have a long way to go, with nearly two-thirds of the agency rulemakings yet to be finalized. Expect Congress to continue to be engaged on issues surrounding Dodd-Frank, perhaps for several anniversaries to come.