Monday of this week was the fourth anniversary of the signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Like all anniversaries, it is a time for looking back. As would be expected, the financial media is replete with articles and op-eds trying to make sense of what has and has not been accomplished since Dodd-Frank took effect. Fourth anniversaries, in particular, are special as they remind us of the tenure of our days in high school. The National Center for Education Statistics reported in 2013 that, based on data collected for the Class of 2010, 78 percent of America’s high school students earned a diploma within four years of starting high school, the highest rate in nearly 40 years.

According to numerous sources referencing certain Dodd-Frank rulemaking progress reports, Dodd-Frank continues to tax the resources of the regulatory agencies charged with its implementation. As of last Friday, July 18, 2014, only 208 of the 398 regulations required by the Act have been finalized, and more than 45 percent of congressional deadlines have been missed. 

In an op-ed article appearing in Monday’s Wall Street Journal, Peter J. Wallison, a Senior Fellow at the conservative American Enterprise Institute, opines that Dodd-Frank has “overwhelmed the regulatory system, stifled the financial industry and impaired economic growth.” Mr. Wallison continues, “With many more regulations still to come, Dodd-Frank is likely to be an economic drag for many years.”

In a report released this week, the House Financial Services Committee Republicans, echoing the sentiments of others on the right, contend that the Act has failed to end the prospect of future government bailouts and actually has exacerbated the belief that some financial firms are “too big to fail.” Across the aisle, many Democrats, including President Barack Obama, apparently believe that additional steps must be taken to reduce “excessive risk taking in the financial sector.” Representative Maxine Waters, the ranking Democrat on the House financial panel, stated that Dodd-Frank “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.”

The “new” regulatory regime has prompted banks and other industry participants to add thousands of regulatory and compliance professionals, even as many are reducing their overall headcounts. Ironically, while many media sources believe that Dodd-Frank remains a boon to financial services industry attorneys, statistics compiled by the Law School Admission Council indicate that law school applications are down 37 percent since 2010.

Are even more drastic measures needed to safeguard the financial system? Or will additional rulemaking impair financial growth by disincentivizing banks from key activities like lending? After four years, there seems to be no end in sight to the debate. Despite recent tumultuous global events, including the downing of a Malaysian jetliner and the conflict in Gaza, most commentators agree that the markets have been quite resilient. We can only wait and watch to see whether world events or other factors trigger another “financial crisis” which will test whether and to what extent the costs of de-risking the financial industry helped to protect the global economy.