The Treasury’s point man on the Dodd-Frank financial regulatory overhaul said the White House would move quickly to implement its framework, and would remain undeterred by Wall Street executives, lobbyists, and Republican lawmakers who want to dismantle parts of the law.
“We have made good progress in closing regulatory gaps, ending opportunities for geographic arbitrage, and preventing a global race to the bottom,” said Deputy Treasury Secretary Neal Wolin in a speech on Tuesday to the Pew Charitable Trust. “We will continue to [implement the law] in the face of these criticisms. And we will continue to oppose efforts to slow down, weaken, or repeal these essential reforms.”
The law, signed by President Obama last July, calls on federal agencies to implement more than 300 rules and regulations over the next year. Wolin says efforts to do so are underway and will be far less costly to the federal government in the longrun than permitting the financial system to crumble.
Wolin said that not implementing parts of the law would eventually result in lost jobs, more foreclosures, and a weaker economy.
The law also calls for capital requirements on banks, added supervision of the hedge-fund industry, and proprietary trading restrictions, and gives the federal government the right to seize and liquidate firms that go bankrupt.
Additionally, the Consumer Protection Financial Bureau (CFPB), which was established by Dodd-Frank and will go into effect on July 21, 2011, has stoked controversy within the business community. The U.S. Chamber of Commerce has expressed worry that it will hinder innovation.. But Wolin said the new bureau would make for more “empowered consumers” to push financial firms to increase their product and service quality. “Rather than stifling innovation, the CFPB will catalyze it,” he added.
In recent months, members of both parties have called to amend or roll back parts of the law. House Republicans have proposed bills that would exempt private equity managers from a new rule requiring them to register with the Securities and Exchange Commission and to exempt some financial derivatives deals from being hit by the law. Sen. Jon Tester, D-Mont., and Rep. Shelley Moore-Capito, R-W.Va., have introduced bills to stall the implementation of an amendment from Sen. Richard Durbin, D-Ill., which would cap prices banks charge merchants for debit card transactions at 12 cents, down from the current average of 44 cents.
Wall Street Reform Gets White House Defense (CNNMoney)
Treasury Hits Back at Wall Street Critics (MarketWatch)
Wolin Says Treasury Will Resist Efforts to Slow Dodd-Frank Rules (Bloomberg)