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July 21, 2011 marked the one year anniversary of the Dodd-Frank Financial Reform Act. It was said to be a response to the conditions that led to the most recent recession. While it was touted as a serious reform to business as usual, it has not played out that way thus far.
Implementation Has Not Gone As Intended
The Dodd-Frank Financial Reform Act set aggressive deadlines for implementation of various components of the act. However, many of those have yet to materialize. In fact, hundreds of mandated rules have yet to be written.
Of the over 170 rules that have been proposed, approximately 2 dozen have been finalized.
The SEC missed many of it’s rule-making deadlines that passed in mid-July of this year.
Overall, the implementation of this act has had a very shaky first year.
Plenty of Opposition
Many in the political world oppose this act.
There are 24 bills pending in Congress to eliminate portions of it. Presidential candidates are blaming a lackluster economic recovery in part on the Dodd-Frank Financial Reform Act, as well.
The business world also has many opponents of this Act.
The Independent Community Bankers of America (ICBA) is concerned with and working to correct portions of the bill. An example is a rule that mortgage purchasers would have to pay a down payment of at least 20 percent. They argue that this will be very difficult for first-time and low-income home purchasers to meet.
In general, the business community does not seem too pleased with this act and it has often been labeled as a “job killer.”
The future of the Dodd-Frank Financial Reform Act remains in question.
The current big-government mentality in Washington is likely to ensure that it does not go by the wayside. However, pressure from the business world, Congress, and Presidential candidates may restrain the intentions of this act.
If Barack Obama holds on to the Presidency, expect to see it have an easier time with implementation.
If a relatively fiscally conservative candidate wins in 2012 and/or if the Congress is shaken up in a similar direction, then the future of this bill may be in serious doubt.
Regardless, how effectively this act is implemented in the next year may be extremely important to whether or not it is implemented as intended, as possible changes in the Federal Government could have significant adverse consequences to it’s fate.