Republicans have a birthday card for Dodd-Frank

House Financial Services Committee Chairman Spencer Bachus (R-AL) (C) lifts copies of what he calls the 'rules' section of the Dodd-Frank financial reform bill out of a box during a news conference to discuss the impact of the bill September 8, 2011 in Washington, D.C.

Passed in the aftermath of the financial crisis, the Dodd-Frank Act sought both to prevent future economic disasters and create a better framework to deal with them, should they still arise. Monday marks its fourth birthday. How’s the toddler doing?

New criticisms

Many are still unhappy with these reforms, including Republicans in the House Financial Services Committee, who are marking the anniversary with a 100-page report criticizing the law for failing to prevent banks from becoming “too big to fail.” The report also expresses concern that some non-banks are labeled systemically important (which makes them subject to special regulations) and that label could act as a guarantee of sorts, signaling to investors that the government won’t let those companies fail if they get into trouble.

Implementation

There were about 400 different individual elements that made up Dodd-Frank. An analysis by the law firm Davis Polk found roughly half those rules have been finalized; another quarter are in the proposal phase and the last quarter still need government agencies to even come up with them.

However, even finalized rules might require tweaking.

“There’s still a tremendous amount of work to do and even the work that has been done will have to be redone over time,” says Jeffrey Manns, a law professor at George Washington University. “It’s a process of trial and error in that rules will be implemented or are being finalized, but those rules will need to be changed.”

Like a large construction project, work can begin on day one,  Manns says, but you’re going to working and tinkering for many years to come. 

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