|JIM KUHNHENN, Associated Press|
The president's push comes as the five-year anniversary of the nation's financial near-meltdown approaches. The law, when passed in 2010, was considered a milestone in Obama's presidency, a robust response to the crisis that led to a massive government bailout to stabilize the financial markets.
But the slow pace of implementation has prompted administration concern that banks could still pose potentially calamitous risks to the economy and to taxpayers. Obama hoped to convey "the sense of urgency that he feels," spokesman
Not everyone feels that way about the law, known as Dodd-Frank after its Democratic sponsors, Rep.
Three years after passage, many other Republican lawmakers also see the law as more negative than positive.
The law set up a council of regulators to be on the lookout for risks across the finance system. It also created an independent consumer financial protection bureau within the Federal Reserve to write and enforce new regulations covering lending and credit. And it placed shadow financial markets that previously escaped the oversight of regulators under new scrutiny, giving the government new powers to break up companies that regulators believe threaten the economy.
But because of the complexity of the industry, the law gave regulators extended time to write the new rules that would enforce its provisions.
So far, regulators have missed 60 percent of the rule-making deadlines, according to an analysis by the law firm of DavisPolk, which has been tracking progress on the bill. Even so, the rules are so complicated, that the ones that have already been written have filled about 13,800 pages of regulations, compared to the 848 pages it took to write the law itself.
"I would have to give it a mediocre grade at this point," said
A key goal of the legislation was to prevent a rebuilding of a financial system that would permit banks to become so huge and intertwined that they would be "too big to fail." But the nation's top banks today are bigger than they were in 2008. A key proposal in the law would restrict banks from trading for their own profit, a practice known as proprietary trading. That rule, named after former Federal Reserve Chairman
The rule-making has encountered legal challenges as well. Retailers sued over a rule that set a top limit on the fees that banks could charge vendors for handling purchases made with debit cards. A federal judge agreed with a coalition of retailers who wanted a lower cap and called the rule by the Federal Reserve "a blatant act of policymaking that runs counter to
At the same time, other central elements of the law have fallen into place.
The Federal Reserve last month raised the amount of capital that big banks must hold to reduce the threat they might pose to the broader financial system. The requirements, which meet international standards agreed to after the downturn, have met some resistance from financial institutions as being too high, but have also been criticized for not being high enough.
"There is a trade-off between holding capital and the ability to lend," said
The Fed on Monday said that while big banks have made progress in preparing for strains like those brought by the 2008 financial crisis, they also need do a better job determining how much capital they need to cushion against a future crisis. The Fed's report, based on stress tests applied to the banks, coincided with Obama's meeting with regulators.
Associated Press Economics Writer
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