U.S. Deputy Treasury Secretary Neal Wolin on Tuesday said in remarks at the Pew Charitable Trusts, a non-profit public policy organization, that the Obama administration would “oppose efforts” by critics to “weaken, slow down, or repeal” the Dodd-Frank Act, and that Congress and regulators “must move forward” with implementing this reform law.
Since President Barack Obama signed Dodd-Frank into law last summer, and “the important work of implementation” has proceeded, Wolin said, “critics of the Dodd-Frank Act have engaged in a broad set of attacks against the law and its implementation.”
Although the U.S. economy and the nation’s financial markets “have made important progress on the path towards recovery, we cannot forget why we enacted” the Dodd-Frank legislation, Wolin said. “In the fall of 2008, we witnessed a financial panic of a scale and severity not seen in decades. The crisis was brought about by fundamental failures in our financial system.”
The nation, Wolin said, “had no choice but to build a better, stronger system. That’s why we proposed, Congress passed, and the President signed into law a sweeping set of reforms [under Dodd-Frank] to do just that.”
As regulators have been “hard at work” over the last nine months implementing “critical reforms contained in Dodd-Frank,” Wolin continued, and as “millions of Americans are still recovering from the [financial] crisis, some on Wall Street, K Street and Capitol Hill seek to slow down, roll back, or even repeal these crucial reforms” under Dodd-Frank.
Critics, Wolin said, complain the pace of reform under Dodd-Frank is moving too quickly; that there’s a lack of coordination among regulators; that transparency in the derivatives markets will harm liquidity; that reforms will unfairly disadvantage U.S. firms as they compete globally; that the new consumer protection agency will stifle consumer choice and innovation; and that we cannot afford to pay for Dodd-Frank.
While regulators “have been and are moving quickly but carefully to implement” Dodd-Frank, Wolin said, “we continue to seek public input. And of course, it remains critical to get the details right.” Although there may be reasonable debate about the substance of Dodd-Frank implementation work, he continued, “there is no question that regulators have been implementing the statute in a careful, considered, and serious manner.”
In response to Wolin’s remarks, Tim Ryan (left), president and CEO of the Securities Industry and Financial Markets Association (SIFMA), said in a statement that while SIFMA shares Treasury’s goal of making sure there is “full implementation of the Dodd-Frank Act,” implementation of Dodd-Frank “is too important not to be done right for the sake of meeting arbitrary deadlines.” Ryan added that “rushing to meet deadlines without proper thought, analysis and coordination amongst regulators will only result in a fragmented regulatory structure, regulatory arbitrage, and uncertainty in the market place, which would lead investors to withhold capital desperately needed to fuel economic growth.”
The “most striking criticism of all,” Wolin said, “is that we can’t afford these new protections” under Dodd-Frank. “Some say that regulatory reform is too costly. We say that the costliest system of all is one that’s prone to collapse.” The strategy of some critics “to defund enforcement or implementation is part of a larger strategy to undermine the statute and weaken the comprehensive reforms it puts in place,” he continued. “We cannot afford to let that happen.”