WASHINGTON — As regulators continue to implement the Dodd-Frank Act one year after its passage, a key backer of financial reforms in the Senate warned "the battle is not over."
Speaking on the one-year anniversary of the sweeping law Thursday, Sen. Carl Levin, D-Mich., said the same challenges that confronted Congress in the legislative debate are playing out in the regulatory process as well.
"Since passage, regulatory agencies have been working to turn the provisions of Dodd-Frank into detailed regulations. They have been subjected to the same barrage of bank lobbying that accompanied our debate in Congress. Banks have spent more than $50 million so far this year lobbying to weaken Dodd-Frank," Levin said in prepared remarks to the Aspen Institute.
Levin said certain provisions, including the 'Volcker Rule' — an idea conceived by former Federal Reserve Board Chairman Paul Volcker and put into Dodd-Frank by Levin and others -- to ban banks' proprietary trading gave agencies flexibility in rule-writing.
"In some cases, Congress gave regulators fairly broad discretion in implementing Dodd-Frank, and financial lobbyists are doing everything they can to make sure those regulations are as weak as possible. Proprietary trading is just one example," Levin said.
"Consumers and the American economy won an important victory one year ago today. But that victory will not be secure until Dodd-Frank has teeth — tough rules backed by conscientious enforcement. Some are pulling every trick in the book to slow these regulations and weaken their impact. But the success we had in passing Dodd-Frank shows that the powerful interests don't always win."
