The Future of the Dodd-Frank Reforms Hinges on Political Developments and the Forcefulness of the US Federal Regulators

The Wall Street Reform and Consumer Protection Act (the Act) is the most significant US corporate and financial law reform since the ground-breaking 1930s legislation. The long title of the Act states that the purposes are:(i) to promote the financial stability of the US by improving accountability and transparency in the financial system;(ii) to end "too big to fail";(iii) to protect the American taxpayer by ending bailouts; and(iv) to protect consumers from abusive financial services practices.The Act was signed into law on 21 July 2010, and named after Representative Barney Frank, who proposed the Bill in the House, and Senator Chris Dodd, the Chairman of the Senate Banking Committee.The nature, scope and impact of the reform package remain uncertain more than two years after its enactment. The Act provided only a broad policy framework. It left the primary federal regulators, the Federal Reserve (the Fed), the US Department of the Treasury (Treasury), the Federal Deposit Insurance Corporation (the FDIC), the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to study, consider and determine the actual provisions of many of the most controversial provisions. While significant progress has been made, some of the most substantive rules still have not yet been agreed or adopted.The federal regulators are struggling under the weight and complexity of the reform programme.The difficulties they face are not limited to simply the legislative requirements. They are being subjected to sustained and intense lobbying from the many vested interests groups (and their political advocates) to erode or weaken the most contentious provisions. The general culture of political impasse in Washington adds to this burden. While agency heads plead for more resources to enable them to implement the rules, the Republicans are pushing to cut their budgets.This column seeks to give a brief overview of the entire Act and to assess the protracted journey towards the final form of the regulation