No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Compliance

Dodd-Frank is Unlikely to Be Repealed

by Pekka Dare
April 11, 2017
in Compliance, Featured
highway sign with X through “Dodd-Frank Act”

But Expect Changes

There is a distinct lack of consensus in Washington on a lot of political fronts these days, but there’s an especially heated debate in process over the Dodd-Frank Act. Dodd-Frank is a complex, cumbersome piece of legislation, and even many of its supporters would concede that changes are needed. At this date, not much is certain, but we can expect the Trump administration to chip away at some of the more controversial aspects of the Act.

It seems there is a distinct lack of consensus in American politics these days, but the closest you’ll get to finding it in is on the Dodd-Frank Act. Even many of its admirers would concede that changes are required.

The main charge leveled against Dodd-Frank – that it is a complex, cumbersome piece of legislation holding back U.S. banks – finds support in the likes of Jeb Hensarling, Chair of the House Financial Services Committee and a virulent opponent of the Act, who has adopted its dismantling as the centerpiece of his political agenda.

Those hoping to see Dodd-Frank amended are often caricatured as avaricious bankers and politicians seeking a return to the worst excesses of pre-2008 Wall Street, but such a cartoonish portrait ignores the fundamental problems that Dodd-Frank has produced – particularly the Consumer Financial Protection Bureau (CFPB), which has been accused by some on the right of “terrorizing” consumers.

The CFPB is one of several contentious parts of the Act under threat.

Rule 13q-1

Some of Dodd-Frank has already been chipped away. In February, Congress voted to repeal the “Publish What You Pay” provision under section 1504 of Dodd-Frank known as Rule 13q-1, which Trump duly signed in his first piece of legislation.

This transparency measure obliged U.S. energy firms to publish payments made to foreign governments and was stridently opposed by U.S. energy firms adamant it was a compliance burden. (The cost of compliance for the extractive industry was estimated at as high as $385 million annually.)

Scrapping an anti-corruption rule may seem to fly in the face of Trump’s election-campaign vow to “drain the swamp” of corruption, but the President’s commitment to “Make America Great Again” also means supporting U.S. businesses, which is evidently behind Trump’s decision to jettison the rule.

Durbin Amendment

The Durbin Amendment’s widespread unpopularity is due to the perception that it was the result of overreach by the federal government – in other words, that Congress arbitrated between banks and retailers, which is the responsibility of the judiciary, and came down on the side of retailers.

Durbin introduced a limit on interchange fees on debit card transactions. This should have been a victory for consumers, but it has actually resulted in a placing a higher burden on them, along with small businesses, while reducing costs for larger retailers.

That Durbin was added last minute to Dodd-Frank with little debate still rankles its opponents. The Financial Choice Act is soon to be reintroduced by Hensarling and will likely include a repeal of the Durbin Amendment.

The financial benefits garnered from interchange fees prior to Durbin were especially advantageous for banks, bringing in billions of dollars. Its introduction was unpopular, but not as unpopular as the Volcker Rule.

Bank of America CEO Brian Moynihan spoke for all of Wall Street recently by stating the need to make changes to the Volcker Rule. A report earlier this year by the Federal Reserve seems to have further hastened the Rule’s decline.

Both the Volcker and Durbin provisions can expect to come under increased scrutiny now that there is an administration in the White House looking to cut regulation.

Consumer Financial Protection Bureau

Dodd-Frank is unpalatable in some quarters because it places a great deal of power in the hands of regulatory agencies – the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., for instance – which, currently, have Obama-era administrators at the helm.

These administrators, like Richard Cordray at the CFPB, are perceived by opponents to be too powerful, unaccountable and overzealous in prosecuting companies. It cannot be denied that allegations of overreach stick when it comes to the CFPB. Had the agency used its $600 million annual budget to greater effect during its first years – instead of employing tenuous methodologies to punish auto lenders – there would be more sympathy for it on Capitol Hill.

As it is, the agency is in the crosshairs. The intention behind the CFPB’s creation was a sensible one, and when it interposes reasonably, it is an effective and useful agency (for instance, imposing a $100 million penalty on Wells Fargo for opening illicit accounts), but its mistakes tend to overshadow its successes. Of all the aspects that make up Dodd-Frank, the CFPB is the most vulnerable.

Conclusion

It would be wise to take this White House administration on its word, and the President’s opinion of Dodd-Frank is well-known. Yet rhetoric and action should not be confused, and there is likely to be a chiseling away of some of the Act’s more controversial aspects rather than a wholesale removal.  There are, after all, voices of support for Dodd-Frank from within the financial services industry.

The political battleground on Dodd-Frank will be fought over the scale of the repeals and amendments the more controversial aspects of the Act should undergo.

Regulation like Dodd-Frank is opposed on a fundamental level as being a case of government overreach, but the Trump administration will not be repealing Dodd-Frank. Instead, expect to see Trump-friendly chiefs leading the financial agencies and small-scale changes to the Act.


Tags: Consumer Financial Protection Bureau (CFPB)Dodd-Frank ActDonald Trump
Previous Post

Don’t Mess with the SEC Whistleblower Program, Part 1

Next Post

Moving the Goalposts: Justice Department Redefines Effective Compliance

Pekka Dare

Pekka Dare

Pekka Dare sits on the International Compliance Association Technical Advisory Board and has oversight of the delivery and development of ICA programmes worldwide, where he has developed a world class faculty that delivers best in class training and education programmes all over the world. Pekka has extensive experience as a practitioner, including roles as an MLRO for a multinational life and pensions firm and Head of Financial Crime Prevention of a division of a major UK bank. A qualified solicitor in the UK and New Zealand, Pekka has conducted prosecutions for tax evasion and provided legal advice in respect of organised crime groups, complex frauds and corporate tax evasion. He has also worked for the UK Department of Trade and Industry (now BERR) in the investigation of corporate fraud and misfeasance. Pekka is chairman of the Money Laundering Officer’s Discussion Group (MLODG), a body which shares best practice amongst practitioners.

Related Posts

sec pay vs perf

Are You Ready for Stepped-Up Pay Vs. Performance Requirements in 2023 Proxy Season?

by Rosebud Nau and Alexandria Pencsak
October 10, 2022

Most public companies will be required to disclose details about executive compensation starting with next year’s proxy statements, under rules...

The bronze statues fearless girl and charging bull face each other down on Wall Street in New York.

3 Recent Events Echo 2008. Asset Managers Should Take Note and Reevaluate Exposure to Systemic Risk.

by Mark Jensen and Ian Roffman
June 1, 2021

Recent events put market controls imposed following the Great Recession to the test. While turbulence from COVID-19 was brought under...

President Biden at podium on blue background

Biden’s Inauguration Heralds a New Era in Financial Regulation

by Bijaya Das and Nishanth Neeli
February 18, 2021

Known for its “America First” policy, the Trump administration led a push to roll back financial regulatory measures. As Acuity...

folder of Chinese apps blacklisted in the US (QQ, Alipay, CamScanner, WeChat, SHAREit, WPS Office)

EO Sets in Motion Ban on Transactions with Chinese App Developers and Owners

by Mario Mancuso, Sanjay Mullick and Anthony Rapa
January 27, 2021

International trade attorneys from Kirkland & Ellis discuss a Trump executive order from early this year, discussing who it impacts...

Next Post
Book cover for Moving the Goalposts by Mike Volkov

Moving the Goalposts: Justice Department Redefines Effective Compliance

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Code of Conduct Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT