Financial Regulatory Reform: We've Only Just Begun
This post was writen by Chris Rissetto and Joelle Laszlo.
While most people probably do not associate actions of Congress with the 1970s American pop band The Carpenters, there is a nice reminder in the duo’s music that the passage of a bill on the Hill is often only the first step in an extensive process to draw up the actual rules that will govern how American businesses are to behave. According to an analysis by the U.S. Chamber of Commerce, for example, implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank” or “the Act”) will require 520 rulemakings, 81 studies, and 93 reports. Ten Federal entities, including the Federal Reserve (“Fed”), the Treasury Department (“Treasury”), the Securities and Exchange Commission (“SEC”), and two agencies created by the Act – the Consumer Financial Protection Bureau and the Financial Stability Oversight Council – will be responsible for solely or jointly issuing new rules under the Act. The SEC (both on its own and with the Commodities and Futures Trading Commission), the Fed, and Treasury’s Office of the Comptroller of the Currency have already issued a variety of requests for comments and notices of proposed rulemaking pursuant to the Act.
The Administrative Procedure Act sets forth the specific steps and timeline that Federal agencies must follow when proposing regulations pursuant to Congressional action, but the proverbial devil always lurks in the details. Furthermore, citing the extensive rulemaking that will take place under Dodd-Frank, the SEC has implemented a ‘pre-rulemaking’ process for accepting public comments on a number of issues within the Act’s purview, and other agencies are undertaking similar actions to enhance public participation in the rulemaking process, beyond what is required by law. All of this means that a company with even a passing interest in how the regulations shake out will be best served by developing a comprehensive rulemaking agenda. Such an agenda should take into consideration not only the rulemaking agencies (and their three-pronged goal to promulgate practically-, legally-, and politically- sustainable regulations) but also the Congressional Committees and Members who will be responsible for overseeing agency activities under and compliance with Dodd-Frank. Companies that take this kind of proactive approach will have the best opportunity for ensuring a regulatory future that isn’t all rainy days and Mondays.
The critical litigation and enforcement risks financial institutions will face as a result of Dodd-Frank were the subject of a teleseminar presented this week by Tom Allen, Roy Arnold, Amy Greer, and Chris Rissetto. The seminar was the third in a month-long Reed Smith series on Financial Re-Regulation. The final teleseminar in the series, addressing Dodd-Frank’s expected impact on securitization and related aspects of capital markets, will take place on Tuesday, August 31 beginning at noon EDT.
