The Dodd-Frank Act is one the most significant pieces of legislation to ever impact the banking industry. Our lives would be much simpler if the law never happened, but the law did happen and we all have to deal with it. Instead of dealing with the law in a quick decisive manner Congress and the current administration have turned it into a political circus.
Dodd-Frank became law on July 21, 2010. The law contains hundreds of pages of requirements, which will be converted into thousands of pages of regulations. The law prescribes specific deadlines within which the regulations must be finished. The political circus is delaying the start of the process of issuing regulations, but the completion deadline is fixed. So every day of delay is reducing the time financial institutions will have to implement the thousands of pages of changes.
Among it’s many provisions the Dodd-Frank Act created the new Consumer Financial Protection Bureau. The law requires the nomination and confirmation of a single director to head the agency.
The initial nominee was Elizabeth Warren. Many in our industry and many in Congress painted her as evil personified. I had no personal knowledge of the nominee, but had a negative image of her based on the constant barrage of negative comments. But after watching the circus over the past 12 months I concluded, based on what she did, that she may have been the best thing to happen to banking in a long, long time. But now we have run her out of Washington. I think we may have shot ourselves in the foot.
The new nominee is Richard Cordrey, the former attorney general from the state of Ohio. Once again I have no personal knowledge of the nominee, but I am hearing negative things from those in the banking industry that apparently do have knowledge of the nominee.
Mr. Cordery’s confirmation hearing was scheduled to begin in early August, but Congress decided to take an early recess; I guess there wasn’t enough important business in Washington. The hearings finally began on September 6th.
The purpose of the hearing is for committee members to review the credentials of the nominee and to confirm or not confirm the nomination. In his opening statement one committee member told Mr. Cordrey that he appeared qualified for the position, but that unfortunately he was not going to be confirmed because the committee wants the CFPB to be headed by a committee rather than by one individual.
Committees are an effective way to bring diverse viewpoints to the table in order to find the best solution to a problem. But, if my house is on fire I don’t want a committee to argue over the best option for fighting the fire; I want one qualified individual to make a quick decision and immediately begin to fight the fire. If my house is to be destroyed by fire I would rather see firefighters giving their best effort to save it, than to see firefighters standing on the sidelines waiting for the committee to make a decision.
The delay tactics of the confirmation committee are putting us all in a precarious position. Every day of delay is compressing the time within which we will have to implement the mountain of regulations coming from Dodd-Frank. I am so disgusted watching the clowns running this circus that I can’t even enjoy the popcorn.