The American Bankers Association was strongly opposed to Democratic Wall Street reform before the law passed. But now that the government has begun to implement Dodd-Frank, the ABA says that it would be majorly disruptive to repeal the entire law, as most Republicans want to do.
“It’s in the implementation phase—the operation has begun. Once you start operating on a patient, you don’t say, ‘You know, we’ve changed our mind, close him up,’” says Wayne Abernathy, ABA’s executive vice-president for financial institutions policy and regulatory affairs.
“In fact, the biggest changes under Dodd-Frank have yet to be completely written, much less implemented, as the agencies slated to do so are behind schedule. So interest groups have been actively pushing to shape derivatives regulations, the Volcker rule and other major pieces of the law: as of August, the ABA spent $4.6 million on lobbying to do so.
That said, the ABA also believes that fully implementing Dodd-Frank as written would be a bad outcome—even worse than repealing it outright. “If you’re trying to compare with repeal Dodd-Frank or let it be fully implemented, there would be less disruption if you fully repeal it,” Abernathy concludes. But on the whole, the ABA seems to be preparing for a future in which an altered version of Dodd-Frank exists.
And despite the full-throated call for repeal from the GOP’s 2012 presidential contenders, Republicans in Congress have focused most recently on watering down, not overturning the legislation. In doing so, they’ve signaled a quietly emerging bipartisan consensus that the government does have some role in regulating the financial markets. Rep. Barney Frank noted as much Wednesday, in light of a new House bill to modify the new derivatives regulations. “I’m pleased that we’re not debating whether it’s important to bring transparency to this market,” Frank told the members of the House Financial Services Committee. “We all agree that we do not want to have another AIG.”