Five years may have passed, but partisan warfare over the Dodd-Frank financial reform law showed little sign of abating Tuesday.
The five-year anniversary of the Wall Street overhaul saw high-ranking lawmakers from both parties offer their opinions on the financial regulatory package, and the perspectives could not have been more different.
Democrats hailed the law as providing critical protections to everyday Americans hurt badly by the last financial crisis, while taking steps to prevent the next one, while Republicans declared the law a catastrophe, and sowing the seeds for a future round of bank bailouts.
In the House, Democrats opened the day by issuing a new report detailing the law’s “indelible impact on our financial markets.” The paper from Rep. Maxine Waters (D-Calif.) and other members of the House Financial Services Committee detailed what parts of Dodd-Frank have been implemented. It also criticized Republicans for trying to undermine the law via legislation, budget cuts to regulators, and legal challenges.
Hours later, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) opened his thoughts on the law by declaring, “There are those on the left who have abandoned all pretense to truth.”
His verdict on the law?
“Our society is now less stable, less prosperous, and less free,” he said in remarks at the American Enterprise Institute.
The debate looked largely similar in the Senate. Democrats, including several members of Senate leadership, held a press conference heaping praise on Dodd-Frank, while vowing to resist any attempts to curb its reach by the GOP.
“We’re here today with a simple message for those who would try to weaken or undermine Dodd-Frank. As we like to say in Brooklyn, forget about it,” said Sen. Chuck SchumerChuck SchumerPricing methane and carbon emissions will help US meet the climate moment Democratic senator: Methane fee could be 'in jeopardy' Manchin jokes on party affiliation: 'I don't know where in the hell I belong' MORE (D-N.Y.). “They’re going to find Senate Democrats standing arm in arm against them.”
Not to be outdone, Senate Banking Committee Chairman Richard Shelby (R-Ala.) delivered his own remarks at The Heritage Foundation. There, he criticized Dodd-Frank, saying it had “fallen far short” of its goal of making the financial system safer, while heaping new rules on struggling community banks and other small financial institutions.
And the feud went beyond mere rhetoric. Republicans commemorated the law’s birthday by offering several bills to fundamentally alter it. Sen. Ted CruzRafael (Ted) Edward CruzSenate confirms four Biden ambassadors after delay Overnight Health Care — Presented by Carequest — Colin Powell's death highlights risks for immunocompromised The Senate confirmation process is broken — Senate Democrats can fix it MORE (R-Texas) joined with Rep. John Ratcliffe (R-Texas) to offer a bill that would abolish the Consumer Financial Protection Bureau, created by Dodd-Frank and first thought up by Sen. Elizabeth WarrenElizabeth WarrenSenate Democrats propose corporate minimum tax for spending package The Hill's Morning Report - Presented by Facebook - Budget negotiators: 72 hours and counting Democrats face critical 72 hours MORE (D-Mass.).
Sen. John CornynJohn CornynBipartisan lawmakers target judges' stock trading with new bill Cornyn raises more than M for Senate GOP Is the Biden administration afraid of trade? MORE (R-Texas), the second-ranking Republican in the Senate, offered his own bill that would erase a Dodd-Frank provision allowing regulators to step in and wind down an ailing financial institution with a temporary use of government funds. Instead, Cornyn’s bill would direct banks to go through a new bankruptcy process designed specifically for big banks.
While not specifically about Dodd-Frank, Hensarling also announced his panel’s plans to consider legislation that would alter how the Federal Reserve does business. The committee will debate a pair of bills Wednesday, one of which that would require the Fed to adhere to a specific policy rule in setting monetary policy, and conduct cost-benefit analysis in writing new bank rules among other provisions. The second would establish a commission to study the overall role of the Fed in the nation’s economy and financial markets, and recommend possible changes to its operations.
Meanwhile, bipartisan attempts to revisit the sweeping law have been few and far between. House Republicans have advanced several bills altering Dodd-Frank, but the White House has regularly threatened to veto the measures.
In the Senate, an attempt to craft a bipartisan package of financial reforms fell apart, as Shelby’s panel ended up passing a regulatory bill down a party-line vote.
The inability to act comes as even the law’s biggest backers admit something so broad is sure to be revisited at some point.
“We never suggested we wrote the Ten Commandments here,” said former Sen. Chris Dodd (D-Conn.) who was in the Senate Tuesday to commemorate the anniversary. “This is a bill, a complicated bill.”
Sen. Sherrod BrownSherrod Campbell BrownWhen the Fed plays follow the leader, it steers us all toward inflation Which proposals will survive in the Democrats' spending plan? Senate Democrats call for diversity among new Federal Reserve Bank presidents MORE (D-Ohio) said Tuesday that conversations about common ground are still ongoing, saying there are “lots of informal discussions” between the two parties.
But with the two parties so widely split on the overall impact of Dodd-Frank, finding areas where they agree on a path forward is a significant challenge.
“As long as Republican leadership wants to see major surgery…we won’t come to an agreement,” said Brown.