Overnight Regulation


Happy Thursday from Capitol Hill, where it’s currently a crisp 82 degrees (#PolarVortex), and welcome to the latest edition of OVERNIGHT REGULATION, The Hill’s daily rundown of all the day’s top regulatory and enforcement news. Not yet a subscriber? Sign up here to get the newsletter delivered to your inbox: http://bit.ly/1pc6tau

Now, let’s talk about regs.



{mosads}GROWING PAIN? Approaching the fourth anniversary of the Dodd-Frank financial reform law on July 21, groups from across the political spectrum are weighing in on the landmark law’s progress.

The federal government’s response to the 2008 economic crisis required financial regulators to draw up hundreds of rules to tamp down on risky and predatory practices seen as helping drag the nation into the Great Recession.

But the steady stream of rules pouring out of the Treasury, SEC, CFTC, FDIC and other agencies have met with criticism, both from industry groups, advocates and lawmakers on both sides of the aisle.

In short, no one seems satisfied with Dodd-Frank’s implementation, and groups on all sides of the debate are using the law’s anniversary as an opportunity to shape public perception of the law’s legacy so far.

Drilling down on the debate:

— During a speech this week, Rep. Jeb Hensarling, chairman of the House Financial Services Committee and a vehement critic of the law, argued that the bill’s proponents have pressed a false narrative in support of overzealous regulation.

“In their version of history, an alchemy of Wall Street greed, outsized risk and massive Washington de-regulation almost blew up the planet,” he said.  This necessitated massive taxpayer bailouts and a functional occupation of our capital markets.”

— According to the law firm Davis Polk, which has chronicled the rulemaking under Dodd-Frank since its inception, just over half of the nearly 400 rules required by the law have been finalized.

— A report from the conservative-leaning American Action Forum found tens of billions worth of compliance costs associated with the new rules and tens of millions of hours worth of paperwork burdens stemming from the law.

— Proponents of stricter regulations, meanwhile, can point to various signs of economic growth, as well as new polling commissioned by the left leaning group Better Markets, showing that most Americans believe the government should do more to rein in Wall Street. http://j.mp/1mSyEso



The House and the Senate are shutting it down for the week, lawmakers scramble Thursday night to the airports on their way to home states and districts.

President Obama looks to be holing up at the White House Friday, where he’s scheduled to take meetings.

But fret not, federal agencies remain open for business and will continue to grind out rules in accordance with the laws of the land.



Government agencies will publish 221 new regulations, proposed rules, notices and other administrative actions in Friday’s edition of the Federal Register.

Highlights include:

-The U.S. Department of Agriculture (USDA) will withdraw a GMO disclosure rule.

The USDA’s Animal and Plant Health Inspection Service (APHIS) has decided not to share information about genetically engineered organisms with state regulators, because it could comprise farmers’ confidential business information.

“We have decided to withdraw the proposed rule to ensure that our ability to protect confidential business information from disclosure is maintained,” the USDA wrote. http://j.mp/1nBFjSW

-The USDA may lift longstanding import restrictions on fresh apples from China. The agency is paving the way for Chinese apples to be sold in the U.S., despite identifying 21 harmful pests that could infect crops here. http://j.mp/1ruBOTB

-The Education Department will move forward with plans to help young adults who suffer from psychiatric problems find jobs and homes. http://j.mp/1p12Qkm

-The Food and Drug Administration (FDA) may issue new recommendations that would encourage pharmaceutical companies to electronically submit their postmarketing safety reports about vaccines they manufacture for human use. http://j.mp/1pfBCFb

-The Bureau of Alcohol and Tobacco Tax and Trade will establish two new viticultural areas for winemakers on the west coast and in the southeast. The bureau designates viticultural areas around the country so winemakers can describe where their wine comes from on wine labels and in advertisements. http://j.mp/1qLokkV



MALAYSIA AIR PROBE: Back in April, the Federal Aviation Administration (FAA) warned U.S. airlines not to fly over the area of Ukraine occupied by Russian military forces, where a Malaysian Airlines plane was downed on Thursday, The Hill’s Keith Laing reports. http://j.mp/1pfm709

ON THE MOVE : The Environmental Protection Agency’s No. 2 regulator will leave the agency to join an energy and climate advocacy group. Bob Perciasepe, deputy administrator of the EPA, plans to resign next month, The Hill’s Tim Cama reports. http://j.mp/UdFJYF

SURVEY SAYS: Four years after the Dodd-Frank financial reform law was signed, most people believe regulators should do more to rein in Wall Street, a new poll finds. http://j.mp/1mSyEso

PAYDAY LOANS: Congressional Democrats are targeting payday lenders with new legislation that would cap the fees they are allowed to charge low-income customers for short-term loans. http://j.mp/1qLyRfY

DRONING ON: The FAA is investigating whether Rep. Sean Patrick Maloney (D-N.Y.) violated the agency’s rules by using a drone to capture a video of his wedding last month. Maloney sits on the House Transportation and Infrastructure Committee. http://j.mp/1qi9SVL

NET NEUTRALITY: The Federal Communications Commission has received more than 1 million comments on the agency’s plan to issue new regulations for Internet service providers, The Hill’s Julian Hattem reports. http://j.mp/1qiTNPN

DISPUTE RESOLUTION: A Wall Street watchdog is looking to make changes to the way it handles disputes between financial services providers and their investors, Reuters reports. http://j.mp/1kApDzz

BUCKYBALLS: Federal regulators are recalling potentially dangerous magnetic toys known as Buckyballs, ending a two-year regulatory fight with the manufacturer, Reuters reported Thursday. Children who swallowed Buckyballs faced health risks, because the magnetic connection could pinch intestines. http://j.mp/UdCjFp

MUTUAL FUNDS GET A CLOSER LOOK: Starting next year, the Securities and Exchange Commission (SEC) plans to step up enforcement actions against mutual fund brokers that break the rules, Reuters reports.http://j.mp/1l9tdkc

SOCIAL MEDIA STOCK: Bloomberg is publishing a list of risky social media stocks to avoid, following comments made by Fed Chairwoman Janet Yellen that asserted the industry is overvalued on Wall Street. http://j.mp/1sux9nh

BITCOIN REGS: Wall Street firms and tech companies looking to use the popular virtual currency Bitcoin could face new rules from New York state, in an early attempt by regulators to get a grasp on the burgeoning industry, the Associated Press reports. http://j.mp/1wBbast



398: The total number of regulations required by Dodd-Frank, according to Davis Polk.

208: The number, as of July 1, that have been finalized, according to the firm.

$21.8 billion: Total compliance costs linked to the rules, according to AAF.

60.7 million: Number of paper work hours required by the rules, the group estimates.

62: Percentage of stockholders who believe the “market is rigged for insiders and people who know how to manipulate the system,” according to the Better Markets Poll.

60: Percentage of likely voters who favor stronger regulations, according to the survey.



“With all due respect to its authors and admirers, Dodd-Frank stands as a monument to the arrogance and hubris of man in that its answer to incomprehensible complexity is yet more incomprehensible complexity,” – Hensarling on the Dodd-Frank’s anniversary.  


We’ll endeavor to stay on top of these and other stories throughout the week, so check The Hill’s Regulation page early and often for the latest. And send any comments, complaints or regulatory news tips our way, via bgoad@thehill.com or tdevaney@thehill.com. And follow us at @ben_goad and @timdevaney.

Tags Commodity Futures Trading Commission Dodd–Frank Wall Street Reform and Consumer Protection Act U.S. Securities and Exchange Commission

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