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A year after President Obama signed it with great fanfare, the Dodd-Frank Wall Street Reform and Consumer Protection Act “remains a source of anxiety and frustration,” said Joan Quigley in The Bond Buyer. Municipal-bond issuers and buyers are no clearer than they were a year ago on how provisions in the 2,319-page bill will remake their market. They are hardly alone, said Alexander Eichler in HuffingtonPostâ€‹.com. A report this week by Standard & Poor’s suggested that one of the bill’s chief provisions, which lays out the rules for how troubled banks could be liquidated in an orderly way instead of bailed out by the government, “might not work in all cases.” The new report only strengthened fears that the new law would fall short of its goal to “prevent too-big-to-fail scenarios” like the ones that triggered the bailouts of the nation’s biggest banks in 2008.
The abiding confusion over Dodd-Frank stems in large part from politicians’ fawning eagerness to “please a paying audience,” said Dan Janison in Newsday—namely, Wall Street. Last month, for instance, New York’s two Democratic senators, and much of its congressional delegation, warned federal officials that Dodd-Frank’s provisions to regulate sales of financial derivatives would “give U.S. banks a competitive disadvantage.” It’s hardly remarkable that they would come to the defense of jobs on Wall Street, of course. But there’s some irony in the Democrats’ willingness to work “in tandem with what you might call the financial deregulation community.”
They’re just part of a massive pile-on, said Gary Rivlin in Newsweek. Most of Dodd-Frank’s 300 or so provisions “are under attack by a number of foes, from bankers to check-cashing companies to free-market Republicans.” And little wonder. As written last year, the law restrains banks’ ability to package lousy mortgages together, and creates a new consumer protection agency that will be “poking into their business” in bothersome ways. That’s why we’re seeing JPMorgan Chase and Goldman Sachs, for instance, each spending more than half of the millions they received in government bailout money on lobbying in Washington against tighter regulations. Maybe one day, Dodd-Frank will prove good for Americans, most of whom support the law. “But so far it’s been a boon mostly for D.C.’s lobbyists and the campaign coffers of many Republicans.” We can’t let special interests gut the law, said Jacquie Germany in The Washington Post. They are out to preserve a status quo that cost Americans millions of jobs, billions in bailouts, and trillions “in pensions, home values, and retirement savings.”
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