Final Count: FinReg Orders 68 New Studies
CNN has done the hard work of parsing the Dodd-Frank financial regulatory reform bill, and has found that the final version calls for a whopping 68 studies — more than twice the number of previous estimates.
Instead of toughening up ethical and marketing standards for financial planners, Congress studies the issue in the financial overhaul bill. Instead of making it easier to sue lawyers, accountants and bankers who help commit securities fraud, Congress studies the issue. The bill also studies, among other things: short selling, reverse mortgages, improved insurance regulation, private student loans, oversight of carbon markets and the “feasibility of requiring use of standardized algorithmic descriptions for financial derivatives.”
In many cases, the government-mandated studies make sense: Washington wants to analyze exotic financial instruments before regulating them, which is certainly better than Washington rushing a loophole-addled or half-baked provision into the bill. In the case of Fannie Mae and Freddie Mac, too, the government has little incentive to act quickly given the complexity of the regulatory challenge and the tenuous stability of the enormous housing market. But the CNN article gets at why in many cases the studies are problematic: The bill includes them because lobbyists managed to kill hard-and-fast regulations. And ordering a study gives lobbyists and businesses more opportunities to wear down legislators and regulators.