The Dodd-Frank Financial Reform has become something of a political football throughout this presidential campaign. When I began putting together this paper, I had my research grounded in lobbying activity and confirmation proceedings, which are both pretty “inside the beltway” kinds of issues. However, as the campaign for the Republican nomination has unfolded in the last few months, I have had the chance to see what a Republican administration might mean for Dodd-Frank.
The GOP frontrunner, Mitt Romney, has been perhaps the most vocal critic of the legislation. While he initially offered ideas to reform the law, he now has called for its complete repeal. In describing Dodd-Frank, Romney has aggressively characterized it, along side the Affordable Care Act, as a crushing burden on American business and investors. Even in their critique of the law, it is commonly accepted that the American Banker’s Association does not favor absolute repeal. As Wayne Abernathy, a Bush-era Treasury Department appointee, said, “Its in the implementation phase. The Operation has begun. Once you’ve begun operating on a patient, you don’t say ‘you know, we’ve changed our minds. Close him up.’ “
I found this sort of rhetoric particularly striking because it represents how subtle and tactical considerations within the beltway become talking points in the national press. It will be fascinating, and revealing for our political process, if the republican nominee is ultimately elected to the presidency. A victory would create a conflict within the conservative ranks. On one side would be the banking lobby, who have invested heavily in the both the campaign of Governor Romney and their efforts to educate staff and comply with the law. On the other side would be the populist forces within the Republican Party that have responded so strongly to Romney’s promise to repeal and replace the law, therefore creating a new regulatory framework for the financial industry.
With eight months of campaigning left until the election, this is all highly speculative at this point. However, as I have come to learn more about the implementation of Dodd-Frank thus far, it has become clear that internal goals, lobbying pressure and public opinion all weigh heavily on the minds of policy-makers. Not only has this law been an illuminating portrait of American policy implementation, it will continue to be well into the future.