The Dodd-Frank financial overhaul’s most passionate defenders will leave the executive branch tomorrow and some of its loudest critics will grab the levers of power, the Wall Street Journal. The question is no longer how far the law’s impact will ripple across the economy, but how much of it will be dismantled. Dodd-Frank’s backers have accomplished much of what they set out to do since President Barack Obama signed the law in July 2010. A new consumer finance agency is policing products from mortgages to credit cards. The ability of big banks to make bets and borrow money has been restricted. Opaque derivatives transactions now move through regulated clearinghouses. The government says that taxpayers won’t be on the hook again if a huge financial firm fails, though its new plans and legal authorities are untested. Most major rules required by Dodd-Frank are complete, with notable exceptions such as restrictions on what the law’s backers see as excessive Wall Street compensation. For every five rules Dodd-Frank mandated, about four have been drafted or finalized, according to the most recent estimate from the law firm Davis Polk & Wardwell LLP, which has been tracking the law’s implementation. Whether all those changes are benefiting the economy or holding it back remains a matter of substantial debate — one that will begin in earnest once Donald Trump is sworn in as president on Friday. The law has unquestionably imposed higher costs on the financial sector, but policy makers disagree about whether those costs were worth it in the name of making the system less susceptible to another meltdown.
