Here Come the Demolition Crews for Dodd-Frank

The headline for Peter Schroeder’s report at The Hill pretty much says it all: “Emboldened Wall Street ready to dismantle Dodd-Frank financial law.” Having pulled off the repeal of one nettlesome and arguably central feature of Dodd-Frank, the “firewall” against public responsibility for derivatives swaps, financial sector lobbyists are looking for their next targets:

Fresh off a victory in the government funding debate that liberals decried as a giveaway to Wall Street, advocates for the financial sector aim to pursue additional changes to Dodd-Frank that they say would lighten burdens created by the 2010 law. Among the top items on the wish list: easing new requirements on mortgages, loosening restrictions on financial derivatives and overhauling the Consumer Financial Protection Bureau.

If you want an inventory of all the plans Wall Street has for dismantling Dodd-Frank via legislative and regulatory channels as well as the courts, the best guide is still Haley Sweetland Edwards’ piece in the March-April 2013 issue of the Washington Monthly. The open question is whether the furor over the Cromnibus language, which very nearly unraveled the whole deal, is the harbinger of a backlash against additional outrages in the near future, which might even reunite most Democrats (including the Obama administration) in defense of Dodd-Frank–since the opportunity for must-pass legislation in which to nestle toxic little amendments has now declined–with some prospect of tactical alliances with anti-bailout conservatives.

One senior financial industry executive said the dust-up over the funding bill has forced the industry to recalibrate its lobbying priorities for the coming year. Given Warren’s megaphone, the executive said, getting through the next Congress without new restrictions on large banks would constitute a win.

Well, maybe these birds are afraid of Warren, but I doubt they will declare any sort of truce without a few more high-profile fights. It would be a good time for the president to drop a broad hint that the veto pen is out for any further legislative measures to mess with Dodd-Frank. If he doesn’t, then the self-fulfilling prophecy of lame-duck irrelevance will surround him sooner rather than later.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.