As Dodd-Frank ends its third year of seemingly never-ending implementation, it’s a good time to tote up its hits and misses.
Our sister publication American Banker has compiled a report card of sorts, showing that this many-armed creature is well started, but nowhere near finished, total implementation.
Of 398 rulemaking requirements, here’s how Dodd-Frank is doing to date:
• 155 finalized rules.
• 64 missed deadlines, no proposals released.
• 111 missed deadlines, with proposals released.
• 63 future deadlines, no proposals released.
• 5 future deadlines, with proposals released.
If having less than half of the final rules implemented three years later seems a dismal result, the truth is, it’s not bad for government work.
And there are probably many in the lending community who are rooting for the slowest possible implementations.
The truth is, the mortgage industry is still on probation for the part it played in triggering America’s Great Recession and helping cause economies to tremble around the world.
It’s probably not necessary to repeat the litany of fee-based lending and buck-passing up the line into mortgage-backed securities mysteriously rerated top of the line, repeated until the whole thing went bust. But that’s what happened.
While there has been a great deal of squawking from the industry over this massive reregulation, it would better be considered a dose of vile-tasting cod liver oil administered by the government.
There has never been a time in recent memory that the mortgage business has been crippled by excessive regulation.
It won’t happen this time either, though it will crimp the style a little.
Regulation is the price the industry pays for the many supports the federal government provides to the mortgage business as a matter of public policy followed by both Democratic and Republican administrations.
If the mortgage business can demonstrate careful and prudent lending policies respectful of borrowers’ ability to repay, the regulatory burden will ease.
The business will no longer be grounded and sent to its room by an angry federal parent.
Until then, let’s hope the mortgage interest rate doesn’t rise too much!