Regulators Likely to Miss Yearend Deadline for Key Regs
by Donna Borak
The banking agencies are likely to miss a yearend target to issue several critical rules required by the Dodd-Frank Act, according to several sources familiar with the matter. Since the beginning of the year, top regulatory officials have expressed optimism that they would largely wrap up critical aspects of the financial reform law by Dec. 31, describing it as the “beginning of the end.” But sources said the banking agencies are not planning to issue any last minute rules ahead of Dec. 31, and instead plan to wait until early next year. A spokeswoman for the Federal Reserve declined to comment. What’s left on regulators’ checklist included a proposal to impose a capital surcharge on eight of the largest U.S. financial institutions, including JPMorgan Chase & Co. (JPM), Citigroup Inc. (NYSE: C), and Bank of New York Mellon (BK), as well as a finalized package of rules, which implement Sections 165 and 166 of Dodd-Frank, which are considered by many as the core of the financial reform law. (Certain aspects of those sections, like stress testing, have been finalized, but not in their entirety.) Observers argue that by continuing to repeatedly push off deadlines, it would undermine the credibility of the 2010 Dodd-Frank framework, left unfinished years later – a concern held by the Obama administration. Karen Shaw Petrou, a managing partner at Federal Financial Analytics Inc., said regulators are “running out of time” and need to move “fast and quick” to complete the rulemaking process as speedily as possible.