Financial regulators meet Obama

Yesterday, President Barack Obama met lead independent financial regulators.

According to a White House statement, the President and the financial regulators discussed the considerable progress that had been made to strengthen America’s financial system and protect consumers “including the ongoing implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.”

In order to make sure the Great Recession never happens again, the President emphasized the need to promptly implement the remaining portions of the Wall Street Reform.

Regulators have been slow at completing the post-financial crisis rules. Experts say that agency disagreements, budget limitations, legal challenges and industry lobbying have slowed them down.

The Wall Street Journal quoted law firm Davis Polk & Wardwell LLP, which informed that only “38.9% of the rules required by the 2010 Dodd-Frank financial law—many of which were supposed to be in place by July 2012—were finished by July 1, more than 60% of the law’s deadlines for rules have been missed.”

During the meeting the President and the financial regulators discussed the housing market. They agreed that a more simplified and certain housing finance system is needed – one that better serves middle-income households.

The White House press release added:

“Protecting consumers is and has been a priority for the President since day one. He understands that in order to build a strong and secure middle class, we need a stable financial system and common sense protections for families across the nation.”

Be responsive to new risks

The financial sector is not a static world, it is a constantly evolving environment. It is important that financial regulators, institutions and government remain responsive to new risks in the financial system.

In the meeting the participants also discussed opportunities to continue interagency coordination, including through the Financial Stability Oversight Council, chaired by Secretary Lew.

The regulators discussed with the President the challenges posed by the current budget environment to their efforts in fortifying the financial system and protecting consumers.

The regulators said it is vital that independent regulatory agencies receive adequate funding so that they can properly carry out their core missions.