The battle over financial industry reforms began in Congress two years ago, then moved into regulatory agencies writing rules to carry out the Dodd-Frank law. Next stop: Federal court.
The U.S. Chamber of Commerce and the Futures Industry Associaton are among the business groups considering potential lawsuits to challenge specific Dodd-Frank regulations, the Wall Street Journal reports. Advocates of litigation also point to a major victory last week when a federal appeals court overturned a Securities and Exchange Commission rule giving shareholders more power to remove corporate directors.
"Suing a regulator is an expensive and slow process. It's not something we do gleefully," David Hirschmann, head of the Chamber's Center for Capital Markets Competitiveness, told the newspaper.
What are the most likely litigation targets?
The SEC's new program and generous bounty to encourage corporate whistleblowers to report suspected misconduct is widely opposed by business groups. Other concerns center on the set of regulations still being developed by the SEC and the Commodity Futures Trading Commission to police derivatives trading, and requirements for companies to report the pay ratio of the chief executive versus an average employee.
In general, a federal regulation cannot be challenged in a U.S. appeals court until the rule has been finalized by an agency.
Credit history & remittances - The Consumer Financial Protection Bureau is studying whether data on electronic money transfers, or remittances, can be used to help construct credit scores for people who rely on them, reports The New York Times .
Most credit histories don’t contain data on how remittances may predict a consumer’s ability to repay loans, so people who rely on these products may lack credit scores and be barred from accessing loans.
The CFPB is assembling a database of information from a large remittance provider as well as credit score information from a credit bureau. According to a preliminary report from the bureau, “A finding that consumers who send remittance transfers are more likely to repay their debts than other consumers with similar credit histories could suggest that adding remittance data to credit scores would tend to raise credit scores relating to remittance senders.”
The Daily Show – “The Daily Show with Jon Stewart” on Thursday night featured a musical performance by the Dodd-Frank law. Say what?
Correspondent John Oliver took to the stage dressed as a tattered, smudged, rolled-up paper copy of the law with tire tread marks, and declared, "Yeah, I've taken a few shots but I'm still standing."
After trying to explain the year-old Dodd-Frank law in song, he abruptly halted, complaining that only 38 out of 400 mandated regulations have been completed because of lobbysts' influence. “Here’s what’s going down: this whole financial reform thing is a sham! … I’m no law, Jon. I’m just an undefined, impotent 2,300 page piece of legislative s***!”Reprinted by Permission © 2013, The Center for Public Integrity®. All Rights Reserved.