Starving Dodd-Frank One Dollar At a Time

In a report from The Hill, the flow of funds that support enforcing the Dodd-Frank Act might be reduced to a drip-drip-drip. The House Appropriations Committee released its 2013 Agriculture and Financial Services budget today and the numbers reveal that President Obama's hallmark Dodd-Frank banking reform law may be starved of necessary funding.

As Erik Wasson reports:

The Financial Services bill contains a provision which would make the new Consumer Financial Protection Bureau (CFPB) subject to the appropriations process starting in fiscal year 2014 rather that allowing it to receive money from the Federal Reserve.

"This will allow for increased accountability and transparency of the agency's activities and use of tax dollars. The legislation also requires quarterly reports on CFPB's activities and spending, and allows Congress to review any funding transfers the agency receives from the Federal Reserve," a summary of the bill states.

While "increased accountability" and "transparency" sound good, Democrats are having none of it. They accuse the GOP lawmakers of strangling of the necessary funds to make Dodd-Frank a tough and viable form of regulation.

As Rep. Norm Dicks (D-Wash.), Appropriations Committee Ranking Member, puts it, "After reneging on the bipartisan Budget Control Act, Republican leadership decided to reserve the very worst austerity for the last few discretionary appropriations bills. We are now beginning to see the harsh details of Ryan Budget austerity for domestic priorities in FY2013."

The Dodd-Frank Act is set to celebrate its second birthday next month but the financial services industry is still pushing back against the law with banks complaining that they are still trying to sort out the rules as politicians aim to overturn the law if they win in November. A lack of funds to enforce Dodd-Frank could render the wide-ranging law effectively moot.

Stay tuned.