The Center for Public Integrity

A daily round-up of analyses and news related to the Dodd-Frank financial reform law.

Transatlantic cooperation – The United States must not delay or weaken financial regulations mandated by the Dodd-Frank law, a top European Union official warned on Friday.

The European Commissioner for Internal Market and Services, Michel Barnier, said that in fact, the EU and Washington need to coordinate aggressive efforts to meet Basel III banking standards in a timely manner to even the global market playing field and avoid a race to the bottom. “Equality and reciprocity are not only justified. They are also necessary,” Barnier said in a prepared speech delivered at the Brookings Institute.

Dodd-Frank delays – The Dodd-Frank Act may never provide the sweeping reforms it promised, if lobbyists and regulators continue to stymie some if its most critical elements, ProPublica reported.

Dodd-Frank requires some 387 regulations to be written by 20 different regulatory agencies, but the tedious rule-making process has pits regulator against regulator and allows Wall Street lobbyists room to step in and haggle for compromises. If U.S. regulators fail to carry out rules to rein in proprietary trading, credit rating agencies, derivatives, and resolution authority for failing institutions, could increase the chances of another financial crisis, it reported.

Bank debt rating – Three major U.S. banks face an increase in borrowing costs as Moody’s Investor Service reviews a potential downgrade of their debt ratings.

A daily round-up of news analyses and stories related to the Dodd-Frank financial reform law

Mortgage risk rules – Banking regulators' proposed risk retention rule for mortgage-backed securities have made unlikely allies of civil rights groups and banking lobbyists, who say that the tighter lending standards would deny working-class and minority Americans access to home loans, The New York Times reports. 

Regulators have proposed requiring sellers of mortgage-backed securities to keep at least 5 percent of the loans on their books, except for less-risky mortgages in which the home buyer makes a 20 percent down payment. One unnamed agency lawyer referred to the coalition of consumer and banking groups as "the unholy alliance."

June 10 is the deadline for public comments on the proposed rule, which is posted here.

Thursday is the deadline to offer suggestions on the Securities and Exchange Commission's plan to require publicly-traded companies to disclose possible conflicts of interest for board members and for consultants hired to set top executives' pay.

The SEC proposal has been applauded by pro-investor groups who worry that compensation consultants may be tempted to recommend higher pay packages for executives as a way to win other kinds of business from a company.

Under the proposal, every member of a company's compensation committee would be required to be an independent member of the board of directors. When the plan was announced in March, SEC Commissioner Luis Aguilar said he supported it but questioned whether the rule might prompt some companies to dissolve their compensation committees and assign another board group to set pay issues.

"If various companies don’t have compensation committees, it could harm both shareholders and companies," Aguilar said. "Shareholders would have the additional burden of continually monitoring how a particular company is making compensation decisions. And companies complying with the rules may find themselves at a competitive disadvantage. Neither of these results is appropriate but they are a possibility under the proposal."

Other Congressional hearings, rulemaking deadlines and events related to the Dodd-Frank financial reform law this week:

Monday, May 16