Industry, Legislators And Administration Clash Over Dodd-Frank Implementation

He vowed that the administration will "move forward…quickly, carefully and responsibly."

Moreover, Wolin said, the administration "will continue to oppose efforts to slow down, weaken or repeal these essential reforms."

But in a statement responding to Wolin's comments, Bachus voiced support for delay.

"All of us know that on the highway 'speed kills,'" Bachus said. "Speed can also kill jobs when Washington rushes sweeping regulations into place without giving the public adequate time to comment."

He said the comment period for Dodd-Frank rules has sometimes been barely 30 days. "At the current breakneck pace, it is difficult for individual firms—especially small businesses—and the public at large to meaningfully participate and offer their insights and observations."

He added, "The implementation of the massive Dodd-Frank Act may be daunting for regulators, it may be intimidating for them, but that's no excuse to limit the public's participation and abandon sound rulemaking practices."

Bachus and Rep. Scott Garrett (R-N.J.), chairman of the House FSC's Capital Markets Subcommittee, are among co-sponsors of legislation that was recently introduced to delay implementation of the derivatives provisions of Dodd-Frank for 18 months. Currently, the rules must be in place by July.

Garrett argues that Dodd-Frank "set up a totally unrealistic and unworkable timeline for the implementation of a massive and bifurcated new regulatory regime to oversee the U.S. OTC derivatives markets."

"If the regulators get this wrong, it will be difficult—if not impossible—for businesses of all shapes and sizes to responsibly hedge their risks, and trading will be forced off of U.S. markets to those overseas," Garrett says.

In his comments, Wolin says Dodd-Frank provides a mandate to coordinate across agencies and instill joint accountability for the strength of the financial system.

"Already, we have worked through the FSOC [Financial Stability Oversight Council] to develop an integrated road map for implementation, to coordinate an unprecedented six-agency proposal on risk retention, and to develop unanimous support for recommendations on implementing the Volcker Rule," Wolin says.

At the same time, amid insurance-industry pressure, Wolin says announcement of the Obama administration's selection of the independent FSOC member with insurance expertise is "imminent."

Industry officials believe the independent member with insurance experience will be named in advance of a Senate Banking Committee hearing on the issue scheduled for May 12. It is unclear who is being considered for the post, but some industry lobbyists say they believe the leading candidate is Roy Woodall, who stepped down in January as an industry consultant and is a former state regulator.

The insurance industry's key concern is that the FSOC will move too hastily to implement rules that will be used to determine whether a nonbank financial company should be supervised by the Federal Reserve Board.

The industry wants a proposed rule setting the criteria the FSOC will consider in determining whether an insurer should be subject to enhanced, i.e. federal regulation, as well as the process the agency will use in making such a determination.

In its current form, the proposed rule lacks sufficient detail to achieve either of these objectives. The "framework" that is described in the preamble to the proposed rule does not appear in the rule itself. Nor does the framework provide any insight into what may constitute a threat to the financial stability of the United States.