REAL STORIES
BY REAL PEOPLE Search
Wednesday, December 13, 2017

The Devil and the Details

by JJFCPA (editor), McLean, Virginia, July 26, 2010

The new financial reform bill will require over 550 new rules made by 12 separate regulatory agencies. The impact of the law will not be known for months.

When President Obama signed the new financial services reform legislation, there were rounds of applause by the Democratic politicians and broad smiles on their faces. Two who stood out were Senator Christopher Dodd and Congressman Barney Frank who led the effort to get the law enacted. According to press reports in the media, including the Wall Street Journal, it was their late night last minute negotiations that reconciled the difference between the House and Senate versions of the bill. Similar to Obamacare, which also passed earlier in the year, the law passes the huge effort of writing regulations to the bureaucrats. This time the task is gargantuan and will leave many affected businesses in limbo until they know what the new rules will be. This will take months and maybe years.

The last major piece of financial regulatory change was the Sarbanes Oxley legislation, which transformed the rules affecting public corporations and implemented a new and very expensive regimen of compliance for companies. The law mandated that companies develop, document and have audited their financial internal control processes and procedures. The big change was the audit requirement which was a bonanza for the Big 4 accounting firms. The cost of these audits doubled the fees paid to the Big 4 firms. This cost eventually flows down to consumers and taxpayers.

The recently enacted financial services regulatory reform legislation requires some 533 regulations to be written by 12 separate regulatory bodies. In comparison, Sarbanes-Oxley required 16 rulemakings by regulators. The difference is staggering and a major move toward the expansion of government into private enterprise. This is another example of a trend or of the policy position of the current administration to enact legislation in massive gulps even when the effects are not clearly understood. There will be plenty of opportunities for consultants and lobbyists to feast on the fees that they will earn by advising clients and trying to shape the rules to the benefits of their constituents. At some point in the future, companies will know what the new rules are and what the financial consequences are. Until then, there will be uncertainty which will affect the economy and the job market. This is not a good situation for the unemployed.



About the Writer

JJFCPA is an editor for BrooWaha. For more information, visit the writer's website.
Want to write articles too? Sign up & become a writer!

3 comments on The Devil and the Details

Log In To Vote   Score: 2
By JJFCPA on July 27, 2010 at 02:36 pm

Hey Dean - SOX is still the law. You are in my company with the losses in your 401k. Many of us feel that the problem was not lack of rules and regs but instead lackluster enforcement. Similar to the problem with the Gulf oil spill. BTW, Republican Gomorrah is well written albeit I disagree with the heavy bias.

 Report abuse

Log In To Vote   Score: 0
By JJFCPA on July 27, 2010 at 02:59 pm

It is weird. A friend told me about it and said I should read it. I started and then had to skim it just to say that I completed it. I gave it to my wife and asked if she would write a book review on it (that I could use). No answer yet.

 Report abuse

Log In To Vote   Score: 1
By Libdrone on August 12, 2010 at 09:56 am

@Dean

"thirteen foot demon"

Have you met my mother?

(g, & r)

 Report abuse



Add A Comment!

Click here to signup or login.


Rate This Article


Your vote matters to us



x


x