07/21/2011 - One year after President Obama signed the Dodd-Frank Act, more than 300 new rules for the financial sector are on the way. How banks and other interests go about shaping them is fairly straightforward, at least to start: Write a letter. Get in line to talk to the rule-makers.
Kai Ryssdal: The day it was signed a year ago, the Dodd-Frank bill was -- plus or minus -- 800 pages long. Plenty, a reasonable person would think, to regulate almost anything. Problem is, the thing had to get past Congress. So less, actually, was more. Because it didn't spell out all the specific regulations banks and financial firms would have to follow, Dodd-Frank actually got signed. But now the thing's even longer because the rules are very slowly being written.
We asked Marketplace's David Gura to explain how the sausage is made.
David Gura: For most of us, a cushion is something we sit on. For a bank, it's a bundle of money, kept in reserve. If the bank loses money on some crazy investment, that cushion allows it to pay its bills and it lets customers withdraw money as usual.
Simon Johnson is a professor at MIT. He used to be the chief economist of the International Monetary Fund. He says the financial crisis showed us the big banks' cushions weren't big enough.
Charles Taylor, who directs the Pew Financial Reform Project, was a lot more helpful. He told me each regulator started by posting a draft version of the rule online late last year.
Charles Taylor: Industry, academic and other interested parties provide comments on the intent and the form of the rule, and then it's revised.
That's an open invitation to banks, lobbyists and private citizens -- to write in and comment on the proposal. The rule attracted 16 letters. That's about average for a rule that's not a hot-button consumer issue.
Read the full transcript and listen to the taped interview.
Pew is no longer active in this line of work, but for more information, visit the main Pew Financial Reform page.