House Republicans give Dodd-Frank failing grade

Co-sponsors of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Sen. Christopher Dodd (L) and Rep. Barney Frank, wait for President Barack Obama to sign it into law at the Ronald Reagan Building in Washington, July 21, 2010.

WASHINGTON (Reuters) - A group of congressional Republicans harshly criticized the Wall Street overhaul law on Friday and gave what they termed a failing report card to the year-old legislation.

The legislative debate on the Dodd-Frank financial oversight law was a heated partisan process as the Obama administration proposed stricter regulations for banks, hedge funds, derivatives traders and other financial market players.

Nearly one year after its enactment, Dodd-Frank remains an easy target for Republicans.

"Dodd-Frank burdens the private sector," Representative Spencer Bachus, the Alabama Republican who heads the Financial Services Committee, said in a news conference. "The vast majority of these rules have created an atmosphere of uncertainty in which innovators, job creators, and lenders can't put their ideas and capital to work."

Using a visual aid of an oversized report card and large red pen, the group of lawmakers from the House committee emblazoned failing grades to Dodd-Frank's legislative goals.

They said it was an expansion of government authority that resulted in increased unemployment and continued weakness in the housing market.

"What a difference a year makes, huh? Setting the United States on the collision course for economic mediocrity and a prolonged period of high unemployment," said Representative Scott Garrett, a New Jersey Republican.

The Obama administration has defended Dodd-Frank, saying the United States needed to fix a financial system that failed horribly, leading to catastrophic results for individuals, small businesses and the financial services sector fighting reforms.

Most of the reforms are not yet in place because regulators are behind schedule in writing hundreds of new rules.

The group of Republican lawmakers argued on Friday the nearly 400 federal rules mandated by Dodd-Frank will cost nearly $1.25 billion to carry out.

They also said the law was unable to end the perception that some banks are "too big to fail" and would be bailed out by the government if they become insolvent.

"The backstop of the federal government still exists for these large institutions," said Rep. Shelley Moore Capito, a West Virginia Republican. "What we've got here is a situation where the taxpayers are still on the hook."

House Republicans have spent the past year trying to repeal or scale back numerous Dodd-Frank measures. They have so far largely failed in the face of a Democrat-controlled Senate and President Barack Obama's veto pen.

(Reporting by Margaret Chadbourn; Editing by Padraic Cassidy)