* Financial regulators update senators on Dodd-Frank efforts
* Lawmakers ask about how mortgage rules will work together
By Sarah N. Lynch and Douwe Miedema
WASHINGTON, Feb 14 U.S. lawmakers pressed
financial regulators on Thursday on their efforts to crack down
on Wall Street after the 2007-2009 financial crisis, which a new
government report said may have cost the U.S. economy more than
Top regulators lined up for the hearing before the Senate
Banking Committee to explain their plans for 2013 and update
lawmakers on their progress writing a raft of new rules aimed at
preventing another meltdown.
Committee Chairman Tim Johnson, a Democrat from South
Dakota, said the Government Accountability Office put together
the cost estimate at his request. He pressed the regulators to
move forward with efforts to make the financial system more
"I urge you to consider the benefits of avoiding another
costly, devastating crisis as you continue implementing Wall
Street reform," he said.
Regulators have been scrambling to write dozens of new rules
required by the Dodd-Frank oversight law, which Congress passed
in 2010 in response to the crisis.
Lawmakers now want to know where regulators stand on writing
controversial new reforms such as the Volcker rule, which
prevents banks from making risky speculative bets with their own
money. Regulators are months behind on releasing the rule.
They also want regulators to explain how various rules, such
as a series of new mortgage regulations, will work together and
whether the agencies are considering the impact of new capital
requirements and other rules on small banks.
Mike Crapo of Idaho, the committee's top Republican, said
regulators need to give more information on how new rules for
the over-the-counter swaps market would apply overseas.
"There is a bipartisan concern that some of the Dodd-Frank
rules go too far and need to be fixed," he said.
Republicans also questioned regulators on whether the dozens
of new rules they are writing would restrict consumers' access
to credit. They are particularly concerned about a number of new
mortgage rules from the Consumer Financial Protection Bureau and
One of the fiercest debates in recent weeks has surrounded
the consumer bureau, created in Dodd-Frank to help protect
Americans from financial scams.
Senate Republicans have refused to confirm President Barack
Obama's choice to lead the bureau unless the White House agrees
to change its structure. Democrats say the agency is working
well and that changes would weaken it.
Richard Cordray, who has led the CFPB on a temporary basis
for a year and who was recently nominated for a full term at the
helm, appeared at the hearing on Thursday.
"Director Cordray and the CFPB have worked tirelessly to
finalize many rules and policies to protect consumers in areas
such as mortgages, student lending, servicemembers' rights and
credit cards," Johnson said.
"He has done good work, and I urge my colleagues to confirm
Director Cordray to a full term without delay and allow the CFPB
to continue its important work protecting consumers."
Outside the hearing room, a group of protesters wearing red
shirts passed out fliers claiming the bureau has not done enough
to help homeowners.
In their opening statements, the regulators discussed issues
such as winding down massive failed banks and requests for more
funds to carry out the new authorities.
Federal Deposit Insurance Corp Chairman Martin Gruenberg,
Federal Reserve Governor Daniel Tarullo, Commodity Futures
Trading Commission Chairman Gary Gensler, Securities and
Exchange Commission Chairman Elisse Walter and Mary Miller, the
Treasury Department's undersecretary for domestic finance, also
appeared at the hearing.