In passing laws, Congress focuses on policy outcomes and pays scant attention to the difficulties that administrative agencies will face in implementing the measures. Further, Congress frequently imposes deadlines for issuance of implementing rules that are impossible for the agencies to meet. The regulatory agencies charged with implementing the Dodd-Frank financial reform legislation are currently struggling with this problem. The statutory requirements for issuance on short notice of hundreds of rules has inundated their analytical and policy formulation staffs.
A new study by the Davis Polk law firm has revealed the problems the financial regulatory agencies face. In April 2011, the regulatory agencies were required to issue 26 rules to implement Dodd-Frank. They missed every deadline. The agencies broke down on what Davis Polk calls the "Comment Mountain"--the review by the policy making staffs of an avalanche of sophisticated comments, in order to determine the optimum method of regulation and to develop the optimum basis for defending the rule against anticipated legal challenges. The problem will only get worse.