Dodd-Frank requires bank and credit union regulators to work with the Securities and Exchange Commission and Federal Housing Finance Agency on incentive-based compensation standards, which have yet to be implemented following the issuance of a draft proposal in 2011. The agencies have signaled they will repurpose standards before yearend.
“This is a subject ripe for conclusion in the fall,” said Cliff Stanford, chair of Alston & Bird’s Bank Regulatory Group. “Frankly, I think the market would welcome that. It would be helpful for the market [for the compensation rule] and other provisions in the law that have been kind of hanging out there, to get resolved to bring certainty and clarity.”
Stanford said regulators are shifting away from the rulemaking phase of Dodd-Frank implementation to refining regulations that are now being enforced.
“The phase we’re in now is much more about how we live with these rules now, and what are the unanticipated consequences or unresolved questions that weren’t set forth in the rules,” he said. “Rules can be changed, rules can be amended, examiners can deliver messages. Those things will continue to happen.”