Why Romney Won't Kill Dodd-Frank

Mitt Romney has pledged to repeal the Dodd-Frank act. That’s not really going to happen—and that’s just fine with Wall Street. Instead, President Romney would likely try to give the financial industry something it wants more: a diluted financial reform law that would relax restrictions on some of its most profitable—and riskiest—investments but maintain enough government oversight to give the banks cover. “There’s this perception that banks hate everything in Dodd-Frank, and that’s just not true,” says Mark Calabria, a former top Republican aide on the Senate Banking Committee who’s now a scholar at the libertarian Cato Institute. “From a bank’s perspective, you’d rather have piecemeal reform of Dodd-Frank, not only because there are things in the law you want to keep, but also because you’re going to have more control over the process.”

This is what congressional Republicans have in mind if Romney replaces Obama. “With Dodd-Frank, it’s not going to be repeal,” says Representative Scott Garrett of New Jersey, a senior Republican member on the House Financial Services Committee. “There might be repeals of sections, but there will be a piece-by-piece analysis. We’ll throw out some and reform others.”