Reform bill passes Congress with mixed reviews

After nearly a year of deliberations, the Senate finally garnered the necessary 60 votes to send the financial reform bill to the White House for final approval. The Dodd-Frank Wall Street Reform and Consumer Protection Act, or HR 4173 (.pdf), passed the Senate with a vote of 60 to 39 on July 15. As the bill awaits President Obama's signature, it is receiving some mixed reviews.

Jamie Dimon (Jamie Dimon news), CEO of JPMorgan Chase (NYSE: JPM), expressed his concerns in a recent conference call. "[M]any challenges and uncertainties remain which may result in unintended consequences for our clients, the markets and our businesses," he said.

"Increased focus is critical in order to implement these reforms in a way that protects consumers and the competitiveness of the U.S. financial system, while ensuring the flow of safe and sound credit," he warned.

Tim Ryan, CEO of the Securities Industry and Financial Markets Association (SIFMA) echoed Dimon's sentiments, calling the bill's impact on American businesses and consumers "the great unknown." According to Ryan, the impact won't be seen for at least 18 to 24 months, he told CNBC (video). The uncertainty stems from the size of the bill, which contains more than 250 specific rules.

"The sheer numbers and organizational efforts to putting out roles and looking at responses are complicated," explained Ryan. Yet the SIFMA leader maintained some optimism: "My bottom line is, I doubt people who are decent customers will be unserved."

Fundtech CMO George Ravich, lacking confidence in the newly passed legislation, said it will restrict capital and proprietary trading. That "means less profits for banks and another hit to liquidity to corporates as well," he told the Association for Financial Professionals.

However, the President of Barclays and CEO of Corporate and Investment Banking and Wealth Management, Robert Diamond, insisted that banks support the reform bill. "Strong banks want strong regulation," he said at the Financial Reform, Economic Growth and the International Dialogue forum.

"We certainly do not want to go through a similar crisis again. No taxpayer money should ever be put at risk again so it is in everyone's interests that we have a safe and sound financial system," Diamond added.

Now that the bill has passed, all that remains is the daunting task of deciding how to implement the new rules and regulations. And as FierceFinance has noted, some of the most important directives, like the Volcker Rule, won't take effect for several years. Congress and the financial services industry still have a lot of work to do.

For more:
- watch the CNBC video
- see Ravich's comments to the Association for Financial Professionals
- see Diamond's comments to the Financial Reform, Economic Growth and the International Dialogue forum

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