Source & Video: finance.yahoo.com

Former Federal Reserve Chairman Paul A. Volcker has announced he’s taking on the public’s eroding faith in government with a new foundation called the Volcker Alliance. He’s set to address an audience today in New York on the challenges facing regulatory reform, including how slowly Washington has moved on putting Dodd-Frank financial reform into effect.

Remember Dodd-Frank? That was the huge reform effort signed into law nearly three years ago to prevent a repeat of the 2008 financial crisis.

But according to CFTC Commissioner Bart Chilton, barely a third of the rules have been written to actually implement the law.

"Much of Dodd-Frank is dying on the vine,” Chilton writes in an email exchange with The Daily Ticker. "Lobbying, litigation and lawmakers who have tried to defund and defang Dodd-Frank have all brought rule-writing to a crawl. Regulators themselves have become overly concerned about finalizing rules. Over-analysis paralysis, fears of litigation risks, and the lack of people-power have all contributed to the slowdown."

He describes the so-called Volcker Rule – a key aspect of Dodd-Frank meant to keep big taxpayer-backed banks from speculating – as “apparently dead in the water.”

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The potential headwinds that Chilton names aside, you have some big banks involved in literally writing bills to soften the impact of the reform on their business.

The New York Times recently reported Citigroup’s (C) input was reflected in more than 70 lines of an 85-line bill that sailed through the House Financial Services Committee this month. The bill would exempt broad swathes of derivatives trades from new regulation. Two key paragraphs, according to the Times, prepared by Citigroup together with other Wall Street banks, were copied almost word for word.

In the accompanying video, former Special Inspector General of the Treasury’s TARP bank bailouts, Neil Barofksy, explains why this behavior doesn’t surprise him at all.

“There’s nothing particularly new about big banks – and there’s nothing particularly new about Citi – being involved in drafting legislation that goes to the very heart of its business, that’s deregulatory,” says Barofsky, author of Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street. “It’s only surprising in that we don’t learn from our mistakes and history just repeats itself.”

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Barofksy goes on to discuss whether or not Washington has become friendlier to Wall Street as the memory of the financial crisis starts to fade and the economy gets stronger, and why we seem to be seeing a rise in big bank “brashness.”