Not long after a Senate subcommittee found that JPMorgan had misled and bullied federal regulators in an effort to conceal massive trading losses, the House of Representatives began to consider bills that would actually make it harder for Washington to prevent another such debacle. Deceptively described as “technical fixes” to the 2010 Dodd-Frank financial-reform law, the bills have both Republican and Democratic backers. They are impeccably bipartisan gifts to Wall Street, which, for its part, has been reliably bipartisan with its congressional campaign donations. So far, neither the White House nor the Treasury Department has taken an active role in opposing these bills, which threaten to undermine one of the most important legislative achievements of President Barack Obama’s first term.

One of the bills, cosponsored by Rep. Jim Himes (D-Conn.) and Sean Patrick Maloney (D-N.Y.), would weaken a key provision of Dodd-Frank by allowing federally insured banks to continue trading risky derivatives rather than moving such transactions into separate uninsured affiliates. Himes, who was a vice president at Goldman Sachs before entering politics, is the national finance chairman for the Democratic Congressional Campaign. In 2011 and 2012, his campaign committee received a total of $750,000 from the financial industry. Another bill, also sponsored by House Democrats, would exempt the foreign branches of U.S. banks from federal regulations unless federal regulators could prove that a host country’s rules were not comparably strict. Yet another bill would impose new Wall Street–friendly guidelines on the cost-benefit analyses that are required before any new rule can be adopted by the Commodity Futures Trading Commission (CFTC). These bills, along with others, would give banks rather than regulators the benefit of the doubt, and make it easier to challenge Dodd-Frank in the courts.

Not that it’s especially hard now. As Haley Sweetland Edwards has reported in the Washington Monthly, the financial industry has already succeeded in getting courts to throw out two important rules authorized by Dodd-Frank. Last September the U.S. Court for the District of Columbia Circuit ruled that the CFTC lacked a “clear and unambiguous mandate” to set position limits on commodities trading. In fact, Section 737 of Dodd-Frank mandates that the CFTC “shall by rule, regulation or order establish limits on the amount of positions, as appropriate.” That would seem pretty unambiguous to most English speakers, but the judges decided that in this case “as appropriate” meant only “if necessary,” and ruled that the CFTC had failed to demonstrate a necessity. A year before that, the U.S. Court of Appeals for the D.C. Circuit overturned Dodd-Frank’s “proxy access” rule, which would have helped shareholders elect their own candidates to corporate boards. (The lead counsel for the financial industry in both cases was Eugene Scalia, son of the Supreme Court justice. One wishes he had half as much respect for the ordinary meaning of statutory language as his father has for the text of the Constitution.)

Between its legal challenges and its lobbying efforts, both on Capitol Hill and in the offices of the rule-making agencies, Wall Street has managed to delay and dilute the most important regulatory reform since the Great Depression. It has been able to do this partly because both the press and the public seemed to lose interest in Dodd-Frank as soon as it was enacted. They may have assumed it was a done deal, but Dodd-Frank leaves a lot of details to be worked out by the agencies charged with implementing it. This has given the financial industry a second chance to gut the law before it takes effect. A plague of lobbyists, many of them former regulators, has descended on Washington to meet with rule-makers, overwhelm them with complaints and recommendations, and, if all else fails, intimidate them with the threat of lawsuits. This pressure, and the extreme caution it has inspired, is one reason that about two-thirds of Dodd-Frank’s more than four hundred rules still haven’t been finalized almost three years after its passage. So far, the financial industry has spent more than $1.5 billion on registered lobbyists—a lot of money, but nothing compared to what Wall Street stands to gain by neutering a few key provisions of the new law.

With Republicans in control of Congress, it will be difficult for the president to pass any new legislation as ambitious as Dodd-Frank. At least until the midterm elections in 2014, his main job may be to protect and fortify the still-fragile legacy of his first term. If he wants Dodd-Frank to be remembered as anything more than a symbolic gesture, he must put more pressure on lawmakers in his own party not to forget the most important lesson of the financial crisis: The country’s biggest banks cannot be trusted to police themselves. They’ll take any risk they’re allowed to, confident that Washington will always save them and the rest of us from their worst mistakes, as appropriate.

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