Dodd-Frank turns 3, but slew of rules are still unwritten

It took two years from the time Wall Street's credit binge crippled the entire financial system to pass a law whose aim was to regulate more closely the banks that nearly brought down the economy.

President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law on July 21, 2010. Fast forward three years later, and the alphabet soup of regulators collaborating to write some 400 new industry rules are just 39 percent done.

That marathon may soon become a sprint.

(Read more: Dodd-Frank? More like Dud-Frank for lots of folks)

As a fresh round of debates over banking regulation has surfaced, Treasury Secretary Jack Lew is pounding the table—and the pavement—to get it fully and finally implemented.

"By the end of this year, the core elements of the Dodd-Frank Act will be substantially in place," Lew told the audience at CNBC's Delivering Alpha conference last week.

(Read more: Lew: Dodd-Frank helped save the banking system)

The task ahead would seem daunting: Roughly 243 rules outlined in Dodd-Frank's 3,200 pages have yet to be written, including some of the cornerstone regulations. Not to mention the bill's original Democratic sponsors—Sen. Chris Dodd and Rep. Barney Frank—have retired.

(Read more: Glass-Steagall not useful, says Frank)

Regulators first tackled the low-hanging fruit.

In year one, they created the Consumer Financial Protection Bureau—a new agency that has since collected $425 million in damages from financial institutions for predatory practices toward consumers. Regulators also laid the groundwork for new rules around incentive-based compensation and best practices for credit rating agencies. They formalized the process for stressing bank balance sheets, too.

From the middle of 2011 until mid-2012, Washington wrote rules to erase conflicts in securitizing assets, after Goldman Sachs packaged and sold troubled mortgages to investors while a client was betting against the same package. Big banks submitted their first "living wills" that would serve as guideposts to liquidate a bank instead of bail it out the next time a crisis rolls around.

Dodd-Frank's third year has been, by most measures, its most productive. A new set of rules requires banks to hold extra capital on hand commensurate to the size and risk of its balance sheet. A spate of nonbank institutions like GE Capital and American International Group have been denoted as systemically important to the financial system, thus, needing more capital.

And if that weren't enough, a rule was finalized that disqualifies convicted felons from selling securities.

It appears the stickiest subjects have been saved for last, and unfortunately also require the closest coordination.

The Volcker Rule, named after former Federal Reserve Chairman Paul Volcker, is still up in the air, even though it was central to the law's goal (to limit risky trading for banks taking customer deposits) and its inclusion in the law is controversial. The Treasury Department is leading the charge, but aligns its proposal with the views of four other agencies.

Seven agencies must be in agreement on regulation concerning the derivatives and swaps market, still in mid-stages. The Commodities Futures Trading Commission has put proposals forth for the majority of the rules it was tasked with writing—like forcing derivatives to be cleared on a regulated exchange, among other proposals yet to be finalized.

Finally, a unique proposal called "Skin in the Game" veers from the rest of the bill in that it adds risk to bank balance sheets. The set of rules would require any financial institution packaging a securitized asset to maintain at least 5 percent of the exposure, so that it is not simply offloading troubled assets onto others with no skin in the game. Some seven regulators are working to finalize that rule, which was one of the first proposed—and now last to be completed. In an interview Monday on CNBC, Frank said this facet will be the key to getting banks to stop issuing toxic assets to others.

Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., says Dodd-Frank will work, but needs to be written in a way that doesn't detract from the economy in its haste.

"These are all things that need to be done in a deliberate fashion," Hoenig said in an interview with CNBC. These final regulations "need to be finished up here so that we can have more confidence, I think, in our financial system in general."

It's easy for "deliberate" measures to appear snail-like when as many government agencies are involved. For the remaining three policy baskets mentioned, up to eight regulators will need to get on the same page.

The banks have the most at stake, and they've been clogging the regulators' calendars, too. Since July 2010, the six biggest U.S. financial institutions have met with federal agencies over Dodd-Frank more than 1,000 times, according to research by the Sunlight Foundation. Goldman Sachs and JPMorgan have led the way, with each holding more than 200 meetings with the CFTC, Fed, and Treasury alone.

According to Lee Drutman, a senior fellow at the foundation, the volume of meetings demonstrates how diligently the banks are working to help shape rules that will vastly impact them. He also posits that it's one of the reasons rule making has been sluggish. "As the Dodd-Frank law passes its third anniversary, lagging on deadlines, and increasingly defanged, the meetings log data offer a compelling reason why: the banks have overwhelmed the regulators," Drutman wrote in a recent research report.

Nonetheless, Frank is still optimistic on the law he so vigorously pushed for, and is proud of what it has accomplished. On CNBC's "Closing Bell," he honed in especially on what he says are strides Dodd-Frank has made in tackling the idea of "too big to fail" and creating plans for liquidating banks instead of bailing them out in the case of another financial crisis.

"Look at every bailout that was done ... in 2008 and see if they could be done today," he said. "The fact is our law makes illegal, impossible every one of the bailouts that happened in 2008."

—By CNBC's Kayla Tausche and Amara Omeokwe. Follow Tausche on Twitter: @KaylaTausche. Follow Omeokwe on Twitter: @Amara_Omeokwe.