Inquirer Editorial: We need all of Dodd-Frank

It's time to proceed full speed ahead with reforms in the banking industry that stalled amid the possibility that someone with less commitment to them might replace President Obama.

Only about a third of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act has been implemented. Betting that Obama would lose the election, financial institutions have been delaying the writing of new rules needed to comply with the law by having their friends in Congress continually ask for more time to study the potential impact.

It's time for the foot-dragging to stop. The nation can't afford a repeat of the unbridled debt spree that was enabled by years of deregulation. Mortgage companies and banks burned a path to the recession by selling loans to people they knew couldn't afford them. Blame the borrowers, too, but put up safeguards that prevent greedy lenders from taking advantage of people's dreams.

Some mortgage brokers tricked customers into buying mortgages with ballooning interest rates while others forged borrowers' credit histories to sell the loans. When borrowers inevitably defaulted, mortgage companies kicked them out of their homes. In many instances, lenders used inadequate and sometimes forged foreclosure documents.

Four and a half million families lost their homes. Not only were they harmed, but their neighbors' were hurt when their home values plunged, causing an unprecedented loss of individual wealth. Communities still scrambling to make up for the resulting lost tax revenue have laid off police and teachers and cut other services.

More debris hit the fan. Lenders packaged the unpayable mortgages into investment instruments that imploded, costing individual and institutional investors, including pension funds, banks, and insurance companies, a fortune they will never recoup.

Dodd-Frank will protect consumers from unfair lending practices not only by mortgage companies, but by credit-card companies and others. The law and other rules will bar institutions from gambling on risky investment products that go belly up.

If you think that's a bad idea, look at how Bank of America is struggling with shady loans it inherited from Countrywide Mortgage.

Safely reelected, Obama must show more backbone than he did when he allowed the financial industry's water carriers to intimidate him into withdrawing the appointment of Elizabeth Warren to head the newly created Consumer Financial Protection Bureau, which was her brainchild.

At least he gained a legislative ally in Warren, who Tuesday won her election in Massachusetts for a Senate seat. Senate Majority Leader Harry Reid needs to give her a banking committee slot, where she can help keep the administration on track.

As a Senate candidate, Warren provided the Democratic Party with a penetrating message, eloquently arguing that with the deck stacked against the middle class, government must stick up for average people.

Obama knows that. Now it's time for him to push financial reform forward.