The Senate Banking Committee, chaired by the retiring Sen. Tim Johnson, D-S.D., recently held the latest in its periodic hearings on the state of financial regulation and implementation of the Dodd-Frank Act, which this writer refers to as "limplementation."

The formal title for the hearing was "Wall Street Reform: Assessing and Enhancing the Financial Regulatory System." These hearings are often revealing as to the issues on which senators are trying to pressure regulators on behalf of clients and constituents, and this was no exception.

The star of the hearing, hands down, was Sen. Bob Corker, R-Tenn., whom this writer sometimes lampoons about his languishing proposal to reform the housing finance system. Corker seems to relish being a star, and on this occasion he earned it by taking on a crucial issue in Dodd-Frank, exposing both subtle and glaring issues, placing the Federal Reserve witness on the defensive, prompting two other senators to make supportive statements and laying the groundwork for either another strong showing next year or some sort of unseemly retreat, to be determined . . . developing.

The issue is the implementation of Titles I and II of the Dodd-Frank Act, which respectively require the "too big to fail" banks to prepare so-called "living wills," which would set forth steps the banks would take to simplify their operations to an extent that would render them no longer a threat to the stability of the financial system and enable them to be resolved through a bankruptcy-like process so that the authorities could say "with a straight face" that they are no longer too big to fail.

This writer has been cynical from the outset as to the likelihood that Dodd-Frank would even be implemented, pronouncing the legislation "dead before arrival" and predicting that the so-called implementation process would become a process of piecemeal exemption as has occurred with all of the other landmark bills that were supposed to ensure that a financial crisis would "never happen again." Recently the FDIC and the Federal Reserve sent joint letters to the 11 largest banks that identified shortcomings in their living wills and warned them that if they didn't make "substantial progress" in correcting these faults by July 1, 2015, the regulators could order them to take specific steps to simplify their operations.

Corker pointedly asked Fed Governor Dan Tarullo why after joining the FDIC in admonishing the too big to fail banks, he sent a separate communication that appeared to "back away" and "water down" the joint position. Tarullo acknowledged a "difference" between the agencies' views and said that while the FDIC made a finding of non-credibility, the Fed "felt it was important to go through another stage of the iterative process." He insisted that the process would still be completed by next July and they will be prepared to enforce the law if the banks fall short again.

FDIC Chairman Martin Gruenberg asserted that the agencies "agree on the substance" and will be prepared to follow through if the banks don't comply as expected.

Sen. Mark Warner, D-Va., who also worked on the resolution provisions of Dodd-Frank, added his voice to Corker's and warned that if the Financial Stability Oversight Council doesn't act, he will question whether too big to fail has really ended, and he urged, "Let's speed this up and bring it to a conclusion."

Sen. Elizabeth Warren, D-Mass., charged that six years after the 2008 episode, the living wills "don't cut it," and the largest banks remain too big to fail. She elicited from Tarullo and Gruenberg a commitment to use their agencies' enforcement tools, but she seemed skeptical that they won't find a way to say that the banks have made "significant progress," and the game will drag on.

(Archived video and witness statements can be found here.)