Jul 21, 2015 - 3:00pm

Dodd-Frank’s First Five Years, in Five Charts


Senior Director, Strategic Communications

Dodd Frank

Dodd & Frank
Dodd-Frank was signed into law on July 21, 2010. Photographer: Andrew Harrer/Bloomberg

Happy 5th birthday, Dodd-Frank.

On second thought, “happy” is a strong word. In fact, when you dive into the numbers, you realize that these first five years under the financial regulatory reform law have been anything but happy for many banks and businesses, and they have been tough on the U.S. economy.

Here are five charts that illustrate the impact of Dodd-Frank five years in:

Ninety percent of banks responding to a study by the Mercatus Center at George Mason University said that their regulatory compliance costs have increased since Dodd-Frank was implemented, compared to only 5.8 percent who have seen their costs decrease. Researchers also pointed out that four in five bank executives said Dodd-Frank was more burdensome than the Bank Secrecy Act, which they note was a “notoriously onerous regulatory regime.”

While the cost associated rules has fallen over the past couple years, Dodd-Frank compliance is still taking a toll on the American economy, to the tune of more than $5 billion. American Action Forum, which produced the chart above, noted that, “given the pace of rulemaking, expect new regulatory burdens to easily extend into years six and seven.”

While all financial institutions are feeling the pain of this increasingly complex regulatory regime, small banks have arguably been hit the hardest. Created with FDIC data, the chart above shows that the ranks of small banks – which have historically been the primary source of funding for small and mid-sized businesses – have dwindled since the passage of Dodd-Frank.

So, who comes out ahead under this new regulatory regime? For one, the new Consumer Financial Protection Bureau, which has seen its payroll balloon from fewer than 200 employees back in 2011 to nearly 2,000 expected this year, according to this chart compiled by American Action Forum. That’s a whopping ten-fold increase in regulators at one agency in four years.

It’s not merely CFPB that’s adding regulators hand over foot, though. Also compiled by American Action Forum, the graph above shows that virtually every federal regulatory agency has seen at least a 15 percent uptick in employment since the financial regulatory overhaul.

The common thread running through each of the charts above is that Dodd-Frank isn’t working for the American economy. However, the law isn’t going anywhere, and continuing to push for repeal would be time wasted. Instead, it’s time to turn our attention to fixing what isn’t working, adding important provisions that were left out, and cultivating a smarter, more manageable regulatory regime for our all-important financial services sector.

That way, birthdays six, seven and so on might be a little more happy.

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About the Author

About the Author

J.D. Harrison
Senior Director, Strategic Communications

J.D. Harrison is the senior director for strategic communications at the U.S. Chamber of Commerce.