1,243,859 Hours Lost Complying with Dodd-Frank
By Gloria Taylor
$1.7 Billion. That’s how much the latest 9 rules stemming from Dodd-Frank will cost according to the American Action Forum. If the sheer waste of dollars isn’t enough, these rules alone have also sent 1,243,859 hours down the drain, wasted away on paperwork. Again, only nine rules. Dodd-Frank in its entirety is estimated to have cost $36 billion along with 73 million of hours diverted from productivity to compliance.
Businesses could be hiring new employees and banks providing more loans, but instead they are stuck hiring compliance officers or filling out paperwork. Dodd-Frank is one of the reasons community banks have been hung out to dry, small business can’t access they capital they need, and the U.S. has experienced the slowest economic recovery since WWII.
Regulatory costs alone don’t capture all the havoc Dodd-Frank wreaks. At the heart of Dodd-Frank’s paternalistic approach is the assumption that deregulation led to the financial crisis. Heritage Foundation scholar Norbert Michel explains that there was no reduction in financial regulations prior to the crisis. If anything federal policy caused the meltdown. Affordable housing goals that failed to measurably increase home ownership created the perfect storm for lower lending standards filling markets with high-risk mortgages. Cue the crisis.
The institutions that helped create the crisis, Fannie Mae and Freddie Mac, were bailed out while small business and consumers, left in the wake of endless, misguided regulations, are now saddled with higher prices and less choice.
President-elect Trump and his nominee for Secretary of the Treasury expressed a willingness to tackle the problem and Congress has plenty of tools to deal with Dodd-Frank. Under the Congressional Review Act (CRA), Congress can one by one halt the implementation of the latest 9 costly rules to prevent any last minute damage from the Obama administration. On top of that, the House has recently voted to expand the power of CRA to block multiple rules at once as opposed to one at a time.
Not only can new rules be blocked, but Rep. Jeb Hensarling (R-TX) has already laid the groundwork to repeal Dodd-Frank through the Financial Choice Act. Now with a unified Republican government, the Choice Act can serve as a good model of what Congress can accomplish to take back power from unaccountable agencies, reduce regulations, and empower consumers to make their own decisions. Dodd-Frank has caused too much harm to the financial sector and crippled businesses and the housing market. No more excuses from Congress. Stop any more rule making and repeal Dodd-Frank.