The Dodd-Frank Act is likely to result in nearly $27 billion in new private-sector fees, assessments and premiums, CBO Director Douglas Elmendorf said yesterday at a House Oversight and Investigations Subcommittee hearing.
The CBO report detailed the 2011-2020 costs of implementing Dodd-Frank, which included $5.9 billion for the Consumer Financial Protection Bureau (CFPB) and $900 million for the Financial Stability Oversight Council (FSOC) and Office of Financial Research (OFR).
“All told, CBO estimated, establishing the CFPB, FSOC, and OFR would, on net, increase budget deficits by $6.3 billion over the 10-year period.”
Costs of FDIC Changes
CBO said changes to the FDIC made through Dodd-Frank “will require an increase in premiums paid by depository institutions.” The Dodd-Frank Act’s increase of the deposit insurance limit to $250,000 will cost banks and credit unions $9 billion through 2020. Additionally, the increase in the size of the FDIC’s deposit insurance fund to a new minimum of 1.35% will cost a further $6 billion.
“That represents a deadweight loss to the economy, in the form of foregone income that could have been used by the private sector to fund investment in capital equipment, research and development, job creation or start-up funds for the next great American company,” Subcommittee Chairman Randy Neugebauer (R-Texas) said. “Instead, the funds will be used to significantly expand the federal government's footprint.”
In related news, House Financial Services Committee Republicans also released a brief video highlighting concerns of the Dodd-Frank Act, including "2,600 new bureaucrats" and "over 300 regulations."
See the CBO report.