The Act imposed 398 new regulations that have thus far added more than $21.8 billion in costs and 60.7 million paperwork burden hours. These measures have transformed the financial industry, overhauled mortgage lending, and directly affected the availability of credit. With roughly one-quarter of the law still left to implement, it’s safe to say that the true economic impacts won’t be understood for years.The report notes that the largest cost increases related to Dodd-Frank have occurred during the past two years. The report estimates that the swap data recordkeeping requirement of Dodd-Frank alone cost $3.6 billion, requiring over 445,000 paperwork hours. Furthermore, the Volcker Rule cost $4.3 billion, requiring an additional 2,392,000 paperwork hours.
These are the most visible burdens, however, since many independent agencies have extensive discretion to implement Dodd-Frank, there is little independent review of their cost estimates, and in many instances, agencies simply forgo the monetization of costs. For example, when the Federal Reserve required large banks to submit capital plans under Dodd-Frank, it quantified the number of hours required (more than 432,000), but failed to monetize this cost. If they used the figure for a typical regulatory compliance officer ($32.10 per hour), the cost of regulation eclipses $13.8 million.The report also discusses the impact on availability and cost of credit, noting that “many of the regulations promulgated under Dodd-Frank, intended to create a safer financial system, have had adverse effects, burdensome costs, and consequences beyond the financial services industry on small businesses and consumers.”
Read the full report.