Regulators Left Out $2 BILLION In Dodd-Frank Costs
Regulators underestimated the cost of Dodd-Frank regulations by up to $2 billion, new research shows.
The financial regulation overhaul, including 400 new rules, has cost nearly $40 billion and 64 million paperwork burden hours, according to regulators. But they declined to estimate the cost of 51 of those rules, which researchers at the American Action Forum found will cost additional billions of dollars.
Those 51 rules will force businesses to complete an additional 35.8 million hours of paperwork. That’s 1.5 million days, or 4,092 years. It would take 17,922 people who specialize in regulatory compliance working full time an entire year to complete. And businesses would pay between $1.1 and $2.2 billion, depending on their salaries, which average about $30 an hour.
In addition to declining to count the cost of those 51 rules, regulators did not provide a benefit analysis for 95 percent of the entire Dodd-Frank Act.
“We certainly do try to carry out the cost-benefit analysis under our policy on rule making,” Doreen Eberly, director of risk management supervision at the Federal Deposit Insurance Corporation, testified before a Senate Banking Committee last week. “We consider the cost, the benefits and alternatives based on available data.”
But she said a required cost-benefit analysis of new rules or clarification of existing rules could “slow the process,” “limit our flexibility” and “open [the rules] to legal challenges.”
Other regulators testifying before the committee agreed. “The lack of clarity between the time a law is passed and the rule is developed can impose burdens on banks as well, because they aren’t sure how various requirements might be implemented,” said Maryann Hunter, deputy director of the Division of Banking Supervision and Regulation at the Federal Reserve’s Board of Governors.
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