The Dodd-Frank Act, signed into law in July 2010, spans 2,300 pages and directs federal regulators to burden job creators and the economy with more than 400 new rules and mandates. The Act was touted by its supporters as “Wall Street reform” and Washington’s response to the financial crisis of 2008. Yet, Dodd-Frank reaches far beyond Wall Street and does not address the real causes of the crisis. It did nothing to fix Fannie Mae and Freddie Mac and end their taxpayer-funded bailouts. In fact, the Dodd-Frank Act continues the bailouts by enshrining “too big to fail” into law, placing taxpayers at risk for trillions of dollars of future bailouts.
During Congress’s final negotiations over the Dodd-Frank Act, provisions were added to the bill with little debate and in many cases no hearings. But within days of the bill becoming law, the consequences of this lack of review and debate became evident. For example, the day after President Obama signed the bill into law, the asset-backed securitization market was forced to completely shut down due to one section of Dodd-Frank.
Under new leadership, the Committee began a thorough page-by-page review of Dodd-Frank in January 2011. Chairman Spencer Bachus announced the Committee would focus on identifying the new law’s many unintended consequences and propose legislation to fix provisions that threatened the creation of jobs.
The Committee has also looked extensively at the economic costs imposed by the Dodd-Frank Act, something Congress should have been done before the bill became law. Two independent, nonpartisan agencies – the Congressional Budget Office and the Government Accountability Office – reported to the Committee that the economy and taxpayers will bear an enormous cost for Dodd-Frank:
- $27 billion will be taken out of the economy because of Dodd-Frank;
- 2,600 new full-time Federal employees will need to be hired to implement the Act’s 400-plus regulatory mandates at a cost to taxpayers of $3 billion during just the first five years of implementation.
The Dodd-Frank Burden Tracker, the Committee’s online resource to keep track of these regulations, reports that 224 of the more than 400 regulations required by the Dodd-Frank Act have been issued so far. Businesses will have to spend more than 24 million hours each year to comply with the red tape from these first 224 rules. In comparison, it took less time – 20 million hours – for workers to build the Panama Canal.
The Committee’s oversight work related to the Dodd-Frank Act is detailed in the following documents:
BY THE NUMBERS: Overview of the Financial Services Committee’s Work on Dodd-Frank
- The Committee held 65 hearings on Dodd-Frank to identify the job destroying provisions of the Act and to prepare legislative solutions to fix the red tape that is a roadblock to our economic recovery.
- The Committee heard testimony related to Dodd-Frank from 370 witnesses from the public and private sectors.
- The Committee held hearings on 24 legislative initiatives to counteract the detrimental impact of Dodd-Frank.
- The Committee reported 18 bills to the House that would repeal, reform or fix Dodd-Frank provisions that harm the economy.
- The House passed 7 bills that would reverse Dodd-Frank regulations in order to increase certainty, end taxpayer bailouts, reduce exposure of the American taxpayer to unjust costs, promote job creation and enhance the safety and soundness of our financial system.