The U.S. Chamber of Commerce (Chamber) is pleased to submit this statement for the record for the July 15th hearing of the House Financial Services Committee. The Chamber appreciates the Committee’s ongoing work to examine the effect that the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) has had on the capital markets and the broader American economy.
Dodd-Frank was passed in the wake of the 2008 financial crisis – an event that exposed serious flaws within the U.S. regulatory structure and which severely weakened investor and consumer confidence in the financial system. Congress had a generational opportunity to address some of the supervisory and regulatory shortcomings that directly contributed to the crisis and to ensure that the type of instability which built up across the financial system in the mid-2000s would never happen again.
Instead, Congress passed Dodd-Frank, a 2,300-page behemoth that contained hundreds of new regulatory mandates, many of which were completely unrelated to the causes of the crisis. Rather than equipping regulators to oversee modern financial markets, Dodd-Frank turned into a political wish list of policy priorities that have imposed great cost on the American economy but were not adequately calibrated towards making the financial system more stable or more competitive.
Passage of Dodd-Frank in July 2010 was in many ways just the beginning: the law mandates or authorizes regulators to implement some 400 new rules, in addition to requiring agencies to issue dozens of new studies or periodic reports. For fifteen years, the federal financial regulators have proposed or finalized thousands of pages of new, often far-reaching regulations – a process that has created a great deal of uncertainty for businesses and the financial markets.
By the law’s 5th anniversary, regulators had already proposed or finalized 307 new rules, spanning nearly 23,000 pages in the Federal Register.[1] Each one of these regulations presented novel questions for those affected by them, including over how to plan for changes that may be made between a proposed or final rule, or determining whether an agency will impose additional requirements that go beyond what is called for under the statute.
Read our full letter here.
[1] Dodd-Frank Turns 5. Davis Polk (July 2015) https://corpgov.law.harvard.edu/2015/07/30/dodd-frank-turns-5/
