The American Bankers Association today shared several possible reforms for the Dodd-Frank Act as the law approaches the 15th anniversary of its enactment, saying changes are needed to mitigate its burdens on banks of all sizes.
The Dodd-Frank Act became law in July 2010. In recognition of that fact, the House Financial Services Committee held a hearing on “lessons learned” since the creation of the law and its possible future. Committee Chairman French Hill (R-Ark.) was critical of Dodd-Frank, saying the law led to regulatory burdens that shifted banking activities into the nonbanking sector, created an “unaccountable” Consumer Financial Protection Bureau, and prioritized duplicative compliance and regulation by enforcement over consumer protection.
“Dodd-Frank was sold to the American people as a sweeping fix to prevent another crisis, yet over time it’s become clear that this approach has not delivered as promised for Main Street,” Hill said.
In a statement submitted ahead of the hearing, ABA said it was time to reform the Dodd-Frank Act. “Like any other major law developed during a time of crisis, certain elements can become overly restrictive and outdated, and it’s critical for Congress to enact common-sense reforms where the DFA has resulted in harm to the banking industry or customer interests,” the association said.
ABA recommended several bills that would revise the CFPB’s structure and funding, including creating a Senate-confirmed, bipartisan commission to govern the bureau. ABA also recommended replacing the CFPB’s small-business lending data collection rule, repealing the Durbin Amendment on debit card interchange fees and regularly indexing regulatory thresholds for inflation.
“It is time for Congress to review and adjust the law to better reflect the current economic and financial environment, and ABA and our member banks look forward to working with you and your colleagues in Congress to achieve this goal,” the association said.
