September 2012To: Fast Facts List
Fast Facts: ECONOMIC IMPACT OF DODD-FRANK
Since 2010, the Financial Services Roundtable has been tracking reports and public statements about theeconomic impact of the Dodd-Frank Act and Basel III. The Roundtable currently has over 150 independent costestimates hosted in a public database on the Roundtable’s website. Additionally, the Roundtable published a
white paper about the economic impact of Dodd-Frank last fall.
Independent studies from the last nine months include:
The Dodd-Frank Act could reduce pretax earnings for the eight large, complex banks by a total of $22billion to $34 billion annually--higher than our prior estimate of $19.5 billion to $26 billion.
The Dodd-Frank Act already has imposed $14.2 billion in direct compliance costs since its passage andwill require 25,679 full-time employees to file 51.2 million hours of paperwork annually.
September 21, 2012.
No longer can the average consumer open a free checking account. Due to ever-increasing compliancerequirements under Dodd-Frank, most banks elected to pass these costs along to the consumer byeliminating free checking.
July 13, 2012.
Since the adoption of Dodd-Frank, the uncertainty associated with complying with new and differentcapital requirements has made many U.S. banks more reluctant to invest in potential securitizations.This has substantially decreased the liquidity of the securitization market, impacting both the availabilityand cost of the sources of consumer and business credit.
July 10, 2012
<Risk retention rules> would decrease loan origination volume from current levels. Almost 62% of those respondents said that volume decreases would be more than 50%. All respondents indicated thatthe cost of liquidity to borrowers would increase – over 92% said the cost increase would be 50 basispoints or more; 46% indicated that the cost increase would be more than 100 basis points.
According to independent reports, the Dodd-Frank Act:
Reduces pretax earnings up to $34 billion annually for the eight large banks
Decreases free checking accounts by 40%
Requires nearly 26,000 full-time employees to file compliance paperwork annually
Lowers the return on equity of community banks with less than $500M in assets tobetween 6-8%