The Dodd-Frank Act Five Years Later: Are We Freer?

14 Pages Posted: 17 Dec 2015 Last revised: 5 Jan 2016

See all articles by Todd J. Zywicki

Todd J. Zywicki

George Mason University - Antonin Scalia Law School, Faculty; PERC - Property and Environment Research Center

Date Written: September 17, 2015

Abstract

This congressional testimony summarizes the effects on consumers and the economy of Dodd-Frank, the Durbin Amendment the Consumer Financial Protection Bureau, and other government regulations (such as the CARD Act of 2009) enacted in the wake of the recent financial crisis. The testimony notes that the combined effect of these laws and regulations has resulted in higher bank fees, a dramatic reduction in access to free checking, an increase in the number of unbanked consumers, a dramatic reduction in access to credit cards for low-income consumers, and continued low access to mortgages, especially among lower-income and higher-risk borrowers. In addition, because of the crushing and disproportionate burden of Dodd-Frank’s regulations on smaller banks, the law has promoted consolidation of the banking industry and forced many smaller banks to exit certain product markets, especially mortgages. This combined effect has reduced choice and competition for consumers. Finally, the lack of democratic accountability over the CFPB has resulted in an agency defined by bureaucratic overreach, resulting in an invasive and reckless data-mining project and assertion over many industries and products that stand outside of the agency’s authorized jurisdiction.

Keywords: banks, Consumer Financial Protection Bureau, CFPB, crony capitalism, Dodd-Frank Act, financial crisis, moral hazard, Operation Choke Point, political opportunism, rule of law

JEL Classification: K23

Suggested Citation

Zywicki, Todd J., The Dodd-Frank Act Five Years Later: Are We Freer? (September 17, 2015). George Mason Law & Economics Research Paper No. 15-54. Available at SSRN: https://ssrn.com/abstract=2704076 or http://dx.doi.org/10.2139/ssrn.2704076

Todd J. Zywicki (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

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PERC - Property and Environment Research Center

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