Costs of Compliance with the Dodd-Frank Act

Abstract

The Dodd-Frank Act of 2010 roughly doubled the number of regulations applied to U.S. banks. In a recent paper, my coauthor Scott Burns and I estimate the effects of the Dodd-Frank Act on U.S. bank expenses. This brief summarizes three key findings of that study: (1) Banks’ total noninterest expenses increased by an average of more than $50 billion per year after the passage of Dodd-Frank. (2) Increases occurred both in salary expenses from hiring new workers and in non-salary expenses such as auditing, consulting, and legal fees. (3) Smaller banks were disproportionately affected by larger increases in salary and non-salary expenses.