Last July, Congress passed and President Barak Obama signed into law the omnibus Dodd-Frank Wall Street Reform and Consumer Protection Act, ushering in a new era of financial regulation. With fourteen separate titles spread out over 2,319 pages, the Dodd-Frank Act is truly monumental. The Act requires at least 243 new rule makings by 11 different federal agencies and a variety of extensive new disclosures and reporting requirements. Additionally, the Act calls for 60 new studies and 90 new reports. Most expect that Dodd-Frank will result in more than a mind-blowing 5,000 pages of new regulations directed at the entire financial services industry.
Are banks and other consumer financial services companies worried about all of this new regulation? You better believe it. A recent study conducted by the Illinois Bankers Association found that almost 97 percent of the respondents believe that implementing the Act will significantly increase operating expenses. Eighty percent of the respondents believe that the Dodd-Frank Act will require their institutions to outsource regulatory compliance functions, compounding anticipated increases in operating expenses.