Royce on the Costs of Rising Regulations
Washington,
May 9 -
Rep. Ed Royce (R-CA), a senior member of the House Financial Services Committee, highlighted the costs of rising regulations during today’s hearing to examine the impact that growing federal regulations have on smaller institutions and the overall economy.
"The Dodd-Frank Act’s 2300 pages of government micro-management ushered in hundreds of costly regulations. The cost to comply with these mandates has disproportionately affected smaller institutions," Royce said.
"Instead of focusing on investing and lending to the communities they serve, these smaller institutions are forced to divert their resources, both in time and money, to comply with these excessive regulations," Royce said.
A recent article, "Community Bankers Face a Choice: Sell Out, Fold, or Change," warned that the number of banks may be half of what it is today in under a decade. Only a quarter of the way through Dodd-Frank’s required rulemakings and smaller institutions already face exponentially higher compliance costs.
As seen in today’s testimony, regulatory burden is becoming the rule rather than the exception. In fact, one community banker recently noted, for every employee he has focused on traditional banking activities, he has 1.2 employees focused solely on compliance.
"Regulation layered on top of regulation isn’t a solution. Bottom line, while smaller institutions struggle to cut through rising red tape, consumers suffer. Another unintended consequence of Dodd-Frank’s 2300 pages," Royce said.
NOTE: Recently, the Financial Services Committee launched the Dodd-Frank Burden Tracker, an online resource to view the costs of complying with federal regulations. View the Dodd-Frank Burden Tracker here.
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