Stephen Wilson, the American Bankers Association’s former chairman, addressed an audience at the Special Seminar on International Finance on Thursday and described how the Dodd-Frank Act has created a regulatory burden.
“The weight of these new rules creates pressure to hire additional compliance staff instead of customer-facing staff,” Wilson said, according to ABA.com. “It means more money spent on outside lawyers, reducing resources that could be directly applied to serving a bank’s customers and community. In the end, it means fewer loans get made, slower job growth and a weaker economy.”
The law has prompted more than 5,200 pages of proposed and final rules that are already costing the banking industry major expenses in compliance costs.
Wilson said that the ABA wants to work with financial regulators to help them write the 77 percent of the law’s required regulations that have not yet been written.
With the ABA’s help, regulators will be able to understand the implications of the provisions, Wilson said.
Wilson said that he did not disagree with the entirety of the Dodd-Frank Act.
“There are provision in Dodd-Frank that our industry supported, including several industry-advocated provisions aimed at preventing a repeat of the crisis that nearly brought our economy to its knees in 2008,” Wilson said, according to ABA.com.
Wilson said the new process for winding down failing, systemically important financial institutions will result in more disciplined behavior by institutions, creditors and depositors.