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Dodd-Frank, CFPB here to stay

By Claes Bell, CFA · Bankrate.com
Thursday, November 8, 2012
Posted: 11 am ET

Regardless of how you feel about the results of the 2012 election, it's a good bet your bank's not too crazy about them.

The financial industry heavily supported former Gov. Mitt Romney's bid for the presidency. A July analysis by USA Today found that a quarter of Romney's bundlers -- the high-powered donors who help raise massive sums for candidates -- were from the financial industry.

Romney's economic plan called for repealing the Dodd-Frank financial reform law and replacing it with a "streamlined" regulatory framework that likely would have involved lower compliance costs and fewer restrictions on financial institutions. Romney had also called for restructuring the Consumer Financial Protection Bureau, which industry trade organizations, including the American Bankers Association, have criticized. But with the re-election of President Barack Obama and the Democrats retaining control of the Senate, Dodd-Frank and the CFPB are probably safe.

If you're a bank or credit union, that's not great news. Dodd-Frank places a substantial regulatory burden on all types of financial institutions. In a survey by the National Association of Federal Credit Unions, more than 90 percent of the association's members reported that the cost of complying with government regulations had increased expenses, says Brad Thaler, vice president of legislative affairs for the NAFCU.

"We're going to continue to push for broader regulatory relief overall for credit unions … trying to move toward not just overregulation but smarter regulation, whether that's from the CFPB or replacing other outdated laws and regulations that are on the books," Thaler says.

For customers, it's a little more complicated. The cost to banks from Dodd-Frank features such as the Durbin Amendment and the CFPB has meant the erosion of free checking and upward pressure on unpopular bank fees such as  monthly maintenance fees for checking accounts. It has also contributed to the rapid decline of popular debit card rewards programs at major banks.

But the CFPB has emerged as an overall positive for bank customers. Beyond its first steps to create and enforce new rules, the CFPB's ability to collect and respond to individual consumer complaints has helped thousands of consumers resolve disputes with financial services providers.

What do you think? How will the results of the election impact Dodd-Frank and the CFPB? Tell me in the comments section.

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1 Comment
Bill Coble
December 01, 2012 at 9:16 pm

The CFPB from first hand experience needs more coverage, they are a wealth of information for the consumer and most importantly it's really the only entity the banks will acknowledge because of the authority given the CFPB. The complaint submission is easy and accessible and bank's have to respond within a certain period of time. I can see why the bank lobby was so intent on seeing Romney elected, the CFBP is holding them accountable when concerns raised by consumers merit management oversight and a response.