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GAO reports cost of Dodd-Frank

By Marcie Geffner · Bankrate.com
Tuesday, July 19, 2011
Posted: 12 pm ET

The U.S. Government Accountability Office, or GAO, has issued a report showing how federal government agencies are utilizing financial and human resources to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Enacted a year ago, Dodd-Frank includes hundreds of provisions intended to strengthen oversight of U.S. banks and nonbank financial companies and consolidate consumer protection responsibilities that were fragmented across multiple agencies, the GAO explained. Dodd-Frank also authorized three new federal offices and agencies -- the Consumer Financial Protection Bureau (CFPB), Financial Stability Oversight Council and Office of Financial Research -- to implement the reforms.

Together, the many provisions and new agencies have raised questions about the costs of compliance, the GAO noted.

The report, posted on the GAO website, includes statistics, graphs and pie charts for each of the 11 agencies affected by Dodd-Frank.

A few highlights, from the GAO summary:

The amount of new funding associated with implementation for 2011-12 varied significantly across the 11 agencies, ranging from a low of zero at the Federal Trade Commission (FTC), which has only minimal new responsibilities, to a high of around $329 million at the CFPB, one of the startups.

Nine of the agencies for which the most recent year's data were available said 25 percent of their total budget increase was related to Dodd-Frank. Agencies are relying on assessments and revenues, appropriations, offsetting collections and transfers from other agencies for funding. Six agencies reported that funding would be fully or partly met by assessments imposed on regulated institutions or revenues from their operations, the GAO said.

Nearly all the agencies plan to have some staff work specifically on Dodd-Frank responsibilities. New full-time equivalent government jobs related to Dodd-Frank implementation for 2011-12 ranged from a low of zero, again at the FTC, to a high of 1,225 -- its entire staff -- at the CFPB.

The agencies faced challenges in accounting for Dodd-Frank-related resources since the programs are evolving, funds are being transferred and new offices and agencies are being established. This fluidity, the GAO said, makes these estimates "particularly uncertain and subject to change."

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