To Dodd-Frank and Back: Regulatory Burden and the Economic Growth, Regulatory Relief, and Consumer Protection Act

Abstract

We measure the regulatory burden Dodd-Frank imposes and the regulatory relief the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) affords. We analyze burden and relief on various measures of bank performance. And we emphasize community-bank holding companies (BHC). Based on data in the Consolidated Financial Statements for Holding Companies (FR-Y9C) reports from 1991 to 2019 and a model of a price-taking intermediary, we parsimoniously specify each performance measure as a function of BHC-specific observable variables, BHC-specific unobservable heterogeneity, Dodd-Frank regulation, and EGRRCPA relief. On balance, we find Dodd-Frank reduces loans per assets and loans per employee, while it increases non-interest expenses. Meanwhile, EGRRCPA provides some regulatory relief. For example, for mid-sized community BHCs, the implementation of EGRRCPA increases return on assets by roughly 23 basis points annually. JEL Codes: G21, G28