I voted against the Dodd-Frank financial law when it was considered by the Senate in 2010. President Obama and Democrats in Congress had proposed the sweeping overhaul of financial supervision – the largest since the Great Depression – as the appropriate response to the 2008 economic crisis. Instead, the 2,300-page law has added a crushing regimen of unjustified regulations and regulatory uncertainty, putting more power in the hands of big banks and Washington bureaucrats rather than protecting consumers and boosting the economy.
The fifth anniversary of Dodd-Frank this month offers an important benchmark for assessing the law’s impact and asking whether it truly addresses the causes of the financial crisis. One of its authors, former Sen. Chris Dodd (D-Conn.), once said that “no one will know until this is actually in place how it works.” Now that major portions of Dodd-Frank have been implemented, we can clearly see why it does not amount to real reform:
• Banks described as ‘too big to fail’ have grown even bigger. Rather than eliminating the risk of taxpayer bailouts for big banks, Dodd-Frank has institutionalized bailouts and accelerated consolidation among financial institutions. Nearly 50 percent of financial system assets are now controlled by the country’s top five banks. Meanwhile, an agency established by Dodd-Frank known as the Consumer Financial Protection Bureau gives federal bureaucrats unprecedented power to make decisions about consumer financial products without congressional oversight.
• Regulation for Wall Street is hurting Main Street. Unlike big banks, community financial institutions do not have the resources to comply with the law’s numerous regulations, forcing them to pass costs along to consumers or go out of business. Our country has 2,000 fewer community banks today than it did in 2008. There are nine fewer locally chartered banks in Mississippi since Dodd-Frank became law in 2010.
• Consumers are faced with fewer choices and additional costs. Without community banks, consumers and small businesses have limited options for accessing credit. This capital is important to innovation and entrepreneurship, which drive economic growth. Average Americans are now more likely to pay for their checking account, which most banks offered at no cost before Dodd-Frank.
I continue to support measures that would roll back Dodd-Frank’s most harmful provisions, including its burdensome regulations on our nation’s smaller banks. These community banks were not responsible for the 2008 financial crisis, but they continue to suffer under government micromanagement and intrusive regulation. I recently wrote a letter, supported by Mississippi’s entire congressional delegation, urging the Federal Reserve, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC) to avoid penalizing community banks and limiting consumer credit when setting new capital standards.
The rules proposed by the banking regulators are densely complex. As FDIC Vice Chairman Thomas Hoenig remarked during an earlier rulemaking, “Of what use is a measure that no one can understand?”
Like the President’s massive health-care law, Dodd-Frank is an example of how a big-government approach can produce unintended consequences, hurting those it was supposed to protect. The financial reform law has already resulted in more than 22,000 pages of regulations, with a third of its regulatory mandates yet to be completed.
Before Dodd-Frank becomes even more entrenched, Congress should work toward reforms that put consumers and taxpayers first. We still have an opportunity to offer better ideas.

By Senator Roger Wicker