IDEAS home Printed from
   My bibliography  Save this article

The Dodd–Frank Act’s non-uniform regulatory impact on the banking industry


  • Burak Dolar

    (Western Washington University)

  • Ben Dale

    (University of Washington)


The Dodd–Frank was signed into law in 2010 in response to the financial crisis of 2008 and the ensuing Great Recession. The changes brought about by the Dodd–Frank Act impact, directly and indirectly, all institutions operating in the banking industry. In this paper, we study the relative impact of increased compliance costs across banks of different sizes. Analyzing a dataset comprising the entire population of commercial banks and thrifts from 2003 to 2016, the empirical findings suggest that the Act’s cost of compliance has fallen more heavily on small institutions relative to their large competitors, thus producing an intra-industry redistribution of wealth.

Suggested Citation

  • Burak Dolar & Ben Dale, 2020. "The Dodd–Frank Act’s non-uniform regulatory impact on the banking industry," Journal of Banking Regulation, Palgrave Macmillan, vol. 21(2), pages 188-195, June.
  • Handle: RePEc:pal:jbkreg:v:21:y:2020:i:2:d:10.1057_s41261-019-00106-z
    DOI: 10.1057/s41261-019-00106-z

    Download full text from publisher

    File URL:
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL:
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. James DiSalvo & Ryan Johnston, 2016. "How Dodd–Frank affects small bank costs," Banking Trends, Federal Reserve Bank of Philadelphia, issue Q1, pages 1-6.
    2. Bartel, Ann P & Thomas, Lacy Glenn, 1987. "Predation through Regulation: The Wage and Profit Effects of the Occupational Safety and Health Administration and the Environmental Protection Agency," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 239-264, October.
    3. Frederick J. Schroeder, 1985. "Compliance costs and consumer benefits of the electronic fund transfer act : recent survey evidence," Staff Studies 143, Board of Governors of the Federal Reserve System (U.S.).
    4. Jess C. Beltz & Anjan V. Thakor, 1993. "An empirical analysis of the costs of regulatory compliance," Proceedings 434, Federal Reserve Bank of Chicago.
    5. Gregory E. Elliehausen & Barbara R. Lowrey, 1997. "The cost of implementing consumer financial regulations: an analysis of experience with the Truth in Savings Act," Staff Studies 170, Board of Governors of the Federal Reserve System (U.S.).
    6. Buchanan, James M & Tullock, Gordon, 1975. "Polluters' Profits and Political Response: Direct Controls Versus Taxes," American Economic Review, American Economic Association, vol. 65(1), pages 139-147, March.
    7. James DiSalvo & Ryan Johnston, 2016. "Banking trends: how Dodd–Frank affects small bank costs," Economic Insights, Federal Reserve Bank of Philadelphia, vol. 1(1), pages 14-18, January.
    8. Troy Davig & Michal Kowalik & Charles S. Morris & Kristen Regehr, 2015. "Bank consolidation and merger activity following the crisis," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 31-49.
    9. Ron J. Feldman & Ken Heinecke & Jason Schmidt, 2013. "Quantifying the costs of additional regulation on community banks," Economic Policy Paper 13-3, Federal Reserve Bank of Minneapolis.
    10. Roisin McCord & Edward Simpson Prescott & Timothy Sablik, 2015. "Explaining the Decline in the Number of Banks since the Great Recession," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, issue March.
    11. Gregory E. Elliehausen & Robert D. Kurtz, 1985. "Scale economies in compliance costs for consumer credit regulations: the truth in lending and equal credit opportunity laws," Staff Studies 144, Board of Governors of the Federal Reserve System (U.S.).
    12. Bartel, Ann P & Thomas, Lacy Glenn, 1985. "Direct and Indirect Effects of Regulation: A New Look at OSHA's Impact," Journal of Law and Economics, University of Chicago Press, vol. 28(1), pages 1-25, April.
    13. Gregory E. Elliehausen, 1998. "The cost of banking regulation: a review of the evidence," Staff Studies 171, Board of Governors of the Federal Reserve System (U.S.).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dolar, Burak & Shughart II, William F., 2011. "Enforcement of the USA Patriot Act's anti-money laundering provisions: Have regulators followed a risk-based approach?," Global Finance Journal, Elsevier, vol. 22(1), pages 19-31.
    2. J.A. den Hertog, 2010. "Review of economic theories of regulation," Working Papers 10-18, Utrecht School of Economics.
    3. Roland Vaubel, 2008. "The political economy of labor market regulation by the European Union," The Review of International Organizations, Springer, vol. 3(4), pages 435-465, December.
    4. Vaubel, Roland, 2003. "Principal-Agent-Probleme in internationalen Organisationen," HWWA Discussion Papers 219, Hamburg Institute of International Economics (HWWA).
    5. Gregory E. Elliehausen, 1998. "The cost of banking regulation: a review of the evidence," Staff Studies 171, Board of Governors of the Federal Reserve System (U.S.).
    6. Schenkel, Andreas, 2015. "Bankenregulierung und Bürokratiekosten: Ein Problemaufriss," Arbeitspapiere 152, University of Münster, Institute for Cooperatives.
    7. Jeffrey Brinkman, 2017. "Making Sense of Urban Patterns," Economic Insights, Federal Reserve Bank of Philadelphia, vol. 2(1), pages 1-5, January.
    8. Nicole Darnall & Irene Henriques & Perry Sadorsky, 2010. "Adopting Proactive Environmental Strategy: The Influence of Stakeholders and Firm Size," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 1072-1094, September.
    9. Romano, Eduardo & Orden, David, 1995. "The Political Economy of U.S. Import Restrictions on Nursery Stock and Ornamental Plants in Growing Media," 1995: Understanding Technical Barriers to Agricultural Trade Conference, December 1995, Tucson, Arizona 50707, International Agricultural Trade Research Consortium.
    10. Dean, Thomas J. & Brown, Robert L. & Stango, Victor, 2000. "Environmental Regulation as a Barrier to the Formation of Small Manufacturing Establishments: A Longitudinal Examination," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 56-75, July.
    11. Irja Vormedal & Lars H. Gulbrandsen & Jon Birger Skjærseth, 2020. "Big Oil and Climate Regulation: Business as Usual or a Changing Business?," Global Environmental Politics, MIT Press, vol. 20(4), pages 143-166, Autumn.
    12. Gaganis, Chrysovalantis & Galariotis, Emilios & Pasiouras, Fotios & Staikouras, Christos, 2020. "Bank profit efficiency and financial consumer protection policies," Journal of Business Research, Elsevier, vol. 118(C), pages 98-116.
    13. Higgins, Matthew J. & Yan, Xin & Chatterjee, Chirantan, 2021. "Unpacking the effects of adverse regulatory events: Evidence from pharmaceutical relabeling," Research Policy, Elsevier, vol. 50(1).
    14. Cull, Robert & Demirgüç-Kunt, Asli & Morduch, Jonathan, 2011. "Does Regulatory Supervision Curtail Microfinance Profitability and Outreach?," World Development, Elsevier, vol. 39(6), pages 949-965, June.
    15. James DiSalvo & Ryan Johnston, 2017. "Credit Unions’ Expanding Footprint, Is there any evidence new rules could cause small banks to lose market share to credit unions?," Banking Trends, Federal Reserve Bank of Philadelphia, issue Q1, pages 17-23.
    16. Johnson, Shane A. & Sarkar, Salil K., 1996. "The valuation effects of the 1977 Community Reinvestment Act and its enforcement," Journal of Banking & Finance, Elsevier, vol. 20(5), pages 783-803, June.
    17. Carl Hampus Lyttkens, 1993. "Monitoring health in Sweden: On the rationale for working environment regulations," Health Economics, John Wiley & Sons, Ltd., vol. 2(4), pages 323-332, December.
    18. Schenkel, Andreas, 2016. "Kosten der Compliance-Regulierung: Eine empirische Untersuchung am Beispiel der deutschen Genossenschaftsbanken," Arbeitspapiere 169, University of Münster, Institute for Cooperatives.
    19. Laura I. Langbein, 2002. "Responsive bureaus, equity, and regulatory negotiation: an empirical view," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(3), pages 449-465.
    20. Koh, Wei Chern, 2011. "What drives firms' decisions to lobby and determinants of their lobbying positions: Evidence from firms' comment letter submissions during FASB's stock option expensing proposal in 2004," The International Journal of Accounting, Elsevier, vol. 46(1), pages 1-24, March.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jbkreg:v:21:y:2020:i:2:d:10.1057_s41261-019-00106-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.