Perhaps the longest drafted bill that was passed and implemented by the US government by far, the Dodd Frank Wall Street Reform and Consumer Protection Act was set to promote healthier and less risky economic environment to completely avoid the same 2008 economic crisis from happening again. As an abstract to many economic regulations, Dodd Frank Regulations ensures the survivability of big financial institutions and their smooth liquidation process in the event of inevitable company closure. Because these huge institutions carry the fate of the country’s economy on their back, the government could not afford to just let them face their imminent end without doing anything on their part. Dodd Frank Regulations in turn, became the ultimate answer to address this issue on the domino-effect structure of the economy. By mitigating cases of fraud and predatory practices in the market, as well as promoting the welfare of borrowers from abusive lending arrangements and mortgages, Dodd Frank Regulations has caught the interest of the whole financial market. While there are many who seem to be happy about the implementation of the Dodd Frank Act, not everybody feels quite affirmative about the current developments in the economic structure of the country. For most part, people who are against the idea of Dodd Frank have expressed their honest opinion about the matter, saying that they have found numerous flaws in the drafted Dodd Frank Regulations which can reasonably impact the economy negatively.
First on the list of the disadvantages found against Dodd Frank Regulations is its tendency to increase the costs of lending and borrowing activities knowing that the market for financial opportunities now have become more regulated and standards imposed commonly requires additional upgrades in processes to meet necessary conditions. Even the availability of most credit instruments have drastically decreased because of the Dodd Frank Regulations.
Aside from additional requirements, Dodd Frank also gives extra homework for most financial institutions since they have to understand most of the regulations included in the Dodd Frank Regulations, which could mean that they have to spend more time and resources just to simplify the complexity of Dodd Frank concepts. This could entirely affect most business operations since employees would have to be oriented first with new regulatory requirements, decreasing the quality of customer service as employees try to adapt with the Dodd Frank mandate.
While Dodd Frank Regulations seeks to regulate big financial institutions better, small banks and other companies who have minimal effect on economic conditions are also greatly affected by Dodd Frank implementation.