How and When Will the Dodd-Frank Bill Impact Retail Banking?

Analyst: Bill Bradway

July 16, 2010

The historic legislative effort to reshape all forms of banking has finally produced a result – the Dodd- Frank bill. Unlike historic predecessor bills that were designed to impose more regulation (FIRREA, FDICIA) during the S & L crisis and bailout, this bill is named after the two key protagonists in the Senate and House of Representatives. Despite the massive amount of time spent to pass the bill, opinion is divided over its value and impact. For example, the Wall Street Journal polled a dozen industry pundits and their grades on the bill ranged from A- to F with a few incompletes.

The bill is complex and addresses a wide range of financial institutions and issues. Dividing the retail banking issues into near and long term is based on examining the clarity of the issue and the likely form of the enabling regulation. The true long term impact will not become more apparent until enabling regulations are created and implemented.

• In the meantime, should banks and bank technology vendors just wait for more clarity?
• Should these players plan for and make changes now?

This analysis focuses on near term initiatives that retail banks and their vendors can pursue and a few additional long term issues. Implementation of future consumer financial regulations will be divided between the newly authorized Consumer Financial Protection Bureau (CFPB) and the surviving regulators.

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