Congress Should Scrap Dodd Frank Provisions to Unleash Growth 

Today marks the 15^th anniversary of the passage of the Dodd-Frank Act, a hallmark piece of legislation that has come to the regulatory regime governing financial institutions in the post-Global Financial Crisis era.  

Proponents of government intervention praised the 2,000-page law as a necessary step towards rebuilding trust in the financial system, yet 15 years later, America’s banking system is stronger despite—rather than because of—many of its mandates. The Federal Reserve’s June 2025 stress test showed the 22 largest banks would keep common‑equity Tier 1 capital at a healthy 11.6 percent even after a hypothetical financial meltdown that would entail a 30% decline in property values and a 10% unemployment rate—more than double the 4.5 percent minimum. Even prior to Dodd-Frank, banks steadily increased their tier 1 capital ratios, weakening the hypothesis that Dodd-Frank played a causal role in capitalization recovery.  

The 2018 Economic Growth, Regulatory Relief and Consumer Protection Act demonstrated the importance of pruning Dodd-Frank. Even Senator Barney Frank himself admitted that regulatory oversight went too far in the original law. The 2018 law raised the systemically important threshold from $50 billion to $250 billion and exempted small banks from the Volcker Rule. Deregulation has clearly shown to improve economic growth without increasing risks. 

The Trump Administration should build upon the work it completed during the first administration and target other provisions within the law that stifle economic growth and shrink consumer choice in the financial services sector. Congress and the administration should work together to eliminate the provisions listed below.   

1. The Durbin Amendment  

The Durbin Amendment created a notorious price control on interchange fees for debit card issuers. It targets a major source of revenue card issuers rely upon to pay for the infrastructure, settlement, and fraud protections that confer convenient, secure, and timely payment options for merchants and card users. Empirical research shows the card industry does not exceed the DOJ threshold for market concentration. Yet, despite this, in 2023, the Federal Reserve attempted to revise the Durbin Amendment to further cap interchange fees. Consumers would lose out big time as they would likely see fees rise for checking account services and the elimination of cash back and other reward programs. Contrary to proponents’ claims, merchants did not pass on their savings to consumers. In fact, a 2015 study from the Richmond Fed demonstrated that far more merchants increased prices instead of reducing them.  

2. The Collins Amendment 

The Collins Amendment, in conjunction with the nascent Basel III guidelines, created one of the most capital-binding regimes for financial institutions anywhere on the planet. The Collins amendment introduced minimum leverage and risk-based capital floors. When U.S. agencies imported non-binding Basel III capital ratio guidelines into domestic rules, they felt empowered enough to set the enhanced supplementary leverage ratio (eSLR) above that which Basel recommended. An additional 2% surcharge of Tier 1 capital against total leverage was added to the 3% Basel baseline. This resulted in an overly punitive framework that overshoots regulatory standards in comparable peer jurisdiction-raising balance-sheet costs that affects credit availability and market liquidity. Attention to this issue has become more salient recently thanks to Treasury Secretary Scott Bessent and Fed Chairman Powell’s joint expression of willingness to revisit the eSLR calculation to better reflect market needs within the treasury market.  

3. Section 1071 

Section 1071 is a provision within Dodd-Frank that mandates banks track small business lending data by compiling data on several non-pecuniary variables from race, gender, to minority ownership of the business. 1071 raises data privacy concerns among prospective applicants of small business loans, who will become a datapoint entry in the eyes of the CFPB. 81 different data points would be mandated according to the final rule, a departure from the original 13 proposed in statute.  There are also concerns that the data could be weaponized to penalize banks or incentivize them to direct capital towards certain businesses under the guise of DEI or similar politically motivated goals. The compliance cost that would be incurred by implementing a rule would cost banks and depository institutions millions. In any case, the government should not decide the direction in which capital flows. Financial institutions should be left alone to make that decision.  

4. Section 1033  

Section 1033 would have forced banks to share consumer account data free of charge with third parties. Section 1033 infringes upon banks’ ability to levy fees for third party data usage under the guise of consumer choice. It would upend bilateral agreements between banks and third parties in favor of free data access in the name of open banking. In reality, this provision would entail a loss of control over who banks decide to share data with, opening up potential risks for fraud and security breaches. The nature of the provision embodies the spirit of regulators’ desire to entrench their control over the financial sector, treating banks as public utilities. No private sector business should be obliged to serve third party fintech services for free.