Dodd-Frank is hard to understand, and that’s why it has so many enemies

While Mitt Romney was speaking at the U.S. Chamber of Commerce on Wednesday, chamber members from across the country descended on Capitol Hill to tell Congress to get the government off their backs.
Mitt Romney at the U.S. Chamber of Commerce in Washington. (Evan Vucci - AP)

Mitch Stebal, for one, was prepared to give Sen. Dick Durbin’s office an earful about overregulation. An employee of Busey Bank in Champaign, Ill., Stebal came to the U.S. Chamber’s annual confab for small businesses this week with a delegation from McLean County (“not Chicago,” he points out). Stebal said he mostly worried about the impact of Dodd-Frank on the industry, pointing out how the Durbin amendment had forced retail banks to limit debit-card swipe fees. But when pressed to explain how the law would affect his own work in commercial banking, Stebal didn’t have a long list of examples – and explained that was part of the problem: The new regulations are so complex that no one on Main Street knows what’s really going on, and it’s going to cost them to figure it out.

“The whole financial regulations act. … What is it, 2,500 pages?” Stebal said, trooping toward Durbin’s office in a small rally that the chamber had organized. Corporations have in-house lawyers and accountants to help them puzzle out complex new laws. But small businesses don’t. “Just the size and scope of it — [companies] will have to spend so much money to make sure they’re aware of what’s going on,” Stebal said. “They don’t have teams of attorneys to read them.”

Not all small businesses are quite so unhappy about Dodd-Frank. The Independent Community Bankers Association, for instance, applauds the law for subjecting big banks to greater oversight than their smaller, less risky counterparts, helping to level the playing field. I mentioned that argument to Stebal, but he wasn’t buying it. “That’s what they say …” he said, explaining that smaller banks would probably have to “follow along” with whatever the big banks did.

Such complaints about regulatory confusion and uncertainty can help give the Chamber’s grass-roots lobbyists a foot in the door when they come knocking on Capitol Hill. But it also could give proponents of Dodd-Frank another chance to make their case to the Main Street bankers, who – like most average Americans – are still confused about what’s actually in the law in the first place.