Now that Congress has passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, it might be a good time to compare the 2,319-page financial reform bill (245 pages longer than the healthcare bill President Obama signed into law earlier this year) to the previous bills listed below, which are considered among the most consequential legislative acts for banking and finance:
1. Federal Reserve Act (1913) – 31 pages.
2. Glass-Steagall Act (1933) – 37 pages.
3. Interstate Banking Efficiency Act (1994) – 61 pages.
4. Gramm-Leach-Bliley Act (1999) – 145 pages.
5. Sarbanes-Oxley Act (2002) – 66 pages.
A few comments:
1. It took only 31 pages of legislation in 1913 to create the nation’s central bank and establish the entire Federal Reserve System, with a Board of Governors and 12 district banks, as well as creating a single new U.S. currency. In comparison, just the table of contents (15 pages) and the list of definitions (11 pages) in the Dodd-Frank bill are almost as long as the entire Federal Reserve Act, and the total Dodd-Frank bill at 2,319 pages is almost 75 times longer.
2. One of the most comprehensive acts of banking reform in U.S. history, the Glass-Steagall Act of 1933, which overhauled the nation’s banking system after 9,000 bank failures in the early 1930s, took only 37 pages of legislation—1.6 percent the number of pages in the Dodd-Frank bill.
3. The combined size of the five previous major banking bills listed above comes to only 340 pages in total, or about one-seventh the size of the whopping 2,319-page Dodd-Frank bill.
4. Many critics of the 66-page Sarbanes-Oxley Act argued it could more accurately be called the “Accountants’ Full Employment Act of 2002.” Harvey Pitt, former SEC chief, has already referred to the 2,319-page Dodd-Frank bill as the “Lawyers’ and Consultants’ Full Employment Act of 2010,” adding, “this legislation fixes nothing, accomplishes nothing, yet promises everything.”
Mark J. Perry ([email protected]) is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry’s blog is at http://mjperry.blogspot.com/.