Dodd-Frank’s Impact on Revolving Consumer Credit

Dodd-Frank financial reform has led to a 14.5 percent drop in consumer revolving credit since 2010. AAF examined the impact of Dodd-Frank on revolving credit, such as credit cards and debt that is paid off periodically, and found significant impacts from the law. Dodd-Frank’s $30 billion in final regulatory costs and 72 million hours of paperwork must be borne by someone and will likely have effects throughout the economy. Based on the latest research, it appears consumer credit access is taking a substantial hit.

We know the impact of Dodd-Frank is both broad across the economy and profound for certain affected industries. Research reveals that the effects are also pronounced for consumers. A 14.5 percent drop in revolving credit likely wasn’t an intended consequence of the law, but tightened capital standards and billions of dollars in new regulatory costs must appear somewhere in the economy. Based on this research, it appears consumers are carrying a heavy load from Dodd-Frank regulation.

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