The Dodd-Frank Wall Street Reform and Consumer Protect Act was signed into law with the intent of overhauling the financial services industry to protect the American consumer. Though intentions were good, the effects have proved frustrating for the industry.
According to the "11th Annual Legal Study" by Corporate Board Member and FTI Consulting, the recent regulatory parade is contributing to governance gridlock and increased liability. The majority of those surveyed feel that the ultimate impact of the Dodd-Frank act will be increased oversight and reduced earnings. Close to 75% of directors and general counsel do not anticipate that the act will be positively perceived in the future.
"There are a myriad of issues that companies are facing in the current regulatory environment, and the weight of these concerns only appears to be escalating among directors and general counsel," said Neal Hochberg, senior managing director and leader of the forensic and litigation consulting practice at FTI Consulting.
Additionally, 69% of general counsel sees regulatory compliance as the function adding the most workload to the internal legal department over the next 12 months. It seems the well-meaning Dodd-Frank act has eased some consumers concerns while having the opposite effect on directors and counsel.