Academic journal article ABA Banking Journal
Rules without End. (Editor's Column)
MAYBE YOU SHOULD FEEL FLATtered. No other industry comes close to the kind of intrusive scrutiny that banks labor under. We're not talking about safety and soundness--other fields have similar necessary safeguards in place--we're talking about compliance regulations. It's a familiar litany: CRA, TiL, RESPA, HMDA, TiS, Reg. CC, Reg E, FCRA, BSA, and many more, like privacy, that have yet to become acronyms.
Beginning on p. 35 is a special section called Compliance Watch 2003. It contains 19 pages packed with data pertaining to how banks cope with the burden of compliance regulations. This first-ever report is the result of the vision of two people: our own Steve Cocheo, executive editor, and Peggy Wilson, director of corporate marketing communications for Bankers Systems, Inc. It also represents the fruits of a year's worth of labor by those two, the staff and bankers of ABA's Compliance Committee, and others. The report presents data from original research--the first of its kind conducted among compliance officers.
Taking nothing away from the value of this project, we nevertheless have to wonder about the huge cost of complying with literally dozens of mostly consumer-related regulations.
Proponents of the regulations would argue that they are justified by ensuring fairness in business. Even if you accept that as true, the inevitable result is volumes of detailed, often confusing rules and regulations requiring an expensive enforcement mechanism.
Once you start to codify behavior--particularly business behavior--you begin down a road that grows ever wider and longer. Obviously we need laws and regulations, but do laws alter behavior? Sometimes they influence it, if they're enforced. Just remember, though, hundreds of pages of laws and regulations didn't prevent the recent rash of misdeeds in business. …