Costliest Regulation You've Never Heard Of

One of the costliest regulations to come down the pike of late has nearly managed to escape detection. Earlier this year, the Treasury Department published its “Guidance on Reporting Interest Paid to Nonresident Aliens,” which would require banks to report to the Internal Revenue Service the amount of interest they pay to non-resident aliens with a U.S. bank account. While the Treasury and the regulatory apparatus insist that the cost and inconvenience of adhering to this law are next to nothing, the reality is that this rule could cost the U.S. banking system hundreds of billions of dollars in lost deposits. In turn, this will cost our overall economy billions of dollars, while achieving no discernible benefits for banks, depositors, taxpayers, or the U.S. economy.