May 23, 2011
Earlier this month, Federal Reserve Chairman Ben Bernanke told lawmakers that there was “reason to be concerned” that the debit interchange exemption for smaller financial instructions wouldn’t be effective and may even result in bank failures. (Read more) Now, Investor’s Business reports that the American Bankers Association estimates Dodd-Frank, which mandates debit interchange regulation, will kill more than 1,000 banks by the end of the decade.
The ABA’s prediction is based largely on the fact that banks will have to comply with around 20 new reporting requirements under the Home Mortgage Disclosure Act.
“[It’s] bad news for community banks already collapsing under mountainous regulatory burdens,” said ABA Chairman Stephen Wilson, who also heads Cincinnati-based LCNB National Bank.
The Consumer Financial Protection Bureau, created by Dodd-Frank, will be reviewing much of the data, according to Investor’s Business.
“We will build a strong enforcement arm,” said the CFPB’s Elizabeth Warren back in March. “More than half our budget will be committed to establishing supervision and meaningful enforcement.”
Investor’s Business reports approximately 42 mostly smaller banks have collapsed this year due to loan issues. Click here to read more about how Dodd-Frank is expected impact community banks.
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CFPB Announces Initiative to Combine Mortgage Loan Disclosures
Just 5% of Dodd-Frank Rules Finished; More Agencies Likely to Miss Deadlines
House Financial Services Committee: 3 Bills Bringing Oversight to CFPB Approved
Team Warren: Who’s In, Who’s Out and Who’s on the Fence
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