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The House Committee on Financial Services is no fan of the Dodd-Frank Act. This we know. Chaired by Congressman Spencer Bachus (R-AL), the committee claims that Dodd-Frank "wrote ‘too big to fail’ into law,” and advocates for its repeal.
On Wednesday, the committee published a blog post titled, “We Listened: What Small Banks and Small Businesses Are Saying About the Dodd-Frank Act,” quoting 20 different "anti-Dodd-Frank" small bank executives from around the country. Citing a plethora of unclear regulations and the burden of compliance, the small bank reps gave their takes on why Dodd-Frank is bad for their businesses.
Let’s take a look at some of the more interesting responses posted.
“Over the last several years, banks have faced increased regulatory costs and will face hundreds of new regulations with the Dodd-Frank Act. These pressures are slowly but surely strangling the traditional community banks, and handicapping their ability to meet the credit needs of their communities.” -- Matthew H. Williams, Chairman and President, Gothenburg State Bank
“To community banks like mine, regulation is a disproportionate expense, burden, and a real opportunity cost. My compliance staff is half as large as my lending staff. This is out of proportion to our primary business: lending in our communities to support the local economy.” -- Salvatore Marranca, President and Chief Executive Officer, Cattaraugus County Bank
“If Dodd-Frank is allowed to stand and proliferate as a monster regulatory overhaul, only the largest institutions will be able to navigate its requirements, and the community institution model will continue to diminish. The cost of regulatory compliance is simply staggering. I’m not talking about efforts to keep an institution out of trouble; I’m talking about a well-meaning community institution that has no intention of being unfair to members of their own town. These smaller institutions spend a disproportionate amount of money and time to just meet the reporting and manpower requirements of this new regulatory overkill.” -- Cliff McCauley, Executive Vice President, Correspondent Banking, Frost Bank
Now there’s an obvious slant to this post. All 20 of the bank or business owners quoted are anti-Dodd-Frank, and the piece begins by mockingly referring to the act’s supporters as “fact checkers.”
So, just to be clear, there’s a strong argument to be made in favor of Dodd-Frank. Many groups and people have made it – including this guy – and even most of Dodd-Frank’s detractors agree that some degree of regulation is necessary for the financial industry to function properly.
But that caveat notwithstanding, this Committee post does offer an interesting look in to what Dodd-Frank’s biggest detractors are saying.
Do you have something to add to the Dodd-Frank debate? Let us know in the comments below.
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