House finance committee blasts White House’s ‘feeble spin’ on Dodd-Frank

by Ryan Smith23 Aug 2016
The House Financial Services Committee has found further ammunition against Dodd-Frank in a recent report that new regulatory burdens are forcing small banks to merge.

Last year mergers and acquisitions by US banks spked to around $18 billion – the highest level since 2009, according to Bloomberg. And it looks like that mark will be surpassed this year. This boom in mergers is due largely to regulation – in nine out of the 10 largest deals completed so far this year, increased regulation was cited as being behind the sale. Quite simply, many smaller institutions can’t afford the financial burdens that come with the increased oversight.

To put it simply: regulation created to prevent “too-big-to-fail” bailouts, is forcing many smaller banks to combine into a few big ones.

The House Financial Services Committee was quick to point the finger at Dodd-Frank for stifling smaller lenders.

“Just last week the White House was claiming that the crushing regulatory burden of the Dodd-Frank Act wasn’t harming community banks – not one bit,” the committee wrote on its blog. The report on increased mergers, it said, “exposes how feeble the White House’s spin is.”

Community bankers, by and large, confirm that Dodd-Frank is causing community banks to be swallowed up by larger entities.

“If Dodd-Frank is allowed to stand and proliferate as a monster of regulatory overhaul, only the largest institutions will be able to navigate its requirements, and the community institution model will continue to diminish,” Cliff McCauley, executive vice president of correspondent lending at Frost Bank, told the finance committee. “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.”
 

COMMENTS

  • by Winner | 8/23/2016 12:19:54 PM

    This is very true and this trickels down the the small independent broker and lenders as well. No can operate and it cost our clients more in fees.

  • by | 8/23/2016 2:11:09 PM

    I have been in the mortgage biz. since 1987. When ever a democrat was our countries president biz. was down . This guy Obama is the worst I've ever seen . He wanted change boy did it happen sadly it was done the STUPID WAY. We need change vote REPUBLICAN . If TRUMP is all we have vote TRUMP, we cannot afford another 4 years of democrats running our business lives.Look how the newspapers , news media and the web pound the republican party and praise the Democrats it's not fair game this is WRONG . The democrats control everything we are close to being a socialist country. Spread the word it's the democrats run by asshole lawyers taking over our businesses that are costing us lots of money. We must stop the DEMOCRATS THEY ARE EVIL AND DISHONEST vote REPUBLICAN TO SAVE AMERICA. Trump is the good guy its the news media and the democrats again making him look bad with LIES.HILARY THE LIAR CLINTON wow this lady will kill the mortgage biz.She's the one that's dangerous.

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