TBA Op-Ed: Dodd-Frank Has Harmed Consumers

In an op-ed appearing in several Texas community newspapers, Texas Bankers Association President and CEO Eric Sandberg argued that the Dodd-Frank Act — which marks its fifth anniversary on Tuesday — has failed at protecting consumers. The law has driven community banks out of traditional activities like making home mortgages in small communities or to borrowers with unconventional credit histories.

“By forcing community banks out of consumer lending, Congress has started the process of leaving 16.3 million people [in smaller and rural communities] behind,” Sandberg wrote. “That may sound dramatic but Texas alone has 126 fewer banks now than before Dodd-Frank — the movement to leave these people without proper financial services is already in motion.”

Sandberg called for more balanced bank regulation that protects the financial system without increasing compliance costs and arbitrarily constricting credit decisions. “Finding the right balance is key to encouraging growth and prosperity,” he said.