In the wake of prominent assertions that Dodd-Frank has had little to no negative effect on community banks and that community banks are better-off than ever, American Bankers Association President and CEO Rob Nichols penned an op-ed in Politico today emphasizing that Dodd-Frank and the cumulative regulatory burden are indeed driving community bank consolidation and limiting new bank startups.
“While community banks remain resilient in the face of regulatory and economic pressures, it defies reason to suggest that their growth and ability to serve customers has been unhurt by Dodd-Frank and the massive regulatory burden it represents,” Nichols wrote. “The forces that have acted to stop new bank charters are the same ones that have led to the dramatic consolidation of the banking industry — excessive and complex regulations that are not tailored to the risks of specific institutions.”
Nichols emphasized that America needs banks of all sizes and that community banks play a unique and vibrant role in our financial ecosystem. “We cannot afford to be sanguine about the disappearance of so many essential banks,” he said. “Unless we slow the trend, communities will feel bankers’ absence.”