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> We could have easily picked main street banks over wall street banks. If there aren't any community banks, it's pretty hard to choose them. Dodd-Frank, acco
by bmelton 10y ago
> We could have easily picked main street banks over wall street banks.
If there aren't any community banks, it's pretty hard to choose them. Dodd-Frank, according to many -- including Barney Frank, the "Frank" in Dodd-Frank -- had a number of unintended consequences, the largest of which was the compliance cost, which smaller banks couldn't manage.
The result of burdensome compliance, more often than not, was consolidation; couple that with the too-low threshold for what counts as 'too big' and the end result was that most community banks were too small to succeed - where we once had 18,000 main street banks in America as of 1985, we currently have fewer than 2,000.
- wlll 10y agoIt would be interesting to see the number of banks pre and post Dodd-Frank, say 2010 -> now to really gauge the impact. It would have taken a remarkably foresightful bank to close in 19xx on account of law passed in 2010.
- astrostl 10y agoGraph with citations at http://www.unbiasedamerica.com/media/say-goodbye-to-small-banks http://www.unbiasedamerica.com/media/say-goodbye-to-small-ba...
- TimJRobinson 10y agoI had a look at the sources for that post and couldn't find anything showing small banks growing up to 2008. https://fred.stlouisfed.org/series/US1NUM https://fred.stlouisfed.org/series/US1NUM (from exploring citation #4 in the post) was the closest I could find and that shows that over the long term small banks have been in decline since the 80's.
- KirinDave 10y agoIs that really true though? The majority of Credit Unions in the US don't exceed the asset pool size or have offices in designated areas. It's only if they're doing a lot of home loans or student loans that they might still get entangled. The small credit unions are in aggregate a very big lobby in Washington and they were pretty good at getting small members exempted. DF and CARD were mostly about stopping egregious behavior by very large FIs.