By Victoria Finkle, American Banker
WASHINGTON — Regional banks above the Dodd-Frank Act’s $50 billion threshold are paying a heavy cost for the added burdens placed upon them by the regulatory reform law, a top executive told Congress on Tuesday.
Deron Smithy, executive vice president and treasurer of Regions Financial, said compliance costs across the 20 regional banks that are above the target have jumped by $2 billion, with his bank alone spending roughly $200 million in added costs.
Speaking before the Senate Banking Committee, he said Regions has about 100 employees that are actively working on the Fed’s stress tests, which all banks above the threshold must take, with another 150 partially involved in new compliance duties.
“One of the more important elements of this are the indirect costs, which are management and the board’s time away from serving the needs of our customers and serving our communities,” said Smithy, who represents the Regional Bank Coalition, a newly formed group of mid-sized banks.