Years after its passage, it’s becoming clear that some tweaking to Dodd-Frank may be in order, especially its tendency to view most banks as the same (with the exception of small community lenders).
Consider that the regionals’ lending business is mostly bread-and-butter company loans to their hometown areas. In addition, they are the opposite of “too big to fail” in terms of asset size. For example, the combined assets in the first quarter of 2016 for 11 major regional banks was $2.4 trillion, about the same as JP Morgan Chase, according to industry data collected by the coalition.
The regional players don’t have a beef with being required to have more cash on hand to cover potential losses.
But they do want to get out from under expensive regulatory requirements that automatically kick in when a bank is over $50 billion in assets. Just gearing up to meet those standards can cost a single banking group hundreds of millions of dollars in manpower, new technology and other compliance-related costs, says Colin Plunkett, a Morningstar equity analyst covering financials.
That’s money that could go toward business loans.
Read the rest of the story at Chicago Tribune.