ABA to Community Banks: Beware the ‘Avalanche of Regulation’

avalanche of regulationThe American Bankers Association (ABA) indicts excessive regulation of community and regional banks as “overwhelming.”

An Avalanche of Regulation

The ABA is concerned that community banks are facing an avalanche of inefficient and unsuitable government regulations—and that those burdensome policies hinder banks as they drive America’s economic growth and job creation.

A recent ABA publication, An Avalanche of Regulation, illustrates banks’ regulatory challenges with charts, graphs, and statistics.

The four-page brochure examines the unintended but unavoidable consequences of new regulations on small banks: staff hours spent on compliance-related tasks; discontinued lending services and consumer financial products; consolidation of community banks; and increased competition from less-regulated “shadow banking” businesses.

An Avalanche of Regulation is available as a free PDF download.

The ABA says that “managing the avalanche of new regulation has imposed tremendous costs for banks of all sizes, both in terms of dollars paid and services and products they are able to offer their customers.” The brochure predicts that, “ultimately, the cost of over-regulation will be felt by bank customers in the form of restricted credit and fewer services and products available.”

The Fed is aware of the Regulatory Avalanche

During his service as chairman of the Federal Reserve, Ben Bernanke lamented the burden imposed on small and medium-size banks. “As battle-scarred survivors of a financial crisis and deep recession, community bankers today confront a frustratingly slow recovery, stiff competition,… and the responsibility of complying with new and existing regulations,” Bernanke told a Saint Louis, Mo., audience of community bankers.

“Some observers have worried that these obstacles—particularly complying with regulations—may prove insurmountable.”

Download the free ABA guide, An Avalanche of Regulation.

avalanche of regulation

Related Posts