MortgageReverse

Bankers on Dodd Frank: Very Few Positives, Whole Lot of Risk

A Stifel Financial industry update circulating last week among big banks and financial institutions shows “many negatives and few positives” on the implementation and outcome of Dodd-Frank. From banks’ reputations to regulator distrust and restricted credit availability, the report points to more than a handful of challenges bankers, including mortgage lenders, are facing in light of the legislation enacted by the law. 

“Since its passage in mid-2010, Dodd-Frank has fostered over 6,000 pages of proposed rules and regulations,” the Stifel report writes.”As of year-end 2011, the country’s 6,300 commercial banks employed an average of 310 employees. Needless to say, the typical small community bank is struggling to cope with the avalanche of regulations flowing out of Washington currently. To the extent these institutions are pre-occupied with regulatory compliance, they are less focused on extending credit.”

Further, Stifel finds, costs are likely to increase noticeably in the wake of 300 additional rule makings that have yet to take place. Pointing to the big, unintended consequence, the report shows the dichotomy between CFPB’s help of consumers and its role in government of banks and other financial companies. 

“From our perspective, the over-arching risk we foresee is that CFPB becomes a governmental tool for consumer activists rather than an unbiased enforcement agent within the financial services markets,” the report states. 

Written by Elizabeth Ecker

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please