Growing up, there was a different kind of relationship we all had with the bank.

It stood at the heart of business decisions and opening your first checking account was a rite-of-passage into adulthood.

You knew your local banker, and they knew you. You chatted, shared a laugh and sometimes argued about getting credit.

Those days are gone, and great, because I hated those bankers. That banality grinded my nerves and I love the online options. 

But, unlike me, and for so many others, their community bank provided a vital life support to their bread-and-butter businesses.

Yesterday, Richard Bove, an equity research analyst at Rafferty Capital Markets, didn't mince words, saying his initial judgment of the Dodd-Frank Act as the worst piece of legislation in history was wrong: It’s actually worse than that.

Former chairman of the Federal Reserve, Alan Greenspan, is arguing in the Financial Times that adding more capital to the system would help ease the pain caused by the burdensome regulatory environment levied by Dodd-Frank.

This conversation was nicely complimented by one of the more thoughtful articles on the topic in today’s American Banker.

In that, Victoria Finkle asks is Dodd-Frank really killing community lending?

Maybe, maybe not, Finkle writes.

“It's worth noting that while the number of financial institutions continues to decline, the financial services sector is growing,” Finkle writes. “The spoils are simply shared among fewer players.”

But to answer the article’s main inquisition about whether or not Dodd-Frank is definitively killing community banks: Yes, it is.

It may not have started the hemorrhage, but it’s advent certainly induced hemophilia.

The result? An acceleration in the decline of each and every American town without a "too big to fail" in its area.

(See Finkle’s piece for more data and instances of Dodd-Frank killing community lending.)  

So all this leads to one important question. Can the financial system be cured properly? Greenspan's model presumably only supports the big banks even more, so that's not the best solution.

Indeed, it can be cured, but in an equally unsettling way.

The best answer, so far, is summed in a note from Bove today, albeit about rise in the Chinese shadow banking system.

“The United States has turned back the financial regulatory system to the late 19th century a period characterized by financial collapses and failures. Many economic historians argue that the period from 1873 to 1896 was one long depression in this country and the United Kingdom. We are reinstituting the financial system that existed at that time.”

So once the house of cards collapses and this country’s liquidity locks up (remember how the Credit Crisis really started?) and we are deeply, firmly mired in our next recession, the wisdom of Dodd-Frank will be fully revealed as the destructive mechanism it actually is.

Then, and only then, Bove says, will the financial system finally get right-minded.

"Most people I speak with claim that one should not worry because when the next recession arises the United States will dump the regulations it has put in place at present and re-institute the protections in the system that existed prior to 2008," Bove said.

Fasten your seatbelts, because it's going to be a bumpy correction.