Free Republic

A coming change in accounting standards could do irreversible damage to community banks, U.S. Rep. Scott Tipton, R-Colo., said in a letter to the Financial Accounting Standards Board. An accounting-standards update due to be issued by the board would change the way all lenders set aside reserve funds in anticipation of possible losses. The board, wrote Tipton and Rep. Patrick Murphy, D-Fla., should take "utmost caution" in proceeding because it has the potential to "irreversibly damage community banks' and credit unions' ability to continue to adequately serve their customers/members and communities and sustain the economic recovery." ... Tipton, a member...

financial reform increases staffing costs. Small banks are struggling to comply with the Dodd-Frank Act, which was passed to regulate the financial industry in the wake of the 2008 financial crisis, said Rep. Scott Tipton. The Republican from Cortez received some national attention this week for challenging Federal Reserve Chairwoman Janet Yellen to support his plan to ease the burden of Dodd-Frank on small banks. ... Mike Burns, president of Alpine Bank for the Southwest region, said in a phone interview that Dodd-Frank is creating head winds. “We really want to focus our time and energy in supporting the communities...

He is America’s most iconic banker. Okay. He isn’t a real banker, but we all know and love him; he’s George Bailey from the quintessential Christmas movie It’s a Wonderful Life. Bailey, the local banker from Bedford Falls, N.Y., confronts slumlord and all-around bad guy Henry Potter for control of his father’s bank, Bailey Building and Loan. Potter tries to bribe Bailey, then tries to steal the bank from the young idealist and businessman. It was a movie, and it was the 1940s, so the good guy won. George Bailey got the bank and the girl, and the bad...

My colleagues Hester Peirce and Robert Greene have put together a series of charts showing the recent concentration of the U.S. banking system — small banks are disappearing and large banks are growing in number. Here is one of their charts that shows the changes: Repeated waves of bank regulation — most recently Dodd-Frank — can be particularly burdensome for small banks. Peirce and Green explain: Regulatory compliance can be a particular challenge for small banks with limited compliance expertise. Regulatory expenses absorb a larger percentage of small banks’ budgets than of their larger counterparts’ budgets. Although correlation is not...

Do we need to worry about Too Small to Survive? Now that President Obama has been re-elected, analysts, consultants and dealmakers have turned from whether Dodd-Frank will be repealed to what it means for banks now that it's likely here to stay. The overwhelming conclusion: Thousands of small banks will soon disappear. Emmett Daly, a Sandler O'Neill dealmaker who specializes in small banks, predicted at an industry conference put on by Mergermarket on Thursday that the number of banks in the U.S. would shrink to a few hundred. There are currently more than 7,000. Bill Egan, head of financial institutions...

Bet you thought Dodd-Frank was just designed to go after those greedy banks on Wall Street didn’t you? Well, there are always unintended consequences of regulation. Dodd-Frank is one of the worst bills ever passed by a Congress in the history of the United States. Not only is it proving to restrict access to money by poor people, it is imposing crushing costs on smaller banks-effectively putting them out of business. This makes access to capital even tougher, because instead of going to a small bank where you can develop a relationship, a businessman now needs to go to a...