More Evidence Destroying the White House’s Spin on Dodd-FrankPosted by on August 19, 2016
Community bankers, credit union leaders and small business owners told us that’s absolutely not true.
Today’s report from Bloomberg (Headline: Bank Mergers Heading for Seven-Year High, Pushed by Costly Rules) once again exposes how feeble the White House’s spin is:
Here’s an irony: U.S. regulators looking to avoid bailouts of too-big-to-fail banks have passed so many rules that regional and local lenders are combining to stomach the costs.
The result: Banks are bulking up.
Mergers and acquisitions by U.S. banks surged last year to about $18 billion, the highest level since 2009. This year, firms are set to fly past that mark, according to data compiled by Bloomberg. In nine of the 10 biggest deals completed in 2016, banks selling themselves cited heightened regulatory burdens as a driver, Securities and Exchange Commission filings show. The extension of low interest rates is compounding that pressure by eroding profits.
The regulatory pressures forcing small banks to sell can have an unfortunate effect on local economies, said Bill Hickey, a principal and co-head of investment banking at Sandler O’Neill.
“They’re the pillars in their communities,” Hickey said of the lenders. “When a community bank goes away, that generally is not a good thing.”
“Regulation has been a story of unintended consequences and bureaucrats rarely getting anything right,” said Jeff Davis, managing director at Mercer Capital, a business valuation and advisory firm.”
Contrary to what the White House would lead you to believe, the $400 million to Iran was ransom, you can’t keep your health care plan if you like it, and Dodd-Frank is hurting small community banks, credit unions and Americans who want to achieve financial independence.