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Survey Finds Major Dodd-Frank Impact on Community Banks

Posted on 3/3/2014

The Dodd-Frank Act is having a significant impact on community banks and their customers, according to a study of 200 banks with under $10 billion in assets released last week by the Mercatus Center at George Mason University. ABA encouraged bankers to participate in the survey last summer.

Among the highlights of the survey:
83 percent of respondents reported seeing compliance costs go up by more than 5 percent since 2010.
93 percent said Dodd-Frank was as burdensome or more burdensome than the Bank Secrecy Act, with 66 percent reporting that it was substantially more burdensome.
More than 70 percent added at least one full-time employee due to CFPB requirements, and more than 20 percent added two.
71 percent reported that their business activities have been altered due to CFPB action.

"Participating banks reported substantially increased compliance costs in the wake of new regulations," the researchers found. "These costs include hiring new compliance personnel, increased reliance on outside compliance experts, additional resources allocated to compliance, and more time spent by noncompliance employees on compliance. The increased regulatory burdens have led small banks to reconsider their product and service offerings, including considering whether to stop providing residential mortgages and overdraft protection."

To view the survey visit: http://mercatus.org/publication/how-are-small-banks-faring-under-dodd-frank



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