Treasury touts Dodd-Frank impact on community banks

The deputy secretary — who a day earlier defended the pace of the Wall Street reform law implementation — specifically said the legislation, among other things, rolls back funding advantages bigger banks had before the financial crisis and aims to shield community banks from “excessive supervisory burdens.”

Lawmakers on both sides of the aisle, and Treasury, have stressed that smaller banks were not the cause of the crisis. But some Republicans have also fretted that Dodd-Frank puts community banks at a competitive disadvantage. 

For its part, the American Bankers Association has called Dodd-Frank’s regulatory burdens on community banks “oppressive.” Federal Reserve Chairman Ben Bernanke has said an exemption on new debit-card fee limits for small banks might not be as effective as hoped, though he has also said community banks will see a “more level playing field” because of Dodd-Frank.

In the post, Wolin also noted that Dodd-Frank increased deposit insurance protection and said the law allowed community banks to better compete with payday lenders and independent mortgage brokers.