The American Bankers Association has a bone to pick along with the CFPB, according to Investor’s Business Daily. Community banks and credit unions suspect over one thousand of their kind will cease to exist, thanks to what they see as over-regulation from the Dodd-Frank Act. Regulatory control unchecked – that’s what the ABA calls the big Dodd-Frank gun in the CFPB’s hands.
The new adjustment is coming
All U.S. Financial institutions should watch out since “change is coming” and they’ll have to follow new rules, according to interim chief of the CFPB, Elizabeth Warren. More than half of the Customer Financial Protection Bureau’s spending budget will be directed at supervision and enforcement, a fact Warren has used on multiple occasions to accentuate talk of the fervor with which the Consumer Financial Protection Bureau will defend the financial rights of United States consumers.
Future of banks not looking good
Many of the ABA representatives explained that the Dodd-Frank rules could be devastating to banks. Over 1,000 could go out of business before the end of the decade with the rules. Any information requested, in any format requested, must be given to the CFPB by banks. The resources taken to put this together could possibly be devastating to small banks. The Consumer Financial Protection Bureau will probably make an effort to figure out if discrimination is taking place by asking the banks to get even more information about a borrower’s demographics in order to stop predatory lending with the Home Mortgage Disclosure Act.
According to Investor’s Business Daily, ABA Chairman Stephen explained that this is bad for credit unions and small community banks. They will make the loans larger banks won’t much of the time. It would be hard if small banks started to shut down. There would be fewer places to get capital. Wilson explains that customers will end up with higher rates and fees this way.
“If we tie up our capital system, it’s going to take money away from the people who need it to create jobs,” warned U.S. Chamber of Commerce President Tom Donohue.
Director of the Consumer Financial Protection Bureau hasn’t been picked yet
The Consumer Financial Protection Bureau does not have a chairman still even though it is expected to launch on July 21. President Obama will probably nominate Warren although lawmakers are not so keen on the idea if they support the banking industry. Warren states that her goal is to make the CFPB “toothless” although Republicans are concerned too much power is being given to the Consumer Financial Protection Bureau.
In just two and a half years, the Sarbanes-Oxley Act of 2002 changed sixteen rules. The Dodd-Frank Act will require more than 250 rule changes over several years.
Information from
American Bankers Association
aba.com/default.htm
Florida Realtors
floridarealtors.org/NewsAndEvents/article.cfm?id=259538
Investor’s Business Daily
investors.com/NewsAndAnalysis/Article/572889/201105201812/1000-Small-Banks-May-Be-Shut-Down-Due-To-Dodd-Frank.htm
SEC
sec.gov/about/laws/soa2002.pdf
Rep. Sean Duffy (R-Wisc.) fights for community banks and credit unions
youtube.com/watch?v=8yqmp_kIucQ
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