economic growth over the long run. Do those that passed the Act rather quickly and those that are interpreting the rules of the Act really understand what changes it might have on the banking industry, which has been the financial engine or the fuel for economic growth? We have not seen any significant economic growth since Dodd-Frank. That’s a concern I have as a banker.” Most banking experts agree that some changes need to be made to Dodd-Frank to maintain a healthy, balanced and competitive banking system. To get there, most say DoddFrank needs to be amended to lessen the burden on smaller and community banks. “I would also advocate reining in the power of regulators to deny banks the right to grow and expand their business, absent antitrust concerns,” Kaplan says. “These sorts of decisions on whether to grow, expand, add business lines and so forth are best made in a free enterprise system like ours by those who will primarily live with the economic consequences — the shareholders and management of banks. Kaplan said he would also be an advocate for the creation
of a regulatory oversight authority comprised of ordinary consumers, business people and bankers (no regulators) that would review the major decisions of bank regulators on applications and regulations and regularly report to the country on the efficacy and desirability of those application decisions and regulation. “(Dodd-Frank) has affected our policies, our procedures, our disclosures, our risk profile, and our ability to offer credit,” Wiest says. “I got into this business because of a banker. I was a 26-year-old single mother with no credit and a car that wouldn’t make it through another Midwestern winter when I received a miracle in the form of an income tax refund that gave me a down payment (for a new car). I went into the Delay Bank in Norfolk, Neb., where a guy named Gib Fisher talked to me about where I worked, why I didn’t have credit, etc. He said he would think about approving the loan and get back to me. He called back within 15 minutes and said he had spoken to my boss, who said I was a hard worker with a good future, so he was approving the loan ... Today, we have limited ability to help people. It makes me sad to think about it.”
What should be changed? Here is how experts say the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 should be changed to help the banking industry, while achieving what the legislation was intended to accomplish:
James Kaplan
Candace D. Wiest
John M. Randolph
Ed Zito
“Repeal the Volcker Rule. Lower the capital requirements for smaller banks that exhibited a lower risk profile. Re-focus the Consumer Financial Protection Bureau on substantive consumer protection rather than compliance and documentation and fear of enforcement that raises costs to consumers and discourages lending.”
“Banks like WVNB did not cause the meltdown. And if we would have failed, we would have had some very unhappy shareholders, but would not have brought down the economy of the free world. Tailor the regulations to the risk classes of banks present to the system. Let us help the people we were chartered to help.”
“In order for community banks to survive and continue to offer their traditional loan products, it will be necessary to create exemptions from the requirements of Dodd-Frank and the Qualified Mortgage Rules. Deviations from the one-size-fits-all methods of determining the ability to pay for community banks would be an important step.”
“Even as a $10 billion organization, we still think that a healthy banking system and a competitive banking system is one that needs to have the right balance struck, so we would be in favor of supporting lesser burden and amending Dodd-Frank to lighten the load on smaller and community banks.”
Partner, Quarles & Brady:
40 AB | November-December 2014
President and CEO of West Valley National Bank:
Member, Sherman & Howard:
President, Alliance Bank of Arizona: