Senators from both parties questioned whether the regulatory burden on community banks was too heavy during a Senate Banking Committee hearing yesterday on community bank performance.
“The regulatory framework that emerged out of Dodd-Frank has made it increasingly difficult for community banks to operate and maintain business presence in many communities,” said ranking member Mike Crapo (R-Idaho). "Community banks are disproportionately affected by increased regulation because they are less able to absorb additional costs."
During testimony, officials provided an overall optimistic view of community banks’ performance without significantly addressing regulatory burden.
FDIC Chief Economist Richard Brown noted that community banks continue to play a “crucial role,” representing 95% of all banking organizations, 46% of small loans to businesses and farms and a majority of deposits in rural areas and small cities.