The consolidation of community banks is due to excessive regulatory costs, ABA President and CEO Frank Keating said in an appearance on Bloomberg’s “Bottom Line” program.
Noting that we have lost, on average, one bank per weekday since 2008, he emphasized that “many of them were merged or sold because of the regulatory burden — 15 to 20 percent of your operating income going to compliance. That’s silly, and I hope the regulators would recognize that to stifle a vital part of the financial services marketplace is not in the country’s best interests.”
Keating also discussed the housing market. He observed that sluggish wage and job growth, as well as student debt, are inhibiting the market, but he also fingered the Dodd-Frank mortgage rules, which he called “pretty strict” in their check-the-box limitations.
Watch the video.