Community banks continue to experience increases in compliance burdens associated with Dodd-Frank Act rules, the Government Accountability Office said in its annual report on Dodd-Frank regulations.
In a survey of several community banks and credit unions, the GAO found that a number of institutions have seen an overall increase in compliance costs, including the amount of staff, training and time allocated to meeting regulatory standards, and that in some cases banks have seen declines in specific business activities as a result of new rules.
Banks specifically noted increased costs related to the CFPB’s new TRID rule and regulations related to escrow accounts, appraisals for higher-priced loans and mortgage servicing. They also expressed concern that the Ability to Repay/Qualified Mortgage rule standards could restrict mortgage lending, with many stating they have already scaled back on making non-QM loans due to liability concerns. The report pointed out, however, that agency data thus far have not reflected this.
Commenting on the findings, ABA EVP Wayne Abernathy said that the GAO report is yet another confirmation of the toll excessive regulation is taking. “This report continues to add to growing evidence of the cost of regulation on bank customers, including customers of community banks,” Abernathy said. “The impact and the need for regulatory reform are becoming harder to ignore.”
Read the report.