Dodd-Frank Takes Banking Back To Horse-And-Buggy Days


Regulation: To understand how far Dodd-Frank set back the financial industry, look at the first bank to open in the country since that legislation became law in 2010. It is literally a horse-and-buggy operation.

Dodd-Frank was sold as the salvation of America’s wayward financial system. President Obama hailed the “reform” as a measure that would prevent another crisis like the 2008 meltdown.

Despite the promises, Dodd-Frank fixed nothing. As we predicted in 2010, it was simply “2,319 pages of unintended consequences for the economy.”

Of the many negative effects of Dodd-Frank, one is its disincentives for opening new banks.

In fact, the only bank that has opened since Obama signed the bill is the Bank of Bird-in-Hand located in Bird-in-Hand, Pa., a small village in Amish country. A second bank was approved last month by the FDIC and will open in May or June in Bedford, N.H.

Dodd-Frank’s compliance burden is heavier on small banks than larger ones, which are better financed and staffed to handle the costs and complexities. Given this difficult environment, why would anyone open a small bank — which is to say, why would anyone open a bank at all, since no one starts out opening a large bank?…



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