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America’s largest banks have the resources to comply with the 83 million paperwork-hours and $39 billion in costs imposed by Dodd-Frank. But small and mid-sized banks do not.

Nearly a decade has passed since Dodd-Frank became law. This controversial bill — which was jammed through Congress with almost no weigh-in from Republican lawmakers — was designed to increase oversight of America’s largest banks. In theory, the law would strengthen our financial system; in practice, it has been an unmitigated disaster, especially for small and mid-sized banks, which have borne the brunt of the regulatory burden.

America’s largest banks have the resources to comply with the 83 million paperwork-hours and $39 billion in costs imposed by Dodd-Frank. But small and mid-sized banks do not. Indeed, the law has all but regulated smaller banks into oblivion. To conform with the estimated 22,000 pages of regulations introduced by Dodd-Frank, community banks have been forced to divert precious resources to shore up their compliance staff. And when small financial institutions are unable to front the costs of regulation, they have no choice but to reduce the scope of their business or close shop completely.

The fallout from Dodd-Frank has been acutely felt right here in Utah. Since 2010, the number of FDIC-insured commercial banks in our state has dropped from 53 to 42. During a similar time span, the number of NCUA-insured credit unions fell from 94 to 66. Fewer community financial institutions leads to less competition, making it more expensive for Utahns to purchase a home or start a business.

Banks and credit unions across the state have described how Dodd-Frank has subjected customers to more paperwork, longer wait times and slower services. This bureaucratic mess causes headaches for Utahns under the best of circumstances and financial troubles under the worst.

The good news is there is a commonsense alternative to Dodd-Frank. Congress can implement sensible reforms to simplify America’s financial rulebook, ease the burden on small and mid-sized financial institutions and help grow the economy. My priorities for reform have consistently been regulatory relief for small and mid-sized financial institutions and a renewed focus on responsible and efficient regulations.

To address the difficulties faced by small and mid-sized financial institutions, the Senate this week is debating the Economic Growth, Regulatory Relief, and Consumer Protection Act, which includes a number of my legislative priorities. This bipartisan bill applies lessons learned from the last eight years under Dodd-Frank to right-size existing regulations while maintaining the safety and soundness of the financial system.

Let me be clear: This bill is not some gift for Wall Street; rather, it is designed to provide appropriate regulatory relief to small and mid-sized financial institutions, the kind that most Utahns utilize. It simplifies capital requirements for small banks, allows banks under $10 billion to engage in a wider range of financial activities, and exempts regional financial institutions from enhanced regulations and costly stress tests designed for the largest, globally interconnected banks.

16 comments on this story

In today’s era of extreme partisanship, this bill is a breath of fresh air. What the Senate has been able to accomplish this week is based on sensible debate, reasonable compromise and hard policy choices. While there remain other reforms that could relieve the stress of overburdensome regulations, this bipartisan bill is a much-needed start.

I commend my colleagues on both sides of the aisle for their work and am pleased to have a number of my priorities included that will benefit Utah. It is time for the House of Representatives to take up the Senate bill and provide commonsense regulatory relief for the American people.