Article Citation
The Impact of Dodd-Frank on Community Banks. (2016). Journal of Taxation & Regulation of Financial Institutions, 29(3), 49-51. I located this article by searching in the Bellevue University’s online library tool with the key words “Dodd-Frank” “Impacts” and then filtered for scholarly articles published in 2015-2016.
Main Issue of Article
Although the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2012, also known colloquially as “Dodd-Frank”, was written to address the issues plaguing the large banks deemed “too big to fail”, there were downstream ramifications to the medium and small sized “community” banks as well. This article is a summarization of the Government Accountability Office’s (GAO) report entitled …show more content…
These changes were significant to loan origination, loan servicing and loan administration for banks. Additionally, there were operational changes to escrow calculations and appraisals for higher priced loans.
Finally there were Dodd-Frank rules relating to banks’ non-mortgage business as well. The article specifically mentions rules relating to removal of credit ratings, remittance transfers and debit interchange and routing. All of these also required additional compliance considerations and modifications to credit risk determinations. No longer could banks rely solely upon credit ratings to evaluate their risk, so initiating loans became much more cumbersome to the banks.
Furthermore, the article reprinted the Government Accountability Office’s (GAO) four indicators to assess the burdens of Dodd-Frank on community banks: “(1) the number of employees; (2) a measure of labor and other noncapital costs; (3) profitability; and (4) residential mortgage lending” and made several conclusions about the impacts and hardships that Dodd-Frank has imposed upon community banks” (United States Government Accountability, 2015).
Relationship to …show more content…
assets over $10 Billion, under Dodd-Frank a single U.S. Intermediate Holding Company (IHC) was required to be created and is subject to heightened capital, liquidity, risk management and stress testing requirements.
Dodd-Frank was an extraordinary rewrite of the rules and regulations covering not only Wall Street but the mortgage industry as well. The mandate by the federal government required a massive procedural transformation of banking systems. The Act has resulted in increased scrutiny of lending behavior and an amendment to the Home Mortgage Disclosure Act (HMDA) to significantly increase the information reported to the federal government.
References
The Impact of Dodd-Frank on Community Banks. (2016). Journal of Taxation & Regulation of Financial Institutions, 29(3), 49-51.
United States Government Accountability Office, Dodd-Frank Impacts on Community Banks, Credit Unions and Systemically Important Institutions, Rep. No. GAO-16-169, at 120
The Impact of Dodd-Frank on Community Banks. (2016). Journal of Taxation & Regulation of Financial Institutions, 29(3), 49-51. I located this article by searching in the Bellevue University’s online library tool with the key words “Dodd-Frank” “Impacts” and then filtered for scholarly articles published in 2015-2016.
Main Issue of Article
Although the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2012, also known colloquially as “Dodd-Frank”, was written to address the issues plaguing the large banks deemed “too big to fail”, there were downstream ramifications to the medium and small sized “community” banks as well. This article is a summarization of the Government Accountability Office’s (GAO) report entitled …show more content…
These changes were significant to loan origination, loan servicing and loan administration for banks. Additionally, there were operational changes to escrow calculations and appraisals for higher priced loans.
Finally there were Dodd-Frank rules relating to banks’ non-mortgage business as well. The article specifically mentions rules relating to removal of credit ratings, remittance transfers and debit interchange and routing. All of these also required additional compliance considerations and modifications to credit risk determinations. No longer could banks rely solely upon credit ratings to evaluate their risk, so initiating loans became much more cumbersome to the banks.
Furthermore, the article reprinted the Government Accountability Office’s (GAO) four indicators to assess the burdens of Dodd-Frank on community banks: “(1) the number of employees; (2) a measure of labor and other noncapital costs; (3) profitability; and (4) residential mortgage lending” and made several conclusions about the impacts and hardships that Dodd-Frank has imposed upon community banks” (United States Government Accountability, 2015).
Relationship to …show more content…
assets over $10 Billion, under Dodd-Frank a single U.S. Intermediate Holding Company (IHC) was required to be created and is subject to heightened capital, liquidity, risk management and stress testing requirements.
Dodd-Frank was an extraordinary rewrite of the rules and regulations covering not only Wall Street but the mortgage industry as well. The mandate by the federal government required a massive procedural transformation of banking systems. The Act has resulted in increased scrutiny of lending behavior and an amendment to the Home Mortgage Disclosure Act (HMDA) to significantly increase the information reported to the federal government.
References
The Impact of Dodd-Frank on Community Banks. (2016). Journal of Taxation & Regulation of Financial Institutions, 29(3), 49-51.
United States Government Accountability Office, Dodd-Frank Impacts on Community Banks, Credit Unions and Systemically Important Institutions, Rep. No. GAO-16-169, at 120