In a recent hearing on community bank regulations, the outspoken lawmaker claimed Dodd Frank has helped benefit community banks and small lenders rather than big banks.
Last week, Sen. Elizabeth Warren (D-Mass) claimed the 2010 Dodd-Frank Wall Street reform law has helped benefit community banks and small lenders rather than big banks.
Warren, an outspoken lawmaker for the mortgage industry, made the statement at a Senate Banking Committee hearing on community bank regulations, where she also rebuked Daniel Blanton, chairman-elect of the American Bankers Association (ABA), who testified according to The Hill.
“If you claim community banks were particularly hard hit by Dodd-Frank’s new rules,” Warren asked Blanton, “why are they making more money since the rules went into effect and doing much better than big banks?”
Blanton, as well as community banking representatives, have stood up for exemptions from parts of Dodd-Frank, like mortgage lending stipulations that they said should be applied only to big banks. They are afraid that small and medium banks will feel the repercussions from the big banks’ role in the 2008 economic collapse.
Warren demonstrated small banks have been profitable since the financial collapse by pulling data from the Federal Deposit Insurance Corporation (FDIC). The information showed community bankers’ earnings increased at a higher rate in 2014 than in the banking industry as a whole, according to The Hill.
Blanton retorted, stating that he did not believe the regulations were making the banks do better. He claimed the process to do mortgages was even more difficult due to the regulations.
“We should be very skeptical of regulatory relief bills that are promoted as helping small banks, but are pushed by ABA lobbyists for the big banks,” said Warren, speaking to her accusation at the hearing that big banks were using small banks to weaken regulations.
Warren also said at the hearing that many bank lobbyists do not necessarily have the interests of community banks at the forefront, as they may portray.
Recently, the Consumer Financial Protection Bureau proposed to tweak mortgage regulations for smaller lenders, a victory for smaller banks and mortgage companies.
