By: Michelle Patana
Two years following the passage of Dodd-Frank, banks, credit unions, analysts and many lawmakers have yet to warm to the new regulations. In fact, it appears that many entities and groups have voiced their opposition more loudly as the effects of the reforms begin to impact various industries. Larger institutions argue that the provisions are too costly and may threaten their bottom lines, while smaller institutions say the regulatory and financial requirements of implementing the legislation may too burdensome and force many of them to close.
In response to a barrage of criticism over Dodd-Frank, the Senate Banking Committee is considering revisiting the landmark legislation to explore ways to make some provisions less burdensome. Paul Merski, chief economist for the Independent Community Bankers of America, told American Banker that Dodd-Frank has reached a point that warrants more scrutiny by lawmakers and possible changes.
"We're in a strange phase after the Wall Street reform act where a lot of the activity was in the regulatory arena. In other words, the timeframe was for the bank regulatory agencies to implement and flesh out the massive changes that Congress put into statute," Merski told American Banker. "We're kind of getting in the phase where Congress will have a second review of how these provisions that regulations have fleshed out are impacting the marketplace, and maybe make corrections where things are not working out."
Will the review be effective?
The committee has not yet set a concrete schedule for reviewing the reforms, but noted that an examination of the reforms as well as the mortgage lending standards will likely be placed on the group's calendar next year. Bank consultants say the review is likely now that the election is over and both parties are now taking a more objective view of the reforms and how Wall Street reform is truly impacting the economy, Main Street institutions, small businesses and consumers.
While the committee has expressed the possibility of examining the reforms, it has yet to carve out specific areas and provisions that will be up for review or given any indication of the scope of changes that may be made. As the legislation is several hundred pages long and one-size-fits-all changes may have a negative effect on certain entities, it is difficult to formulate a plan for tackling the groundbreaking legislation.