Kathryn Milani is a Program Director for the Roosevelt Institute. The post—Community Banking is Alive, Well: The Three Myths about Dodd-Frank and Community Banks—is based on her remarks given at a House of Representatives briefing on the 2007-08 Financial Crisis and the current state of financial reform:
There is ample media coverage and anecdotal claims from the banking industry that Dodd-Frank is bad for community banks. It's politically challenging to counter this narrative because nearly every county in the US has a community bank, and, in turn, every member of Congress has at least one community bank as a constituent. But, if you look at the best available data on the state of community banking, it becomes difficult to buy the story that Dodd-Frank hurts community banks. The data doesn't support the claim.
To begin, let's set the record straight on the facts.
Community bank profitability is up. The FDIC's most recent report showed community banks' net income rose 10.4 percent from last year. Its 2016 quarterly profile on FDIC-insured banks found community bank revenue and loan growth outpaced the industry at large. Since Dodd-Frank was passed in 2010, aggregate profit of FDIC-insured banks, including community banks, has followed an upward trajectory.
Bank lending is up. The same FDIC report found the annual loan growth rate at community banks outpaces that of non-community banks. Loan balances for community banks rose by 7.7 percent over the past 12 months. This is more than twice the loan growth in large banks, which was 3.3 percent. Over 75 percent of community banks increased their loan balances from a year ago.
Despite this evidence, a concerted narrative pushed by the banking industry and its lobbyists has successfully convinced policymakers that regulatory relief is needed for community banks. This narrative can be boiled down to three unfounded claims: 1)Dodd-Frankis an unfair one-sized-fits-all reform that treats large and small banks the same; 2) this has prohibitively increased compliance costs for community banks, making them unprofitable and unable to lend; and 3) this has resulted in the rapid disappearance of small community banks as they are forced to merge with one another or be acquired by large banks. All three are myths and here's why. [...]
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TOP COMMENTS • HIGH IMPACT STORIES • SUNDAY TALK
QUOTATION
“How are you going to kill this guy and still say we have a fair system? How? Man, this behavior has gotta stop, and they can’t stop so they are going to continue to kill us. We haven’t progressed. … If you can kill me, with a baby in the back seat of a car, and get away with it, not guilty of any wrong doing? I can’t honor that system, and I won’t.”
~Jason Sole, president of the Minneapolis NAACP, commenting on the not guilty verdict for the police officer who shot Philando Castile
TWEET OF THE DAY
BLAST FROM THE PAST
At on this date in 2008—Clear Evidence of War Crimes: Stern Letters to Come?
It is impossible to escape a mixture of sadness and fury while reading the 149 horrific pages of the just-released report published by Physicians for Human Rights and called Broken Laws, Broken Lives: Medical Evidence of Torture by the US. Sadness for the victims. Fury for the fact that American citizens have paid for the ghastly criminal acts of guards and interrogators at U.S.-run prisons in Abu Ghraib, Guantánamo Bay, and Afghanistan. Sadness that Americans are now seen as torturers worldwide. Fury that high officials who ordered these acts are not digging holes and filling them up every day on some penal atoll.
The torture those officials authorized has been revealed over the years in bits and pieces. We’ve seen the photographs. Newspaper stories, magazine articles and a dozen books have been written. There have been previous scathing reports, including two by PHR. The American Civil Liberties Union and the Center for Constitutional Rights have delved into the matter. There was, of course, the Army’s 2004 investigation into what happened at Abu Ghraib. And, better late than never, Senator Carl Levin began presiding Tuesday over three days of hearings on the subject, Inquiry into the Treatment of Detainees in U.S. Custody.
For the first time, however, Broken Laws, Broken Lives has added grim evidence gleaned from medical tests, both physical and psychological, of 11 former detainees. Unique stories, but with a theme that cannot - and must not - be ignored. The evidence was gathered and evaluated under strict internationally recognized standards and procedures for determining whether someone has been tortured or ill-treated and for documenting the consequences in a manner so that the results can be used in court. These standards are part of the Istanbul Protocol, Manual on the Effective Investigation and Documentation of Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, adopted by the United Nations in 1999.
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