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Have you talked to your legislators lately?

July 11, 2013 by Kevin Christensen — Vice President, Audit, SHAZAM

Just like average Americans, U.S. financial institutions vary in how involved they like to get in the world of law-making. Whereas some take full advantage of the democratic process, others prefer to verbalize their views only in extreme circumstances.

While some may take issue with a characterization of the Dodd-Frank Act as an extreme circumstance, the legislation has inspired more than one community bank or credit union leader to voice an opinion.

Unintended consequences of the legislation continue to rear their head, causing many more FIs to connect with their trade associations and legislative representatives. If you're one of these leaders, you are to be commended. Keep it up.

If you'd like to become more like one of these leaders and are looking for inspiration, how's this: A recent report concluded that the Dodd-Frank Act "is making it harder for small businesses and people in rural areas and small towns to access financial services."

According to an American Bankers Association article about the report:

As a result of this burden, the report found, many small banks will see their profit margins fall and either close or merge.

The report's authors argued that this will result in greater concentration of assets among large banks and inadequate service to "small businesses and individuals who do not fit neatly into standardized financial modeling, or who live outside of metropolitan areas served by larger banks.

Because everyone can agree on the merits of the Dodd-Frank Act's spirit — namely, to protect consumers — it's critical that the legislators and regulatory bodies charged with enforcing the law truly understand its impact.

About Kevin Christensen

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