Dodd-Frank Rollback Gets Positive Reaction From Oklahoma Community Banks

May 24, 2018


On Thursday President Trump signed legislation loosening the Dodd-Frank banking regulations enacted in the wake of the 2008 financial crisis. The bill raises the threshold for banks considered “too big to fail,” exempting them from regulations like higher cash-on-hand requirements and increased mortgage loan scrutiny.  

These are changes that Craig Buford, the president of the Oklahoma Community Banker’s Association, has been pushing for since the Obama administration. He says complying with Dodd-Frank is onerous for the local banks he represents.

“Trying to comply with those laws becomes a huge piece of their budget, whereas the ‘too big to fail banks,’ that’s just a blip on their profit-loss statement,” Buford said.

According to Buford, Dodd-Frank caused community banks across the nation to merge or seek acquisition, although that hasn’t happened in Oklahoma.

“You see more and more community banks merging or selling to the larger banks,” Buford said. “We're very blessed in Oklahoma. We still got somewhere in the neighborhood of over 200 charters that are strictly, purely Oklahoma community banks, but we do still see some mergers here in other states.”

Buford says many of the banks he represents have stopped lending to those struggling to access credit from commercial banks.

“Historically the bread and butter of a community bank has been making home mortgage loans to people living in their community. These may be small business people who don't have a regular paycheck and a W2 form, but the bank knows and they know they can make the payments,” Buford explained.

The community bank issue garnered bipartisan support — 33 House Democrats and 17 Senate Democrats voted in favor of the legislation. But critics have pointed out that the legislation exempts most institutions — not just community banks — from the increased federal oversight meant to prevent another financial crisis.

“It’s a bad bill under the guise of helping community banks,” said Democratic House Minority Leader Nancy Pelosi of California during debate on the House floor on Tuesday. “The bill would take us back to the days when unchecked recklessness on Wall Street ignited an historic financial meltdown.”

Moving forward, just 10 banks will be subject to all of Dodd Frank’s stringent oversight.

For Buford and other supporters, this is just the beginning.

“We're a long ways from from paring down just the onerous and burdensome regulation that's been put on community banks,” said Buford.