ABA Banking Journal - July/August 2015 - (Page 22)

FEATURE > EDWARD YINGLING Banking's Appalling Regulatory Structure The country needs a strong, competitive banking system that supports the economy and protects consumers. BY EDWARD YINGLING A S president of ABA during the financial crisis, I testified before Congress and appeared on TV on numerous occasions, during which I protested the overkill of the bill that became Dodd-Frank. At one point, I decided we needed to have a number for the pages of regulations that would result from Dodd-Frank. ABA's economists produced an estimate of 10,000 pages of new regulations for a community bank. I was not sure anyone would believe it, but we went with it. In fact, the estimate was too low. Certainly some of the reforms in Dodd-Frank were needed, but the massive overkill is both slowing economic growth and gradually driving many community banks to sell out. Therefore, it is not surprising that much of the industry focus in recent years has been on the avalanche of new regulations resulting from the financial crisis. The banking industry has been busy working on hundreds of proposed rules and trying to convince Congress to make some reasonable changes to Dodd-Frank and Basel III. 22 ABA BANKING JOURNAL | JULY/AUGUST 2015 Unfortunately, the wave of regulations continues to grow, and addressing it must continue to be the top priority. However, it is not too early to begin the debate on the other aspect of regulation that will hurt our economy in the long run just as much and, in my opinion, slowly but surely force the banking industry into an untenable competitive position. Simply put, it is not just the number of regulations applied to banks, it is also the regulatory structure applied to banks that is draining the industry's economic vitality. As I have said before, no one in his or her right mind would design the complex regulatory structure we have today. Of course, banks are regulated by the Federal Reserve, the OCC, the FDIC and state bank regulators. It is not unusual for even a fairly small bank to have three of these agencies directly involved in its supervision. But the industry dealt with that pretty well until everything else was piled on. We must now add the CFPB, which writes numerous rules affecting all banks, examines those with assets of more than $10 billion, and has the authority to go after smaller banks if it

Table of Contents for the Digital Edition of ABA Banking Journal - July/August 2015

CHAIRMAN'S VIEW
UPFRONT
OPERATIONS
ECONOMIC OUTLOOK
PICTURE THIS
BANKING’S APPALLING REGULATORY STRUCTURE
HOW BANK CULTURE DRIVES SUCCESS
KEY CONSIDERATIONS FOR CREATING SUCCESSFUL BOARDS
VENDOR RISK MANAGEMENT
FIVE RISKS THAT WILL SHAPE BANKING’S FUTURE
CEO SYMPOSIUM
MOBILE BANKING
PAYMENTS
ABA COMPLIANCE CENTER INBOX
INVESTOR PERSPECTIVE
COMMUNICATIONS
REAL ESTATE LENDING
LEGAL BRIEFS
FROM THE STATES
BANKER RECOMMENDED READING
INNOVATIONS IN SOCIAL RESPONSIBILITY
INDEX OF ADVERTISERS

ABA Banking Journal - July/August 2015

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