Five years after Dodd-Frank, Community Banks failing, Consumers suffer and Mega-Banks just fine

tanya-marsh-wake-forest-law-school-posted-daily-business-news-manufactured-housing-professional-news-Sounding off in the respected Huffington-Post, Wake Forest Law School Professor Tanya Marsh writes that: “First, the mega banks are just fine.”…”Second, community banks are definitely not fine.” and “Third, consumers are the big losers.” Marsh states that “In the second quarter of 2013, Bank of America saw a 63% increase in net income, Citigroup posted a 42% increase, JPMorgan Chase recorded a 32% increase, and Wells Fargo “only” logged a 19% increase. Headlines boast of the “record profits” enjoyed by the mega banks.” Even before the 2008 mortgage and financial system crisis, the professor said “…smaller banks saddled with a growing regulatory burden found it difficult to compete with more efficient mega banks. The result was a greater consolidation of assets in the hands of a few companies. The number of banks with assets of less than $100 million decreased by more than 80% from 1985 to 2010 while the number of banks with assets greater than $10 billion nearly tripled over the same period.”  Marsh said, “Financial activities that are fundamental to the average American are only worth the time of a mega bank if they involve a completely standardized product and a completely standardized borrower.” Marsh says that 5 years after Lehman Brothers failed, those who didn’t cause the financial meltdown are being punished, the mega lenders are just fine and consumers and small businesses are the big losers, if the pattern isn’t changed. As MHProNews readers can relate, as this is also true for ‘non-banking’ lenders, such as communities or retailers willing to make chattel (personal property) or offer lease purchase programs to potential borrowers who don’t fit a Dodd-Frank/CFPB regulation lending ‘box.’ ##

(Photo Credit: Wake Forest Law)

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