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Big bank rules crush little banks 

May 26, 2015

John Browne, TribLive

The Senate Committee on Banking, Housing and Urban Affairs held a hearing on “Regulatory Relief for Community Banks and Credit Unions” in February.

Coincidentally, Harvard's Kennedy School of Government that month published a working paper, “The State and Fate of Community Banking.” Drafted by Marshall Lux and Robert Greene, it claimed the regulations established under the Dodd-Frank Act of 2010 — designed to curb risk-taking, big banks — was crushing smaller community banks.

The Federal Reserve defines community banks as those with less than $10 billion in total assets. The Harvard paper notes that those banks play a critical and unique role in the economy. It cites the Consumer Financial Protection Bureau's position that community banks “can be a lifeline to hard-working families paying for education, unexpected medical bills and homes.”

Fed Gov. Daniel Tarullo, noting the decline of community banks, said “in rural areas, their disappearance could auger a permanent falloff in this kind of credit.”

Read more: Business TribLIVE
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