Rep. Chu Discusses Key Issues With Small Lenders, Five Years after Dodd-Frank

WASHINGTON, DC – Today, five years after implementation of the Dodd-Frank Act, the Small Business Committee Subcommittee on Economic Growth, Tax, and Capital Access held a hearing titled, “Financing Main Street: How Dodd-Frank is Crippling Small Lenders and Access to Capital.” Rep. Judy Chu, Ranking Member on the subcommittee, made the following opening remarks:

“Critics of Dodd-Frank point to the decreasing number of small financial institutions as proof of regulations that are too burdensome. But it is crucial to remember that the decline in the number of community banks did not begin with Dodd Frank. For the past 30 years, the number of community banks in the U.S. has been declining at a rate of 300 per year for the past 30 years. And 80 percent of those losses were actually due to mergers and consolidations.

“There is no doubt that the regulations implemented by Dodd-Frank will impact many facets of the financial industry; and there is also no doubt that the economy has been improving at a greater pace since its passage. Private employers have created 12 million jobs and unemployment has been cut in half. The housing market is recovering and small business credit has returned to pre-recession levels in many sectors.

“Both Democrats and Republicans have introduced legislation to make technical changes that will support community banks and credit unions. However, moving forward, it is essential that we legislate prudently, and avoid allowing big banks to exploit the genuine concerns of small institutions to promote legislation that benefits Wall Street at the expense of the American people.”