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Title: Bye-Bye, Community Banks
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URL Source: http://thisiscommonsense.com/2015/02/11/bye-bye-community-banks/
Published: Feb 11, 2015
Author: -
Post Date: 2015-02-11 10:25:14 by Katniss
Keywords: None
Views: 165
Comments: 6
Bye-Bye, Community Banks The Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into law in 2010 by President Barack Obama. Its supporters said that would increase financial stability and transparency, prevent bailouts, and protect consumers from “abusive practices.” I’m dubious the new regulatory regime will accomplish any of these goals. What has really happened since passage? An extreme consolidation of financial institutions. Marshall Lux and Robert Greene, in a new study, show that the long-term trend in which community banks have diminished in number and importance has doubled in severity since Dodd-Frank. Greene and Lux explain the mechanisms at play under Dodd-Frank. The regulations are not geared to the size of the regulated institutions, so economies of scale in regulatory compliance arise, bigger than ever. Todd Zywicki, writing in the Washington Post, makes it clear how these “regulatory costs tend to fall proportionally heavier on smaller banks.” Leading to consolidation. Just as Zywicki had predicted. Zywicki, Lux, and Greene are demonstrating an old principle. Economist Ludwig von Mises explained it decades and decades ago. Mises dubbed regulations into market operations “interventionism,” and identified the pattern of such activity as almost an archetype. Interventionists That is why laws keep piling up. Leading ultimately to calls for more laws. 
You don’t have to be a “small-is-beautiful” fetishist to worry about this. The bigger banks remaining are just all that much bigger in the “too big to fail” department.
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#1. To: Katniss (#0)
We use a local credit union. Not that the feds won't find a way to control those too eventually.
If the Credit Union has FDIC sign in the window or on the wall ... they are FEDERALLY Controlled.
Deposits in most credit unions are covered by the National Credit Union Share Insurance Fund (NCUSIF), rather than by the FDIC. The coverage is similar, and the limits are the same as for the FDIC: The fund covers up to $250,000 for all of your individual accounts combined at each credit union, Read more at http://www.kiplinger.com/article/saving/T005-C001-S001-credit-unions-have-deposit-insurance.html#0cl3IREaRgokQVjG.99 Yeah, the Federal Reserve controls it all but Credit Unions are still regarded as much safer because they are member owned.
Thanks, ratcat!
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#2. To: christine (#1)
#4. To: noone222, christine (#2)
#6. To: ratcat (#4)
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