Wednesday

Merry Christmas and Happy Chanukah?

We at URS are wishing everyone the best over this fun filled holiday season of joy and happiness. Well, at least to all those financial institutions which are under the pressing thumb of the `Powers That Be’. The banking industry is becoming increasingly difficult to expand its customer base and grow bottom lines.
Consider the following recent and pending stranglehold tactics:
- Disclosures, notices, statements, forms and tax documents — about 300 pages and just for home loans. Bank processed 455 home loan applications and they created more than two months of `make work’ and the estimated labor costs reached $12,000.
- One bank vice president says the Dodd-Frank Wall Street Reform and Consumer Protection Act, which became law in July 2010, nearly doubled the review and reporting process to regulators, with little margin for error. And that is only a portion of the avalanche of new regulation that has executives at smaller banks concerned.
- The bill is massive — 2,300 pages — and bankers expect it to result in 5,000 pages of new rules as regulators turn its mandates into specific instructions for financial institutions in coming years.

Bankers are very concerned about the abundance of new legislation because it will choke neighborhood banks’ bottom line and virtually place them as prime targets for takeovers by larger, national banks. This legislation appears to have been cultivated by some devious and purposeful late night `strategy meetings’ by certain Congress people and bankers. But then again, this is purely speculation.

Small banks in America have been disappearing for decades. For example, in 1984, the largest banks in America — those with more than $10 billion in assets — controlled 28% of the industry, according to FDIC data. Now, these larger banks control 79% of the market. Banks with less than a billion in assets are holding 11% of the market, compared with 40% in 1984. Bankers believe Dodd-Frank will hasten the consolidation.

Bankers are very concerned about the abundance of new legislation because it will choke neighborhood banks’ bottom line and virtually place them as prime targets for takeovers by larger, national banks. This legislation appears to have been cultivated by some devious and purposeful late night `strategy meetings’ over the past decades by certain Congress people and bankers. But then again, this is purely speculation. Since the 1800’s, neighborhood banks have been instrumental in cultivating small geographical population areas and today this wholesome and warm relationship is slowly disappearing.