Community Banks and Regulatory Burdens
Community banking in the U.S. is being slowly strangled by regulations, according to a former chair of the Federal Deposit Insurance Corp.
A personal experience illustrates this issue: a friend visited her community bank with her son to add him as a signatory to her account. The bank employee asked a young woman opening her first account a series of intrusive questions about her personal life, job history, and finances. The friend's son was also subject to similar questioning, despite his parents being long-time customers.
The regulatory burdens placed on small banks are heavier than those on giant ones.
The former FDIC chair argues that community banks need relief from these suffocating regulations.
Author's summary: Community banks are struggling due to excessive regulations.