Recent Dodd-Frank Reform

Recent Dodd-Frank Reform

At the end of May, Congress - in a bipartisan measure - passed the most significant reforms to the Dodd-Frank banking bill that was enacted in response to the 2008 Financial Crisis. 

The intent of the reform was to ease the regulatory burden faced by community banks in their ability to lend to small businesses - which has seen a slight increase in demand as noted by the Federal Reserve Bank of Chicago and the Schaumburg Business Association. 

To provide context on the potential implications this reform will have for Schaumburg's small businesses we asked Schaumburg Bank and Trust, a Wintrust Community Bank for their perspective: 

Will Recent Dodd-Frank Rollback Impact Small Business?

Congress recently came together in a bipartisan decision that could have an impact on community banks, passing a bill rolling back some of the regulations mandated by the 2010 Dodd-Frank Act. The new bill would relieve thousands of banks, those with less than $250 billion in assets, from some of the regulations enacted by Dodd-Frank. It will also mean small and medium-size banks won’t have to undergo the stress tests required by Dodd-Frank intended to measure their ability to withstand another economic downturn.

Easing the regulations, including freeing community banks from some reporting rules, would free up capital currently devoted to complying with the regulations. Proponents of the bill say that the cost of keeping up with the regulations associated with Dodd-Frank disproportionately affected smaller financial institutions.

So, the question you want answered is: With some of the regulations eased, will the extra funds banks save go back to local businesses? It’s too soon to tell what impact the easing of these regulations will have on access to capital for small businesses. One thing is certain: this bill means the effected banks will now be operating in a friendlier regulatory environment.

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