Just in case you thought otherwise, the Treasury Department has released an infographic outlining how Wall Street reform helps to strengthen small banks.
"We recognize that small banks were not the cause of the financial crisis," the Treasury wrote in its blog post advertising the graphic. "Main Street banks are integral to the ability of consumers and small businesses to access capital and protect their savings."
The graphic offers a few specifics on how Wall Street reform (i.e. the Dodd-Frank Act) aids these integral institutions. For instance, the Treasury asserts, raising FDIC coverage to $250,000 per account from $100,000 allows small banks to attract more deposits and ultimately make more loans. It also suggests the power to regulate nonbanks granted to the Consumer Financial Protection Bureau helps small banks stay competitive in growing markets, since they are no longer up against unsupervised operators.
However, the majority of the Treasury's argument seems to rely on the $10 billion-asset dividing line written into the law. By exempting small banks from certain rules bigger financial institutions are now subject to – such as CFPB examinations and new derivatives laws – Dodd-Frank has created "a level playing for them," it says.
The infographic is the Treasury's latest attempt at breaking down the benefits it says Dodd-Frank affords small financial institutions. It released a 16-slide Power Point presentation on the subject in late July to commemorate the law's second anniversary.
Treasury spokeswoman Suzanne Elio declined to provide specifics as to why the infographic was being released now, other than to refer to the statement made in the blog post: "We often receive questions about how Main Street banks are affected by the historic law."
If prior BankThink posts are any indication, some of those questions may more closely resemble criticisms. Shortly after the Treasury released its graphic, the American Bankers Association responded by listing the "multiple issues" community banks are facing as a result of the reform on the trade group's Dodd-Frank Tracker blog. Among those issues were capital requirements, mortgage finance changes, interchange restrictions and, yes, the creation of "another regulatory supervisor," the CFPB.
What's your take on the Treasury's assessment of Dodd-Frank? What impact, if any, do you think Wall Street reform had on Main Street banks? Let us know in the comments section below.
Jeanine Skowronski is the deputy editor of BankThink.
