Politicians may wax lyrical on the importance of community banks to local economies and regulators may claim the focus of their efforts is on institutions that are "too big to fail," but the facts tell a different story.

The Dodd-Frank Act, sold to the public as the tamer of the "Wall Street Titans," may well end up having a disproportionate impact on smaller institutions, thanks to the costs of capital implications of being "not too big to fail" and the advent of the Consumer Financial Protection Bureau.

And things are really bad when even the regulators begin to notice. Comptroller Thomas Curry stated in his speech to the Florida Bankers Association last month that Dodd-Frank contained "a number of provisions that… many in the industry thought would not apply to community institutions." In particular, the move away from institutional reliance on credit ratings agencies will have a profound impact on community banks,  which lack the institutional structures and analytical resources to undertake independent due diligence....

For the full BankThink piece see "Thanks to Dodd-Frank, Community Banks Are Too Small to Survive"