You have reached your limit of free articles this month.

Enjoy unlimited access to

Starting at just 99¢ for 8 weeks.


  • ePAPER

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks


Welcome to

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on

Trump takes aim at post-crisis banking law

Consumer advocates fear protections to be erased.

For three years, United Community Banks has been getting ready for the day it grew to $10 billion in assets and had to play by the same rules as much bigger banks.

That day has arrived, but now the rules may change.

The Blairsville-based bank hit $10.7 billion last year. Under the Dodd-Frank act, a financial regulatory law enacted after the Great Recession, it will soon have to meet tougher regulations on capital levels, consumer protections and other requirements.

“We’re ready,” said Rex Schuette, the bank’s chief financial officer.

President Donald Trump’s aim to roll back Dodd-Frank could make some of the preparations for naught. Trump launched the effort last month with a broadly-worded executive order directing his administration to look for ways to cut regulation of the financial industry.

The fate of Dodd-Frank is not just an issue for bankers like Schuette. The 2010 law was one a landmark effort by Congress and former President Barack Obama to prevent a repeat of the 2008 financial meltdown.

The law’s main aim is to strengthen the banking system. It requires banks to have bigger financial cushions. It restricts banks from risky bets, such as trading on Wall Street using their own capital. It deters banks from risky behaviors such as colluding with appraisers and loan brokers to inflate home values and make fraudulent loans.

Such tactics and an overheated real estate market made Georgia the epicenter for failed banks after property values collapsed, especially in metro Atlanta. More than 80 banks failed in Georgia during the dark days after the financial crisis — more than in any other state.

Dodd-Frank also touches millions of Americans’ daily lives in dozens of ways.

It affects, for instance, fees retailers and customers pay banks for debit and credit card transactions. It influences how easy it is to get mortgages, and whether lenders have to disclose high fees and predatory terms. Credit reporting bureaus have to watch how they sell their services. And the law bolsters shareholders’ sway over executive pay at the companies they invest in.

‘Bad actors out there’

Liz Coyle, executive director of Georgia Watch, is a fan of the law and one of its key creations, the Consumer Financial Protection Bureau. The consumer advocate said the federal agency has returned $12 billion in the last five years to customers who were defrauded by banks and other financial companies. It would be a shame, she added, for Trump and Congress to undo such protections.

“We know there are bad actors out there,” Coyle said. “Trump campaigned to be a champion for the common people, not Wall Street fat cats. This is his chance to prove it.”

But critics say Dodd-Frank rules have crimped bank profits by increasing costs and cutting into revenue.

“It really is extremely costly,” said Schuette, of United Community Banks. He said the bank has more than doubled its spending on consultants and compliance staff to get ready for tougher financial “stress” tests and anti-money laundering regulations the bank will soon face.

Because United Community is now viewed as a bigger, riskier bank under Dodd-Frank, its federal deposit insurance levies are increasing about 70 percent, to almost $7 million a year, said Schuette. Another Dodd-Frank rule, the so-called Durbin amendment, caps debit card fees at banks with more than $10 billion in assets. That will cost United Community half of its $18 million-a-year revenue from that source, he said. (The bank’s total revenue was $404 million last year.)

“I would like to see them rescind the Durbin amendment completely,” said Schuette. He believes the fee cap was added to the Dodd-Frank law as a favor to retailers. “I don’t think any of the big box retailers pass on any of the debit fee savings to consumers,” he said.

Opinions vary on whether the review ordered by Trump will lead to a dismantling or merely a revision of Dodd-Frank.

A re-write would require an act of Congress, and Senate Republicans don’t hold the 60 seats they would need to repeal the law or make big changes.

“I don’t think anybody is of the opinion that Dodd-Frank goes away,” said Joe Brannen, president of the Georgia Bankers Association. “It probably has some merit to leave most of those things in place and just focus on the things that are most egregious” to the banking industry.

A likely approach is lawmakers will try to “tweak” Dodd-Frank, said banking industry expert Chris Marinac. One change might be a higher threshhold to replace the $10 billion asset limit that triggers tougher rules, said Marinac, managing principal at Atlanta bank advisory firm FIG Partners.

Schuette thinks the threshold should be lifted substantially, “to $50 billion or even $250 billion.”

Hundreds of rules

Dodd-Frank is actually enforced through hundreds of detailed regulations based on the 848-page law. That’s where industry experts hope Trump’s administration could revise or remove scores of rules.

Even there, the public notice and comment process takes months and could invite legal challenges.

Because of one such pending challenge, Trump won’t be able to easily fire the director of the CFPB.

Bankers would like to see the CFPB “restructured,” said Brannen, to create a multi-person board to head the agency, diluting the power of its aggressive director, Richard Cordray. But that, also, would likely take an act of Congress that Democrats likely could block.

Despite such obstacles, observers say Trump’s arrival could already be affecting how strenously Dodd-Frank’s requirements are being enforced.

“The attitude of bank examiners has been very harsh for the last four or five years,” said Marinac. “Since the election, there has been a shift. It’s getting a little lighter.”

Coyle, of Georgia Watch, said she hasn’t heard that bank regulators are getting softer. “If that’s the case, that’s very troubling,” she said, adding that’s one reason the CFPB, which also oversees many activities by banks, needs to remain independent.

The CFPB is “not subject to political whims,” she said. “For now, fortunately, they’re still doing their job.”

Reader Comments ...

Next Up in Business

The questions all landlords should ask

The vast majority of rental problems can be eliminated in advance through a good screening process. Many amateur landlords are so desperate for a tenant that they accept the first applicant who walks in the door. That is a rental nightmare waiting to happen. When screening any applicant, remember to be consistent - treat all potential renters the same...
New Atlanta Fed president sees lighter burden for small banks
New Atlanta Fed president sees lighter burden for small banks

Banks — especially the smaller ones — can probably expect a lighter touch from regulators in the future, but not in areas that would weaken protections against another industry meltdown, according to the Atlanta Federal Reserve Bank’s new president. Earlier this month the U.S. Treasury Department unveiled a nearly 150-page report...
Couple gets engaged on Delta flight
Couple gets engaged on Delta flight

A Delta Air Lines plane at 30,000 feet became the scene for a carefully-orchestrated engagement this week. Flights were already part of the couple’s long-distance relationship stretched between Atlanta and Pennsylvania — Deepum Patel works in Atlanta while girlfriend Neha Chakravarti has been in dental school in Pennsylvania. During a Wednesday...
Georgia sees huge drop in people on food stamps
Georgia sees huge drop in people on food stamps

Georgia is seeing a significant decrease in the number of people receiving food stamps as the improving economy lifts many recipients into new jobs and frees them from the fear of going hungry. The number of Georgians getting food stamps has dropped by 300,000 from 1.9 million in April 2013 to 1.6 million. That decrease of 16 percent in the federally...
Record number of travelers expected over July 4th weekend
Record number of travelers expected over July 4th weekend

A record number of people are expected to travel over the 4th of July holiday weekend, according to AAA. A total of 44.2 million Americans are forecast to take trips over the period running from June 30 to July 4. In Georgia, 1.3 million people will travel for the holiday, AAA says. Most of them will be driving. But 3.4 million across the country are...
More Stories