Too Much For Small Banks

Newt Gingrich does have a point, the Dodd-Frank Bill, which imposes new financial regulation requirements on institutions can have some damage to small local banks.  The purpose of the legislation is to stop predatory lending practices and curb specific  forms of derivatives trading, which caused the crisis in the first place.  However, while large banks can cope with the regulations, small banks cannot.  Here's an example from the DesMoines Register:

For example, individual bankers who make more than five mortgage loans in a year must now register with the federal government, a process that requires an online application, fingerprinting, background check, and a $100-a-year fee. Will that one rule, meant to give consumers a way to check on a lender, bring down a community bank? No, but “you pile that on 20- or 30-fold,” Schipper said. Add in new rules about how mortgage bankers and brokers are paid, the Durbin Amendment that limits the fees banks can earn on debit-card swipes, and a series of rules requiring banks to disclose reams of new information to customers and regulators, and small banks see powerful new demands on their time and money.

These stories are sad, but it is not a reason to no do financial regulation at all.  It means tailoring the solution for specific sizes of banks, so the regulations are not too onerous for a small bank in rural Kansas versus a large corporate bank in New York City.  Although, with the number of community banks shrinking in size over the last 20 years from controlling 28% of  the market to 11% of the market today, the damage may already be done and "custom legislation" may not matter.