In Friday’s Boston Herald:
“As unintended consequences go, it’s a doozy.
The end result of the crackdown on big banks – the alleged villains of the financial crisis – is fewer small banks.
The number of FDIC-insured institutions has fallen below 7,000 for the first time since federal regulators began keeping track, during the Great Depression. The banks that have disappeared are almost exclusively those with less than $100 million in assets – a lot of money for a human, but small change for a bank.
Tellers and lenders at the kind of banks fondly recalled this time of year by the movie “It’s a Wonderful Life” are now out of jobs thanks to high-minded but misguided laws like the Dodd-Frank Wall Street “reform” act, which is routinely cited by community bankers as the intestinal parasite that consumes whatever profits they manage to make.
It wasn’t supposed to work out this way, but the road to small business hell is paved with the best of government intentions.”
Funny thing about selective memories: it was the government who urged banks to make mortgage loans through the Community Reinvestment Act, to people who had no business qualifying for a mortgage, because their income couldn’t support their student loan financing, their credit history was less than even borderline and property values were goosed to make it all happen. All at the Department of Housing and Urban Development’s insistence.
And when the house of cards came tumbling down? That’s right. There was the federal government standing there again with about $700 BILLION in goodies to lure the banks to bail out the government. That’s right, the banks weren’t bailed out, the government was.