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    New Year, New You, Same Dodd-Frank

    By: Carly Souther

    Carly Souther

    I've never been one to draft "New Year's Resolutions." The best time to begin taking steps to achieve a goal is… * right now*. In other words, when I decide to make a change in my life, I don't wait until the 1st of January to take action—I act immediately.

    However, our Congressional representatives don't seem as committed to staying on course as I am. The dawn of a New Year may, in fact, be the perfect motivator to steer Congress toward achieving objectives in our best interests. Although there are a bevy of areas in need of change, Congress should focus on reforming existing laws that meet the following criteria: (1) a modification of the law will have an important, positive impact on the nation; and, (2) such amendment can be accomplished with relative ease. The Dodd-Frank financial law fulfills both requirements and should therefore be added to Congress's New Year's Resolutions.

    The Dodd-Frank bill, which was signed into law in 2010, was the government's robust response to the financial collapse (the so-called "Great Recession") of 2008. In the last 8 years, 25% of community financial institutions—1,971 to be specific—have closed. Although many leaders, such as former Federal Reserve Chairman Alan Greenspan, want to repeal the law altogether, according to the Wall Street Journal, "[a] wiser course would be to immediately fix those features that are destroying community banks."


    Some of the steps Congress can take to modify Dodd-Frank, include:

    • Revamping the Consumer Financial Protection Bureau (CFPB). Based on the model of the Federal Deposit Insurance Corporation (FDIC), Congress should create a board to share authority with CFPB Director Richard Cordray. This action would reign in Cordray's unilateral authority and lead to decisions that are beneficial for community financial institutions. 
    • Prevent the Department of Justice (DOJ) from targeting banks based on their clientele. For example, the DOJ's "Operation Choke Point" provides incentives for banks that abandon customers who are disliked by the Department, such as Payday lenders, ammunition and firearms retailers, and marijuana-related businesses. 

    If you'd like to learn more about the requirements and implications of Dodd-Frank, register for these upcoming webinars:

    • CFPB Diversity Self Assessment Standards & What They Mean for Your Institution, Fri. 17 Feb., at 11AM ET. In August 2016, Dodd-Frank's Section 342, which mandates the creation of the Office of Minority and Women Inclusion (OMWI), was finalized. OMWI is tasked with developing the standards for diverse policies and practices applied to financial institutions regulated by the federal banking agencies. This session will explore the Final Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies and how you can apply these standards to your institution. 

    Regardless of if you adhere to my methodology or prefer the traditional "New Year, New You," version of goal-setting, may you surpass the bars you set for yourself—both this year and in every year to come.




    Carly Souther

    COO & General Counsel