2019 Journal of Community Bank Case Studies

2019 COMMUNITY BANK CASE STUDY COMPETITION

then regulated under, which can stray far from the original intention of the legislation. A study undertaken by McLaughlin et al. shows that in the case of Dodd-Frank, 848 pages of legislation have resulted in over 27,000 associated restrictions. Kish feels that the regulatory burden imposed on it has resulted in a loss of competitive advantage, primarily due to its size, but with the passage of EGRECPA, Kish management was hopeful that the provisions contained in the legislation would address the imbalance. Our attention now turns to whether this hope was or will be actualized. Relevant EGRRCPA Provisions and Impact EGRRCPA was enacted on May 24, 2018 and was designed to relieve stress on the banking

industry, specifically smaller community banks, from the harsh requirements and regulations initiated by the Dodd-Frank Act. Dodd-Frank came shortly after the Great Recession and its main purpose was to protect consumers and prevent another economic collapse. Almost a decade later, US Congress passed EGRRCPA to lighten regulations, with smaller banks as the primary focus. However, the legislation enacted was a ‘watered down’ version of the originally anticipated legislation. The following table outlines the provisions within EGRRCPA which do (Y) or do not (N) impact Kish, as well as those which may do so but cannot yet be determined (TBD). We ranked these in order of potential monetary benefit for Kish and we discuss those provisions which we feel are of significance for Kish.

Impact of EGRRCPA Provisions on Kish

Provision

Benefit Y/N Balance Sheet Net Income RANK

Simplified capital rules

TBD

None

None

8

Small bank holding company threshold

Yes

None

None

2

Highly volatile CRE

TBD

None

None

6

Qualified mortgage

Yes

None

None

4

Escrow requirements

No

None

None

7

HMDA

No

None

None

3

Waiting period on credit offers

Yes

None

None

5

Exam cycle

No

None

None

9

Volcker rule

No

None

None

10

$500-$1,000 per quarter

Short form call report

Yes

None

1

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