Dodd-Frank changes could bring relief to local banks

Published 10:33 pm Thursday, May 24, 2018

By Jenna Oden

Local banks around Pike County and the country may now receive relief from regulatory matters after Congress passed to undo parts of the Dodd-Frank bill.

“Most of this stuff does not apply to us at all,” President and CEO of Troy Bank and Trust, Jeff Kervin, said. “Us being: any bank that operates in Pike County. In the cases where it does apply to us, it may not be directly relevant to us.”

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The bill is said to give way for smaller sized banks to lend and compete more efficiently. Even more, the bill simplifies the administrative mandates under the Dodd-Frank bill.

“We are a large community bank at $900 million in assets,” Kervin said. “It (the bill) applies to us but does not exactly affect us. Though, the things that will directly affect us are things dealing with mortgages.”

Kervin says the requirement to escrow on home mortgages is the issue that has most interest to them.

“Right now, generally speaking, we are having to escrow,” Kervin said. “If you came in to borrow money to buy a mobile home or just a house we would have to force you to pay into an escrow where we pay your insurance, which is a huge burden on the banks and is very costly. This new bill will make it where we won’t have to do it anymore… which is good because my bank customer’s do not like to be escrowed and would prefer to pay their own property taxes and have their own insurance.”

The bill will simplify the administrative mandates under the Dodd-Frank bill.

“Banks will be able to focus more on the customer now and less on Washington,” President and CEO of The First National Bank of Brundidge John Ramage said. “We will be able to give better care for the customer.”

Additionally, Ramage and Kervin agreed that handling mortgages will be easier on the customer. Currently, mortgage applicants have to go through a long process with multiple ‘T’ crossing and ‘I’ dotting to get approved for a loan but now this bill could give some relief from mortgage lending red tape, which red tape is defined as excessive bureaucracy or adherence to rules and formalities.

“Our customers will be freed up from all the unnecessary regulations and that’s the big thing for the customer,” Ramage said.

All nine of Alabama’s representatives, democratic and republican, voted unanimously which was the only state of four who had that much bipartisan support.

“The bill had not harmed us yet but it was coming,” Kervin said. “It had not filtered down to us smaller banks yet and now we will have a little more protection.”

Overall, Kervin said this will be a “win-win” for the customer and community banks.

“I think the consumer will appreciate this more because they will have a little more control,” Kervin said. “If we do business right and we do our job, the customer has more products available to them in the most efficient means possible.”

The bill was approved and signed by President Donald Trump early Thursday afternoon.

“As a candidate, I pledged that we would rescue these community banks from Dodd-Frank, the disaster of Dodd-Frank, and now we are keeping that commitment,” Trump said.