Tennessee banks, businesses struggling with Dodd-Frank’s impact

Almost two years after Congress passed the Dodd-Frank Act, Tennessee businesses and banks are still having trouble determining the impact of the regulations laid out in the law’s 848 pages.

Approximately one-third of the 390 Dodd-Frank mandated rules have been finalized while the others remain stalled in the rule-writing process, The Tennessean reports.

“For where we are, which is almost at the two-year mark, that’s not a great result,” Anna Pinedo, a partner at the San Francisco-based law firm Morrison & Foerster LLP, which maintains daily correspondence with clients on the delay, said, according to The Tennessean.

Sen. Bob Corker (R-Tenn.), a vocal opponent of the financial overhaul, said that the legislation has had a negative impact on the U.S. financial system.

“I think all reasonable people can and did agree that there needed to be more oversight of the banking system, but this legislation was a major overreach that has created uncertainty throughout the economy and threatens to make credit for consumers and businesses more expensive and less available,” Corker said, The Tennessean reports.

Banks are scrambling to comply with the law under the lingering concern that compliance will be costly. CEO Doug Cruickshanks of the Tennessee-based FirstBank said that seven of the bank’s 600 employees focus specifically on compliance, adding that he plans to add to the compliance staff as more finalized rules emerge.

“Who pays for that?” Cruickshanks said, adding that the associated Dodd-Frank compliance costs could disenfranchise many smaller banks, according to The Tennessean. “Any one particular regulation may not be that onerous or expensive, but when you add them up, it raises the cost of doing business for banks, and ultimately the consumer ends up paying for it.”

Others say that certain provisions of Dodd-Frank will disproportionately impact smaller community banks and credit unions. Wayne Hood, a lawyer for the Nashville-based firm Miller & Martin PLLC, said that larger banks have the resource advantage of entire compliance departments.

“But if you’re a community bank somewhere in Middle Tennessee or another state, those are luxuries you can’t afford, and you have to pay outside folks like our law firm,” Hood said, according to The Tennessean.

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