Pub. 5 2015-2016 Issue 2

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S September • October 2015 7 But when it doesn’t — as with significant parts of Dodd- Frank— it constricts our economy, consumer and small business lending and job growth. The right balance must be found to stimulate growth and foster prosperity as unnecessary overly burdensome regulatory requirements lead to compliance expenses, which reduces the resources devoted to lending. A recent study by the American Action Forum found that the Dodd-Frank Act has resulted in $24 billion in compliance costs and 61 million hours’ worth of paperwork. That doesn’t include an additional $7.8 billion in rules that are still pending. Another issue in Dodd-Frank is that the thresholds for what banks get extra regulatory scrutiny were set too low. Many community and midsize banks are finding themselves forced to conduct expensive and unnecessary stress testing—taking time away from and raising costs for their customers—and many banks with traditional business models are being crushed by the regulatory regime designed for the largest, internationally active banks with complex operations. Fortunately, there are a number of proposals on Capitol Hill to fix some of the problems in Dodd-Frank and free up large amounts of lending capital for borrowers who need and deserve credit, some of which banks have been advocating for more than a year. Bipartisan measures in both houses of Congress would allow mortgages to receive the legal protections of “Qualified Mortgage” status if banks keep the loans on their own books rather than selling them on the secondary market. When banks hold loans in portfolio, they keep 100% of the responsibility. Those loans are properly underwritten and closely scrutinized by regulators to make sure they’re safe. A bill fromSen. Richard Shelby of Alabama would raise those thresholds, and a new bill—introduced by Rep. Scott Tipton of Colorado and championed by all 50 state bankers associations— would require regulators to carefully tailor rules to the different kinds of banks they supervise, based on banks’ business model and risk profile. These fixes, and especially Rep. Tipton’s bill, would go a long way toward replacing the one-size-fits-none regulatory regime of Dodd-Frank with a more flexible approach that aligns with the different business models, customer bases, risk profiles and asset sizes of America’s 6,400 banks. There are other Dodd-Frank provisions that need tweaking. However, some in Congress are treating Dodd-Frank as holy writ, opposing any change to the law. The best way to celebrate Dodd- Frank’s fifth birthday might be to make the minor changes that will help the financial reform it ushered in work in the real world. Fixing Dodd-Frank would help ensure the law does what was intended—building a more stable financial system that supports the health of banks and permits serving the needs of customers and communities.  Don Childears President and CEO Colorado Bankers Association A legal partner you can trust. Our advantage is simple—we under- stand the business. Stinson Leonard Street’s banking attorneys have broad experience in matters related to financial services, including commercial lending, mergers and acquisitions, regulations and compliance, litigation and payment systems. Bank on our reputation and knowledge. The choice of a lawyer is important and should not be based solely on advertisements. STINSON LEONARD STREET LLP \\ STINSONLEONARD.COM Law Offices in 14 Locations Nationwide Our Colorado Office: 6400 South Fiddlers Green Circle, Ste. 1900 \ Greenwood Village, CO 80111 \ 303.376.8400 Ernie Panasci Deborah Bayles Kristin Godfrey Perry Glantz Karen Jones 30202 CO Banker Ad_Layout 1 11/17/14 11:40 AM Page 1