The requirements of being categorized as a midsized institution are extensive. They include investments in new systems, hiring new compliance specialists, enhancements to existing risk management processes, and diverting current employees’ time and resources from traditional revenue-producing activities towards compliance.
Enhanced Dodd-Frank requirements add significant expenses to a bank’s existing cost structure. That only compounds the challenges banks face in an environment where low rates and uncertain economic conditions have already compressed margins and earnings.
These requirements include:
- The Durbin Amendment – The Federal Reserve is required to regulate debit interchange fees and how transactions are routed from merchants to card issuers. Price caps apply to all debit cards issued by banks with assets greater than $10 billion.