First Name:
Julia
Last Name:
Spring
Major Department:
Finance, Banking and Insurance
Thesis Director:
Don Cox
Date of Thesis:
May 2013
In response to the financial crisis of the late-2000s, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into federal law on July 21, 2010. The Act seeks to protect consumers and restore their confidence in financial institutions by preventing many of the problems that led to the Great Recession from happening again and by limiting the systemic risk of the so-called "too big to fail" banks. However, unintended effects of Dodd-Frank are a concern throughout the entire finance industry and the new regulations are putting significant pressure on banks, especially our nation's essential community banks. Community banks serve an important role in small towns in the United States as a result of their relationship-banking expertise. However, new regulations under Dodd-Frank are limiting the capabilities of these banks and are consequently impacting their operations.
This thesis investigates the currently held expectations of community bank CEOs regarding how Dodd-Frank will impact their bank. In order to accomplish this, a survey was created for community bank CEOs in North Carolina. The survey was constructed to address the three questions this thesis seeks to answer: (1) "What are the implications of Dodd-Frank to community banks?, (2) Will these institutions be able to survive after all laws are finalized?, and (3) What can lawmakers do to help community banks remain successful for years to come?" With many regulations still to be finalized, there is much uncertainty about what the legislation will look like in its final form, but this leaves room for discussion about how lawmakers should move forward with their decisions. Hopefully this thesis provides some answers as to how the Dodd-Frank Act is impacting community banks.