In early June, when the U.S. House of Representatives voted to repeal and replace certain parts of the Dodd-Frank Act and passed the Financial CHOICE Act, the first thing that occurred to me is how this could ultimately affect my financial services clients.
The Dodd-Frank Act was passed in response to the financial crisis of 2008. It is designed to protect consumers by improving accountability and transparency in the financial services industry. As part of the Act, complex and stringent regulations were implemented pertaining to recordkeeping, capital, and reporting. The requirements have made it difficult for some financial services providers, particularly small banks and credit unions, to expand their offerings; they simply do not have the resources to comply. These financial institutions have experienced regulatory burdens, especially in the areas of residential mortgages, small business loans, and free checking.
If the Financial CHOICE Act becomes law, some regulations may ease, giving these types of financial institutions the ability to provide more services and better serve their customers. Community banks and credit unions may be able to free up budget currently being used to process paperwork and compliance-related tasks and reallocate it toward new product development and marketing.
While major bank reform legislation may not happen until next year, we are keeping abreast of what may be coming and the impact any changes may have on the financial services industry. As financial services marketers, we will be ready to capitalize on regulations that could be favorable to our clients and to adjust marketing efforts accordingly.