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Old 06-11-2012, 01:57 PM
29,986 posts, read 39,503,754 times
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Just goes to show that regulations through Dodd-Frank are not thought out well and a one size fits all approach is going to be harmful for S&L's as well as small community based banks.

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Last week's Federal Reserve span#ExplainsLink a, span#ExplainsLink a img, span#ExplainsLink a:visited img, span#ExplainsLink a:visited {border:none;} announcement that S&Ls would have to increase their capital requirements could doom an industry that has been able to thrive largely on its ability to lend large amounts of money, primarily through mortgages, while keeping relatively low capital

But for consumers, the likely consequence will be higher mortgage costs as there is less competition in the industry, thus allowing room to raise rates, particularly on adjustable-rate loans.

"The financial metrics that allowed thrifts to be profitable — high loan-to-deposit ratios, low expenses, and high leverage — are no longer possible," KBW said. "The loss of the thrift industry has broad implications for mortgage finance in the future."
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