New Regulations Are Strangling Community Banks

May 8 (Bloomberg) -- The wave of new banking regulationsthat Congress created to deter and punish Wall Street’s misdeedsis landing with much greater impact on the U.S.’s almost 7,000community banks than on the too-big-to-fail lenders.

Community banks didn’t cause the financial crisis; theyplayed by the rules. Because of their time-tested businessmodel, one based on customer relationships rather thantransaction volumes, community banks aren’t a threat to thefinancial system. Yet they are being forced to pay a penalty inregulatory costs -- to comply with rules aimed at preventing thebad behavior on Wall Street from happening again.