How Deregulation Devastated Community Banks and Small Business

[deaniac83]

In light of the Republicans blocking the small business jobs bill in the Senate, I decided to do some research on community banks, large banks and banking deregulation to try to find out at least a piece of the big puzzle of how we got here. Posted here:

http://www.thepeoplesview.net/2010/07/how-deregulation-devastated-community.html

Some excerpts:

To understand why linking small business and community banks is so crucial, and what is missing from the conservative economic lexicon, we have to take a little stroll into history - the history of banking deregulation, to be precise. <...>

The share of the smallest loans ($100,000 or less - far more often used by small business than big ones) held by smallest lenders (i.e. the smallest banks with assets under $100 million) dropped to 7.1% in 2007 from 25% in 1996.
The share of the smallest small business loans (again, $100,000 or less) by medium sized community banks (institutions with assets between $100 million and $500 million) dropped in the same period to 17% from 30%.
Large lenders' share of the smallest loans have gone from a mere 18% in 1996 to a whopping 55.6% in 2007 - meaning that while in the mid 1990s, large banks faced competition from community banks and controlled less than a fifth of the smallest loan market, today they command a substantial majority of it.<...>
Smaller banks are clinging onto a dwindling share of the banking assets:
The share of banking industry assets held by the smallest banks - with assets under $100 million - dwindled to 1.5% in 2007 from 7.7% in 1996.
In the same time the share of asset s held by medium sized small banks - with assets from $100-$500 million - went from 13.3% to 6.7%.
Smaller banks have been forced out of the small business loans and into niche areas:
In 1996, loans under $100,000 accounted for 54% of the loans issued by the smallest banks (assets under $100 million). By 2007, the share fell to 29%.
For medium sized small banks, the share of smallest loans were forced from 27.6% to 12% in the same period.
The bigger banks increased that share from 4.4% to 6.1% in that period. <...>

Full post here with sources:

http://www.thepeoplesview.net/2010/07/how-deregulation-devastated-community.html

[ibegurpard]

1. Deregulation has devastated every industry that it has touched

[ibegurpard]

2. Let me rephrase that:

deregulation has devasted CONSUMERS of every industry it has touched.