Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted by the Obama administration in response to the 2008 financial crisis, with the goal of eliminating a number of risks across the American financial system. Unfortunately, the effects of Dodd-Frank have hit community banks and lending to small and medium businesses the hardest. According to a report from George Mason University, over 82% of small banks reported their compliance costs increasing by more than 5% per year since Dodd-Frank. With less capital to deploy, community banks have disproportionately lost market share to large banks since Dodd-Frank was passed. See graph here for more detail.
Small businesses account for 50% of U.S. GDP and employ more than 65% of our nation’s labor force. Because a significant portion of loans to small and medium businesses come from community banks, changes in community bank regulation will have widespread effects on our nation's continued financial health. The Trump administration has been a vocal opponent of the Dodd-Frank and will likely combat many of the policies instituted by the Obama administration by targeting changes that look to ease regulations and allow for a higher flow of funds to small and medium businesses.