Daily Deposit 2.22.2023

GM. This is the Daily Deposit. The newsletter that helps bankers get better, not worse, everyday

like a Krispy Kreme doughnut, we're delivering your sweet satisfying banking news. Hot Now light is on!

Bank Index Performance - Feb 17

ABA Nasdaq Community Bank Index: 382.33; Change: + 0.94%

ABQI Index (actively traded community banks): 2,646.35; Change: + 1.00%

KBW Regional Banking Index: 119.97; Change: + 0.62%

KBW Large Bank Index: 111.86; Change: + 0.06%

Today in Banking

Americans are not feeling the stability (American Banking Journal): with American savings rates hovering around 2% this is one to keep an eye on

Chinese Banker, Bao Fan goes bye-bye: another mystery disappearance of a high-profile Chinese leader, remember Alibaba’s Jack Ma?

Japan Post Holdings Co cutting stake in Japan Post Bank Co: expecting to sell ~30% stake

AMEX and Microsoft team up for AI-powered expense reporting: Prediction, AI tools providing more utility than ChatGPT will explode this year.

Banking 101

Dodd-Frank Act

This bad boy was passed in 2010 to fix up the hot mess that was the 2008 financial crisis. It introduced a bunch of new rules and regulations for banks and other financial institutions to keep things from spiraling out of control again. We'll see how that plays out…

Now, for the little guys, those with less than $10 billion in assets, the Dodd-Frank Act had some special provisions to reduce their regulatory burden. These are the community banks, the kind of place where everyone knows your name and the tellers ask about your grandma's health. Like Bank of Bird in Hand (yes that's legit), an Amish focused bank from Bird in Hand PA.

So what did the Dodd-Frank Act do for these community banks? Well, for starters, it gave them a free pass on some regulatory requirements that the big boys had to follow. No Volcker rule for these guys! The Volcker Rule prevents banks from overly risky activities, like proprietary trading. They still have to follow other rules, like new mortgage lending regulations and enhanced consumer protection requirements. It's like being a kid in a candy store, but only being allowed to eat the sugar-free gummy bears.

Unfortunately for community banks, they are facing some stiff competition with non-bank lenders who don't follow the same rules. It's like bringing a butter knife to a gun fight, but banks have to carry the burden of stability and trust. Don't f with people's money…

Dodd-Frank has given community banks a renewed focus on risk management. Which, let's be honest, is a good thing. We don't want these guys playing fast and loose with our hard-earned money.

LULZ

1% Better

Assume your competition is 10x better than you. Someone else out there is outworking you and has more to lose…

reply with a Cold Stone bowl score… did you:

a) like it

b) love it

c) gotta have it