In this report, we analyze today’s FinServ Subcommittee on Financial Institutions and Consumer Credit hearing examining the state of bank lending in the U.S.  The hearing was marked by bipartisan agreement on the need to ensure that community banks are not being unduly burdened by regulations, with Chairman Luetkemeyer (R-MO) citing data showing that small bank lending has significantly declined relative to large bank lending and Rep. Meeks (D-NY) saying that there is a need to ensure that the regulatory pendulum has not swung too far.  Many Republican members posited that Dodd-Frank has resulted in a “two-speed economy” in which the biggest banks and borrowers with perfect credit are able to thrive while smaller banks and average borrowers are left behind.  They pointed to significant declines in the number of community banks and de novos and increases in the number of potential borrowers turned away by lenders as evidence of this trend.

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