University of Arkansas at Little Rock Law Review


John T. Adams

Document Type



The Dodd-Frank Act (Dodd-Frank) was enacted following the 2007-2008 financial crisis as the result of calls in Washington to protect average Americans from the depredations of Wall Street. Specifically, proponents of Dodd-Frank pointed to greed, carried out through the business practices at large commercial and investment banks, as the cause of the financial crisis. Accordingly, Dodd-Frank sought to place the most stringent restrictions on the activities of large commercial and investment banks of any legislation since the Great Depression.

However, the perception of rapacious business practices on Wall Street does not apply as directly to community banks. Situated somewhere between Main Street and Wall Street, community banks directly serve their immediate communities while, in many cases, simultaneously interacting and trading with large commercial and investment banks to make that possible. Community banks are included in the scope of certain new financial market regulations, explicitly excluded from others, and subject to discretionary regulation in others.

This article seeks to describe the impact of Dodd-Frank and the inconsistency of the application of its regulations to community banks in the particular area of consumer protection, and how Dodd-Frank's creation of the Consumer Financial Protection Bureau (CFPB) might affect community banks. This is accomplished by considering four issues: (i) the difficulty in defining a "community bank" and Dodd-Frank's employment of asset size to limit several of its provisions; (ii) the history of Dodd-Frank's enactment; (iii) the CFPB and its mandate as prescribed by Dodd-Frank; and (iv) the CFPB's effect on community banks and the regulatory risks faced by community banks as the CFPB is implemented. The article concludes that, due in part to the difference in goals and business models between large commercial banks and community banks, the CFPB and its proposed rules will likely impose both worsening uncertainty and significant costs on community banks, ultimately contributing to their decreased viability.