Banking.

• Author: Van Doren, Peter
• Position: Working Papers - Brief article

"The Impact of the Dodd-Frank Act on Small Business," by Michael D. Bordo and John V. Duca. April 2018. NBER #24501.

The consensus among economists is that banking regulation in the United States historically protected small banks whose loan portfolios were geographically and economically undiversified. (See "Banking Approaches the Modern Era," Summer 2002.) This regulation stemmed from the important role of small banks in congressional electoral coalitions.

Congress recently repealed some Dodd-Frank regulatory restrictions on smaller banks. Ordinarily I would have viewed this as special interest mischief, but this paper demonstrates that Dodd-Frank had adverse effects on smaller banks and the small business loans in which they specialize.

The share of commercial and industrial loans of less than $ 1 million at large...