Small banks flex their muscles

October 25, 2009 | By Jim Kim

CNNMoney notes the final versions of a bill that would establish the new, much discussed consumer watchdog exempts thousands of small banks and credit unions from heightened examination and enforcement. This may reflect a new assertiveness on the part of small banks and credit unions.

There have been other victories: Credit unions helped kill a proposal that would have allowed judges to lower mortgage balances homeowners in bankruptcy court. And small banks convinced the FDIC to reduce their fees toward the main insurance fund.

The common line is that big banks caused the financial mess we're in, so why should small banks pay? This makes sense in part, though we should not lose sight of the fact that small banks are failing in droves these days. Seven more failed last week. Many were done in by some very questionable decisions on real estate and too much risk on certain stock positions, such as in positions in Fannie Mae. Certainly, they are not without stain in all this.

For more:
- here's the article