The Regulatory Tiers: Should You Grow Past $1 Billion, $5 Billion or Even $10 Billion in Assets?

For the largest U.S. banks, the incentives and objectives of the current regulatory landscape are clear—you must shrink to reduce your regulatory burden and concurrently become less systemically important. However, for the vast majority of U.S. banks, those with less than $50 billion of assets (including the large majority of much smaller banks), the framework resulting from the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and other regulatory initiatives provides a much more muddled context for growth decisions. Dodd-Frank imposes greater regulatory burdens on all banks, including the smallest U.S. institutions. Prudent organic or acquisitive growth is…