According to a recent CNBC interview with former FDIC chairman Bill Isaac, small lenders, such as a community bank, might be a risk as a result of the financial reforms associated with the Dodd-Frank Act.
Federal Reserve Chairman Ben Bernanke recently stated that the financial reforms implemented were meant to target major lenders and not community banks. However, Isaac disagreed.
"The bigger banks can absorb it, the smaller banks can't," he told the news source. "I would not be surprised to see half of the community banks in this country go out of business if we don't give some relief from Dodd-Frank for them."
Isaac went on the express his distaste for the legislation as a whole, claiming that it didn't address any of the major issues that caused the financial meltdown and hasn't enacted any new financial regulation that would prevent a future one.
Additionally, Isaac criticized the Fed's bank stress tests that were implemented under the Dodd-Frank Act, saying they were not being performed correctly and the outcomes didn't parallel the real world.