100 Small Banks Use JOBS Act to Stop Reporting to SEC —Washington Post

For Nearly Five Decades, Securities Law Allowed Banks with Fewer than 300 Shareholders to “Deregister,” Now, Banks With Under 1200 Shareholders Can Do the Same Under Provisions of the JOBS Act  

 Dina ElBoghdady reports some interesting news this week in the Washington Post:  about 100 small banks have stopped reporting financial details about their operations to the SEC since the JOBS Act was enacted in April  About 100 small banks have stopped reporting financial details about their operations (e.g., revenue, expenses, executive compensation and trends affecting their businesses, etc.).to the Securities and Exchange Commission since April, when a law was enacted that aimed to lower the regulatory burdens for small companies.  

Most of the firms are small community banks with less than $500 million in assets. The banks say that reporting to the SEC is a time-consuming and expensive process that eats into thin profit margins without any meaningful benefit to the public. The industry remains heavily regulated even without SEC oversight, bankers say.

“I’m the happiest person in the bank because we’ve deregistered,” said Alan Dickerson, chief financial officer of the Bank of Floyd, a state-chartered bank southwest of Roanoke that is the sole subsidiary of Cardinal Bankshares Corp. But “I still have a lot of people looking over my shoulder.”

Critics of the higher thresholds say it’s true that some banks may be regulated by several institutions, including the Federal Deposit Insurance Corp., the Federal Reserve and state entities. But those regulators serve different constituencies whose interests do not always overlap, they said. The SEC is tasked with looking out for investors.

Read the whole piece here. 

New Rules Under the JOBS Act Make Life Easier for Small Banks