Key Purpose Behind The Dobb- Frank Act

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Very often than not there are regulations implemented as a means to dissolve an issue that needs to be resolved as soon as possible and is implemented immediately. However these needed resolutions end up affecting the little man such as community banks. The main purpose behind the Dobb- Frank act was to lend a hand to consumers and make the market more financially stable. The majority of commercial banks are in fact community banks and tend to serve in suburban, and rural communities. A huge difference between the larger banks in a metropolitan area and a community bank is the way they make decisions on the customer that come in to obtain a loan. Community banks use a means of relationship banking, which is when the representative of the bank attempt to meet the needs of the customer by attempting to find a means to meet these needs. Finding the best means through financial services with the customer and working with them builds a relationship that might even be for a long term. Larger banks in a metropolitan area are more likely to impose a less relationship minded means of dealing with their customers. More than likely they’ll turn to transactional banking. Transactional banks has no input from customers and relies on the facts about the customer’s history information, such as credit scores. This type of banking is very affective when dealing with customer’s on a wider scale, because this serves as a cheaper option for a wider scale customer base. While this is great

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