Stressed Out: Dodd-Frank Adds Onerous Tests To Overburdened Midsized Banks

Midsize banks that have been struggling to keep their footing in a rapidly changing regulatory environment are about to be hit with another punch, courtesy of Dodd-Frank. Since the financial crisis of 2008, banks have been forced to develop compliance programs for a host of new consumer regulations and are currently transitioning to a new capital framework. As reported yesterday by Mary Frances Monroe in American Banker, Dodd-Frank is about to add required annual stress tests to already overburdened midsized banks.

Defined as banks with between $10 and $50 billion in assets, midsized banks include 47 of the 100 largest banks in America.  Midsize banks' operations differ significantly from many of the "large" banks, some of which have more than $1 trillion in assets. Nonetheless, beginning this Fall, midsize banks will have to perform complex and burdensome annual stress tests that are substantially similar to those required of  financial institutions with more than $