Presidential contender Marco Rubio said during Thursday’s Republican debate that “over 40 percent of small and midsize banks have been wiped out since” the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
Was he right or was he throwing red meat to a conservative audience?
A review of statistics from the Federal Deposit Insurance Corp. shows a decline nationally ranging from 14 percent to 22 percent, depending on which numbers are used.
Also, consolidation in the banking industry has been occurring for decades, before the legislation that overhauled many sectors of the financial industry. The latest mergers, acquisitions and failures, which act to reduce the number of banks, also have been caused at least partly by the weak economic recovery.
But Rubio’s numbers weren’t nearly as far off in one measure: the drop in the number of banks in Florida, his home state.
“We need to repeal Dodd-Frank,” Rubio said, adding that it’s “eviscerating” small businesses and small banks.
The Florida senator then went on to say that “over 40 percent of small and midsize banks that loan money to small businesses have been wiped out since Dodd-Frank has passed.”
President Barack Obama signed the legislation on July 21, 2010.
At that time, the FDIC was insuring deposits at 7,932 banks and thrifts nationwide.
As of March 31, 2015, the FDIC insured deposits at 6,419 institutions.
That’s a drop of 19 percent.
Rubio’s campaign didn’t immediately respond to a request for comment.
The FDIC also keeps numbers on what it considers community banks, of which there were 5,946 in the first quarter 2015.
In a 2012 community banking study, the FDIC said there were 7,658 FDIC-insured community banks owned by 6,914 bank companies as of year-end 2010.
That’s a decline of 22 percent to 14 percent, depending on which 2010 number is used.
Also, the number of banks has been dropping for decades.
“Consolidation in the U.S. banking industry is a multidecade trend that reduced the number of federally insured banks from 17,901 in 1984 to 7,357 in 2011,” the FDIC said in its 2012 report.
Asked about Rubio’s comments, the Independent Community Bankers of America shared a list showing the number of banks with less than $10 billion in assets. It shows their ranks having fallen by 16 percent since 2010.
Rubio’s 40 percent number is in the ballpark when it comes to Florida.
The state had 175 banks as of March 2015.
It had 265 as of June 2010. That’s a 34 percent drop.
Twitter @beckyyerak
