The cumulative impact of all the new rules resulting from the Dodd-Frank Act are inhibiting the ability of community banks to meet the credit needs of their local communities, the American Bankers Association (ABA) said Wednesday before the Senate Banking Committee.

The pressures from hundreds of new regulations must be addressed in order to give all banks a "fighting chance to maintain long-term viability," said Tommy Whittaker, president and CEO of The Farmers Bank in Portland, Tenn., who testified on behalf of the ABA. "When a bank sets down roots, communities thrive. But without quick and bold action to relieve regulatory burden we will witness an appalling contraction of the banking industry."

In his testimony, Whittaker pointed to several provisions of the Dodd-Frank Act that the ABA sees as particularly problematic, including the Federal Reserve’s debit interchange proposal, the new Bureau of Consumer Financial Protection (CFPB) and recently proposed mortgage lending rules. He urged Congress to take immediate action to stop the debit interchange issue from being implemented; asked that the new CFPB regulator focus its energy on supervision of non-banks; and added that most residential mortgages made by community banks today are low-risk and should fall under the "qualified residential mortgages" (QRM) exemption.

"All banks – large and small – will be required to comply with rules and regulations set by the CFPB," Whittaker said. "The bottom line is that the more time bank personnel devote to parsing regulatory requirements, the less time they can devote to the financial and credit needs of bank customers."