Former Wells Fargo CEO Dick Kovacevich said Friday that regulations are “killing” small banks and have contributed to the loss of more a thousand of them since the financial crisis.
Regulations, including from the Affordable Care Act, are also hurting small businesses, restraining their ability to hire more employees and help the U.S. economy recover, Kovacevich said in an interview on CNBC's "Squawk Box."
“This is the first time in maybe forever, but certainly in the last 50 years, that small businesses haven’t led the employment growth,” said Kovacevich, who retired as CEO of Wells Fargo in 2007.
Echoing an observation often made by critics of post-crisis regulations, Kovacevich said the 2010 Dodd-Frank financial reform law has cost the U.S. banks.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
“Regulation is killing small banks. That’s why we went down 1,500 banks so far since the Dodd-Frank bill. More will come,” he said.
Kovacevich said large companies can better “deal” with regulations than small companies can. He said surveys show small businesses have ranked regulations ahead of higher taxes when it comes to what’s creating problems for their companies.
“It is very unfair, the level of regulations being put on small banks and small businesses,” he said.
Kovacevich’s comments come as lawmakers are considering ways to ease post-crisis regulations for smaller banks, which have decried new rules as a costly burden that is limiting their ability to lend.
Supporters of regulations, such as Sen. Elizabeth Warren of Massachusetts, have been skeptical about claims that regulations are hurting smaller banks.
In defending regulations, Warren has pointed out that community banks have posted higher profits since some new rules have taken effect.