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Here's what's going on with the Dodd-Frank Act

The rumors of regulation running rampant over community banks across the country have been greatly exaggerated.

With the Dodd-Frank Act blowing out the candles on its fifth birthday cake this week, government watchdogs have been up in arms with tales of single-branch community lenders struggling with the burden of compliance.

"They feel they are no longer working as a banker, but they're working for the federal government," Rep. Scott Tipton, R-Colorado, told Janet Yellen at a recent House Committee on Financial Services hearing. "While we might have hearings, they don't feel that anyone is actually listening."

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But, although community banks have been suffering lately, it's nothing new. In fact, a look at data from the Federal Deposit Insurance Corporation shows that banks of all kinds have been declining steadily since the early 1980s. Credit unions show a similar trend, according to data from the Credit Union National Association.

In the past 30 years alone, the number of unit banks—banks with only one location—has dropped by a full 84 percent, while branch banks saw a lower rate of decline.

As the government continues to roll out additional regulations—the much-ballyhooed Volcker Rule restricting banks from trading for their own accounts went into effect on Tuesday —the Fed contends that it's taking into consideration the special circumstances of small banks, though they still have to follow the rules.

"We're trying to tailor our implementation of Volcker to utterly minimize the burden on community banks," Yellen told Tipton in the hearing. "But they are subject to it."

Dodd-Frank critics contend that community banks don't have the resources to pay lawyers and compliance experts, like the big banking players do, and small banks themselves have pointed to higher compliance costs in recent years.

Community banks—those with total assets of $10 billion or less—saw their share of the pot increase slightly in 2009, then continue its decline to 18 percent, according to an analysis of FDIC data from Harvard academics. That coincides with a drop in assets for the larger banks and the end to growth for the top five banks by total assets. The running top five have decreased their share slightly since then, to 46 percent.

So based on the FDIC and credit union data, have depository institutions been dying faster since Dodd-Frank than they were before? If we calculate the loss rate—and most bank losses are mergers—there doesn't seem to be much evidence that losses have been higher than normal since the legislation was passed.

In fact, it is branch commercial banks—the category most associated with larger banks—that had loss rates greater than one standard deviation above the 30-year mean after 2010. Credit unions, the vast majority of which also have assets less than $10 billion, and unit commercial banks show yearly declines in line with their long-term trends.

And while banks continue to consolidate at a brisk pace, the banking industry as a whole is thriving. The KBW Regional Banking Index, which tracks both regional banks and large U.S. banks, is at its highest level in nearly seven years. The ABA Nasdaq Community Bank Index, which includes all Nasdaq banks and thrifts except the 50 largest (and those with international or credit card focuses), is also hitting record highs.