Small banks are growing more vociferous in their discontent over the Federal Government’s bailouts of “too big to fail” banks.  Do they have a valid point?

In order to bail out banking giants like Bank of America and Citigroup and to constantly replenish the FDIC deposit insurance fund, the government is crowding out smaller banks and raising onerous special assessment fees.  As a result of Wall St’s greed and inefficiency, thousands of healthy community banks are struggling to survive amidst cumbersome federal regulation and punishing fee hikes.

Critics argue that the fee hikes are critical to salvaging a financial system on the brink of collapse.  They also argue that the majority of the 50 banks that have failed since 2008 have been smaller banks.  However, this number represents an extremely small percentage of the approximately 8,000 community banks nationwide.

Is government propping up monolithic, inefficient, greedy, and unsuccessful banks at the expense of squashing smaller, more efficient, more prudent, and more successful banks?  What if a bunch of these smaller, more sound financial institutions could step in, pick up the slack, and fill the void of a banking conglomerate that has wasted its capital and tapped taxpayer money?

Advocates of massive bank bailouts and sweeping government intervention claim that saving Wall St is the key to saving Main St.  But, by rewarding the failure of corporate giants, is the Federal Government just punishing the little guy on Main St?

Read the article here.