Mike Whalen, CEO of Heart of America Group, said he got started with loans from banks that took a chance on an unknown: "It is not an underwriting standard that can be dictated by Dodd-Frank with 55 pages. It's kind of a gut instinct."
But John Allison, who built BB&T Corp. into the 12th biggest bank in America, says that "gut instinct" is now illegal.
"It would be very difficult to do what we did then today. It was semi-venture capital thing. The government regulations (today) are so tight, including setting credit standards, particularly since the so-called financial crisis and since they ... changed the credit standards in the banking industry, making it very hard for the banks to finance small businesses."
These successful businessmen realize that in one way, they profit from the regulatory burden. They can absorb the costs. That gives them an advantage over smaller competitors.
"Somebody who wants to compete with us can't because we can afford to hire the guys that can read this stuff and to keep us in compliance with the law. They can't," Anderson said.
Politicians rarely understand this. One who learned it too late was Sen. George McGovern. After he left office, he started a small bed-and-breakfast and hit the regulatory wall he helped create. Later, he wrote, "I wish during the years I was in public office I had this firsthand experience about the difficulties businesspeople face. ... We are choking off business opportunity."
Wish they learned that before leaving office.