As a former community banker, I know that few understand their communities better because they live in the local economy and can step in to lend in a targeted way to those best prepared to benefit.
Of course intensified regulation will come at a cost. For banks, profits will go down. Generating double digit profits will become an unrealistic target if the underlying real economy the bank is servicing does not generate such high profits either. For customers, it means that financial products and services will become more expensive.