>Every time they write a loan they are forced to provide the customer with a 200-page "book" of all the compliance and regulation surrounding that loan.

This must vary by state; I recently took out a small loan from my local bank in Pennsylvania and the information I went home with came out to about 15 pages.

>When you're dealing with huge amounts of yellow tape and you have millions of customers

I thought the conventional wisdom was that onerous regulation actually favored huge businesses with "millions of customers" -- for example, the effort of having to "print that, audit it, have lawyers look it over, maintain it" is a fixed cost so the cost per customer is smaller for larger banks.