As a community banker,
prosperity is not only a part of our everyday vocabulary – it’s also part of my
everyday mission of creating value for our community! My job as a banker might seem rather
straightforward – take in deposits and make loans – but I’m here to tell you
there is a primary responsibility that makes being a community banker just that
– a community banker. I call this place home, and just like you, I
want our community of West Kentucky to thrive and prosper.
That’s why we are out
there every day helping local families and residents finance a place to call
home, plan for retirement, open up or expand a small business, and create
economic vitality and jobs – all to make our local economy stronger.
But there’s something
out there on the horizon that is threatening this community’s economic
prosperity. The growing wave of onerous
new banking regulations that Congress created to address Wall Street’s misdeeds
is landing with much greater impact on our nation’s nearly 7,000 community
banks. That’s right; we’re feeling the
effects of Washington’s runaway regulatory burden here in West Kentucky, even
though we are miles from Washington.
Because of our
time-tested business model, one based on customer relationships rather than
transaction volumes, community banks aren’t a threat to the entire financial
system. In fact, community banks are the
source of almost 60 percent of all small-business loans of less than $1
million, as well as mortgage and consumer loans tailored to the needs of our
local communities. Yet community banks
such as Community Financial Services Bank (CFSB) are being forced to pay a
penalty in regulatory costs – to comply with an ever-growing number of rules
and regulations. Everyone can agree to
reasonable, smart regulations. But
today, Washington lawmakers and regulators are holding back community banks
from devoting our full attention and resources to making more loans and fueling
a more robust and prosperous local economy in the communities we serve.
The effect of these regulations
is that Congress has added insult to injury for community banks and consumers,
while rewarding the real villains. The
megabanks’ implicit government guarantee provides what Bloomberg View has
calculated is an $83 billion annual taxpayer subsidy – a major driver of the
largest banks’ profits.
As a local community
banker who is particularly concerned about the economic prosperity of this
great community and our local consumers, I’m urging lawmakers to address the
regulatory burden that increasingly is harming local community banks. Here are five steps Congress can take now to
rebalance the regulatory burden and give local businesses right here in our
community greater access to loans:
·
Exempt small
banks from unnecessary and burdensome mortgage regulations to support the
housing recovery.
·
Cut red tape in
small-business lending by waiving new reporting requirements.
·
Require
cost-benefit analyses by regulators to ensure quantitative justification of new
regulations.
·
Waive certain
audit rules to reduce expenses without creating more risk for investors,
taxpayers or the deposit-insurance system.
·
Eliminate
redundant requirements that financial institutions mail annual privacy notices
even when they haven’t changed their policies.
None of these changes
would alter the already significant regulatory tools that provide appropriate
oversight of community banks. But it
would be a failure of logic and lawmaking if the new wave of banking
regulations that were meant to stop
Wall Street excesses instead resulted in cutting off one of Main Street’s
economic lifelines. I hope
lawmakers will listen to the calls of community bankers across this great
nation so that we all can continue to hold economic prosperity first and
foremost in our vocabulary and our mission.
