Minority-owned community banks are vital institutions in the places where they do business, which are often under-served by financial services firms.
That was the main point of remarks by John Walsh, acting comptroller of the currency at the U.S. Office of the Comptroller of the Currency, at a recent interagency conference on minority-owned depository institutions.
"Whether it is the inner city or a struggling rural community, a minority-owned bank or thrift may be the only insured depository institution easily accessible for families to entrust their savings or for a small business to obtain a loan," Walsh said in his prepared remarks.
But that wasn't all he said -- or all that's important about minority-owned community banks.
"Given this important role," Walsh went on, "everyone must be concerned that minority-owned banks are under such great stress today."
"Some of the problems you deal with, like recruiting qualified professionals, raising capital and identifying creditworthy borrowers, are the same challenges faced by all community banks. But they can be even more challenging in the markets you serve and for the services that minority-owned institutions endeavor to provide," he told the bankers.
Other challenges include profit margins that are under pressure, commoditization of auto loans, home mortgages and student loans that require larger-scale operations to be profitable, huge losses on commercial real estate and the increased costs of regulatory compliance.
"No one requirement represents a particular burden, but the cumulative effect of the many rules under development can, particularly for small banks that don't have the capacity to deal with the expanded compliance burden," he said.
That much was followed by a summary of programs the OCC has on offer to aid minority-owned banks: workshops, on-site training, conference calls, an advisory committee, an outreach office and so on.
All well and good, except for the fact that those sorts of small, localized and almost quaint efforts hardly seem adequate to address the problems Walsh outlined.
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