Community banks are raising their voices in Washington, D.C. This week, the Independent Community Bankers of America continued to ask lawmakers to consider easing regulatory standards for the nation's small banks.
"Community banks face an alphabet soup of regulations, each of which contains hundreds of pages of burdensome rules," ICBA Chairman Jeffrey L. Gerhart said in a statement. "To help community banks restore our nation's economic growth, policymakers should build on the tiered approach to financial regulations that distinguishes between community banks and the nation's largest institutions."
Gerhart and the ICBA have plenty of support for their argument. Between 2007 and today, the ICBA says that there have been nearly 900 new and proposed rules that impact the banking industry. For a community bank, ensuring that the staff understands how those rules affect the institution can be challenging. With limited resources and small staffs, all that paperwork adds up to a very heavy load of work.
Between mortgage fraud and money laundering schemes, the banking industry as a whole has earned quite a negative reputation among everyday consumers, but community banks are working to separate themselves from the big banks tied to those activities.
"Community banks have little in common with Wall Street firms, megabanks or shadow banking institutions and did not cause the financial crisis or perpetrate abusive consumer practices," Camden R. Fine, president and CEO of ICBA, said.
What do you think? Should lawmakers consider giving community banks a break when it comes to dealing with banking regulations and compliance paperwork?