Community bank regulatory crossfire

After surveying its Community bank members to learn their top concerns, Community Bank Council meets annually with the regulatory agencies in Washington, DC, to discuss those issues. This year's audio-conference took place in June, and the representatives of the regulatory agencies addressed th...

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Bibliographic Details
Published in:The RMA Journal 2006-09, Vol.89 (1), p.40
Main Author: Foster, Beverly
Format: Article
Language:English
Subjects:
Bank compliance
Bank examinations
Bank examiners
Banking law
Cash flow
Commercial real estate
Community banks
Compliance
Conferences
Interest rates
Loans
Loss reserves
Regulation of financial institutions
Regulatory agencies
Risk management
Surveys
Underwriting
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Summary:After surveying its Community bank members to learn their top concerns, Community Bank Council meets annually with the regulatory agencies in Washington, DC, to discuss those issues. This year's audio-conference took place in June, and the representatives of the regulatory agencies addressed three major topics: 1. credit quality and underwriting standards, 2. proposed guidance on commercial real estate concentrations, and 3. the regulatory burden. As one regulator pointed out, many banks are now pricing for competition -- not pricing for risk, particularly as credit has become more commoditized. A number of banks have reported pushback from their accountants on the allowance for loan loss reserves, said a panelist. During the audioconference, in response to a question from the audience, a panelist said that some banks are not necessarily evaluating the cost/risk trade-off appropriately. Those banks that have had a sea change in their risk profiles should not expect that risk management can be business as usual.
ISSN:1531-0558