A strong contingent of 30 bankers participated in the Indiana Bankers Association Annual Washington Lobbying Trip last week. These community bankers were unequivocal in letting lawmakers know that they are watching closely and will hold lawmakers accountable for their voting records.
In particular, our bankers respectfully expressed their anger at Sen. Richard Lugar’s vote against them on the Durbin Interchange Amendment, gutting debit card revenue. Most disturbing was the fact that the long-time senator never bothered to meet with anyone from the IBA on this important issue. Instead he had aides meet with bankers, and then had aides reach out to bankers after the vote, when bankers were communicating their ire. These bankers demanded that Sen. Lugar meet with them in the future and consider their position prior to making decisions that impact the banking industry. Only time will tell if the Senator reaches out in the future.
These banking leaders from throughout Indiana also met with senior staff members of the Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, Federal Reserve Bank and the new Consumer Financial Protection Bureau (CFPB). During each of those meetings, bankers expressed their frustration of overly egregious examinations and cited numerous examples to validate their arguments.
While the new CFPB does not have examination powers over banks of less than $10 billion in assets, it is formulating a plan to collect HMDA-like data on small business loans. This step will undoubtedly create a significant additional paperwork burden for community banks.
The FDIC claimed to the Indiana delegation that it has communicated to its field examiners to be more reasonable. Again we cited many cases in which reason did not prevail, especially on the consumer compliance front.
The OCC described the 80 working groups it has assembled to write the regulations mandated by the Dodd-Frank Act. Our bankers pointed out that, on average, they each have only 40 employees, who will have to review, evaluate and often comply with the results of that work. Plus it is likely that FDIC, CFPB and Fed will write a like amount of rules. How will the average bank, with its 40 employees, be able to absorb and comply with as many as 300 new rules … and still honor its core business of serving customers? None of these agencies seemed to have an answer to that question!