A First Step

Recently I was invited to attend a regional meeting hosted by the Federal Deposit Insurance Corp., held on May 30 in Chicago. The topic was the future of community banking. The event was one of a series of six meetings to take place nationwide, following an initial meeting held in Washington, DC. Joe Pierce of Farmers State Bank, LaGrange, participated in the DC event. Karen Miller of The Farmers Bank, Frankfort, served as a panelist at the Chicago meeting. David Morrison, Ossian State Bank, and David Mills, director of the Indiana Department of Financial Institutions, also were in attendance in Chicago.

The moderator was Marty Gruenberg, FDIC acting director. He was accompanied by three top FDIC executives: Anthony Lowe, Chicago regional director; Mark Pearce, who administers over all of the compliance examinations; and Sandra Thompson, who is responsible for safety and soundness examinations.

Director Gruenberg has a well-documented appreciation for community banking. These meetings are being held at his request, to address his concern that there has not been any comprehensive study done in the past 25 years to determine what is happening with community banks.

It was clear from the outset of the Chicago meeting that these FDIC leaders have a finger on the pulse of what community bankers are facing. By contrast, the banking community has long felt frustrated with a lack of basic knowledge among FDIC field examiners. It was a pleasant surprise, then, to find that the situation has improved markedly; nearly all of the bankers on the panel complimented the FDIC on the professionalism of recent examinations.

Looking ahead to the next five to 10 years, the panel identified the following as community bank concerns:

  1. Identifying, recruiting and retaining competent bank directors;
  2. Determining acceptable risks in a less-predictable economic environment;
  3. Managing the burden of excessive regulation; and
  4. Competing technologically for customers.

Identifying potential problems is the first step toward creating solutions. I applaud Director Gruenberg’s foresight in hosting these meetings, and I appreciate the opportunity to observe.

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