|
 |
 |
|
From Main Street to K Street
-
10/24/07 03:02 PM ET
When arriving in Washington, D.C. from Jefferson City, Mo., to lead the Independent Community Bankers of America (ICBA) as its chief executive, I had never run a trade association. I was a career community banker. I had organized and chartered one statewide community bank, and separately, my wife and I owned a small community bank in a town near Jefferson City.
As the CEO of a community bank in a small town, I competed against every type of financial organization — from the largest commercial banks to community credit unions. I experienced state and federal examinations. When you sit across the desk from a hard-nosed bank examiner who scrutinizes every piece of paper that you’ve signed since the last examination, you come to understand the community banking business as only a practitioner can.
Few things carry more credibility on Capitol Hill than when a local businessperson explains the real impact of lawmakers’ decisions on their business, customers and communities. In the four years I have been in Washington, I have found that my 20-plus years of day-to-day experience leading and managing community banks on Main Street has given me not only perspective and credibility on Capitol Hill and with the federal banking regulatory agencies, but the ability to speak with true passion and conviction.
The day after Hurricane Katrina hit New Orleans, I received phone calls from several community bankers desperately seeking help to get immediate credit for their daily transaction remittance letters that would normally be processed through the New Orleans Federal Reserve. All banks daily send transaction remittance letters to the Federal Reserve or other processors and are critical to a bank’s daily liquidity and ability to carry on cash and credit transactions with its customers.
Community bankers were frantic because no one was listening to their pleas to process and enter their daily transaction letters; all systems were down in and around New Orleans. As a longtime community banker, I knew how vital those daily remittance letters were to those New Orleans banks, and more importantly, their customers who were in desperate need of cash and credit.
I telephoned the Atlanta Federal Reserve Bank — the reserve bank responsible for New Orleans — where I knew the chief of operations. He was unaware of the problem and thanked me for alerting him to it. The problem was corrected that day. Immediate credit was extended and cash and credit began to flow again to those local banks.
As the president of ICBA, I moved quickly on behalf of the community banks in New Orleans because I understood bank operations from personal, practical experience. I understood their desperation in not being able to extend cash or credit to their customers and acted immediately to correct the situation.
Today, the single biggest challenge for community bankers is coping with regulatory burden — I know, I lived it. Most community bankers do not have the luxury of dedicated staff compliance and regulatory experts. My bank certainly did not. The typical community banker is a jack-of-all-trades, wearing many hats, and has limited time to focus on any one element of a complex, multi-faceted job.
When the banking agencies announce new guidelines, those guidelines can quickly turn into informal regulations. Some years ago the banking agencies issued new loan loss reserve guidelines for commercial real estate (CRE) suggesting that banks create an individual risk profile unique to that bank. The guidelines quickly turned into a de facto regulation. Woe to the banker whose unique risk profile for gauging proper loan loss levels did not fit the field examiners’ model guideline.
Having experienced several such instances in my banking career, when the banking agencies announced new CRE guidelines in early 2006, I immediately met with the heads of the agencies to explain that their well-intended guidelines would turn into de facto regulations even before being fully examined and that hundreds of community banks and their customers could suffer as a result.
Our association’s concerns were heard. The CRE guidelines were modified so that unintended consequences were minimized. I like to think that my longtime experience as a community banker helped bring about a more favorable result for the community banks that our association represents.
Like the local businessperson who comes to Capitol Hill to tell the real-world story, the lessons I learned on Main Street America as a career community banker make all the difference in building credibility among lawmakers, regulators and the grassroots membership. Experiences on Main Street translate into effective advocacy on Capitol Hill.
Fine is the president & CEO of the Independent Community Bankers of America.
As the CEO of a community bank in a small town, I competed against every type of financial organization — from the largest commercial banks to community credit unions. I experienced state and federal examinations. When you sit across the desk from a hard-nosed bank examiner who scrutinizes every piece of paper that you’ve signed since the last examination, you come to understand the community banking business as only a practitioner can.
The day after Hurricane Katrina hit New Orleans, I received phone calls from several community bankers desperately seeking help to get immediate credit for their daily transaction remittance letters that would normally be processed through the New Orleans Federal Reserve. All banks daily send transaction remittance letters to the Federal Reserve or other processors and are critical to a bank’s daily liquidity and ability to carry on cash and credit transactions with its customers.
Community bankers were frantic because no one was listening to their pleas to process and enter their daily transaction letters; all systems were down in and around New Orleans. As a longtime community banker, I knew how vital those daily remittance letters were to those New Orleans banks, and more importantly, their customers who were in desperate need of cash and credit.
I telephoned the Atlanta Federal Reserve Bank — the reserve bank responsible for New Orleans — where I knew the chief of operations. He was unaware of the problem and thanked me for alerting him to it. The problem was corrected that day. Immediate credit was extended and cash and credit began to flow again to those local banks.
As the president of ICBA, I moved quickly on behalf of the community banks in New Orleans because I understood bank operations from personal, practical experience. I understood their desperation in not being able to extend cash or credit to their customers and acted immediately to correct the situation.
Today, the single biggest challenge for community bankers is coping with regulatory burden — I know, I lived it. Most community bankers do not have the luxury of dedicated staff compliance and regulatory experts. My bank certainly did not. The typical community banker is a jack-of-all-trades, wearing many hats, and has limited time to focus on any one element of a complex, multi-faceted job.
When the banking agencies announce new guidelines, those guidelines can quickly turn into informal regulations. Some years ago the banking agencies issued new loan loss reserve guidelines for commercial real estate (CRE) suggesting that banks create an individual risk profile unique to that bank. The guidelines quickly turned into a de facto regulation. Woe to the banker whose unique risk profile for gauging proper loan loss levels did not fit the field examiners’ model guideline.
Having experienced several such instances in my banking career, when the banking agencies announced new CRE guidelines in early 2006, I immediately met with the heads of the agencies to explain that their well-intended guidelines would turn into de facto regulations even before being fully examined and that hundreds of community banks and their customers could suffer as a result.
Our association’s concerns were heard. The CRE guidelines were modified so that unintended consequences were minimized. I like to think that my longtime experience as a community banker helped bring about a more favorable result for the community banks that our association represents.
Like the local businessperson who comes to Capitol Hill to tell the real-world story, the lessons I learned on Main Street America as a career community banker make all the difference in building credibility among lawmakers, regulators and the grassroots membership. Experiences on Main Street translate into effective advocacy on Capitol Hill.
Fine is the president & CEO of the Independent Community Bankers of America.
Most Viewed RSS Feed »
