Pub. 6 2017 Issue 4

21 w i n t e r | 2017 F I N E P O I N T S megabank model—designed to squeeze every last cent from customers—is what gave us the Wells Fargo phony-accounts scandal. Of course, regulatory burden con- tributes greatly to the problem. A recent survey from the Federal Reserve and Conference of State Bank Supervisors found that community bank compliance costs have increased by nearly $1 billion in the past two years to roughly $5.4 billion, or 24 percent of community bank net income. Of the respondents who said they considered an acquisition offer in the past year, virtually all (96.7 per- cent) said regulatory costs were a “very important,” “important” or “moderately important” reason. Further, the Federal Reserve Bank of Richmond has found that regulatory costs contribute to the dearth of de novo applications. Because of the role US financial regu - lation plays in industry consolidation, this is a public policy issue that must be dealt with before it’s too late. ICBA has long advocated a more tailored approach to bank regulation, with rules tiered to the size and risk profile of regulated institutions. Now is the time for policy- makers to finally heed our calls. Community banking has contrib- uted greatly to the nation’s growth and development over the past century and a half. It is synonymous with the American traditions of independence, self-reliance and entrepreneurship. The declining number of US banks is not a trend to be encouraged but a problem to be fixed to maintain a diverse and decentralized system that ensures continued access to financial services for all Americans. Not all banks are the same, and the com- munity banking industry’s role in our industry should not be diminished. Follow Camden R. Fine on Twitter, @Cam_Fine President & CEO Camden R. Fine Washington camden.r.fine@icba.org @cam_fine