A Voice That Must Be Heard

“You say it again, and you say it again, and you say it again, and you say it again, and you say it again, and then again and again and again and again, and about the time that you’re absolutely sick of saying it is about the time that your target audience has heard it for the first time.”

Frank Luntz, political strategist

Community bankers aren’t the type to hold back an opinion, whether it’s offering advice to a small-business customer or weighing in on how to promote local economic activity. But in this age of short news cycles and even shorter attention spans, community bankers have to be willing to tell their story time and time again to connect with policymakers and the broader public.

The future of the industry depends on our ability to speak out passionately and directly. And with ICBA Community Banking Month and the countdown to the ICBA Washington Policy Summit underway, now is the time for community bankers to make their voice heard loud and clear. That’s why ICBA is offering a variety of resources to help community bankers spread the industry’s message.CheckOutInfographic

The ICBA Community Banking Month website offers resources that community bankers can use to espouse the benefits of community banking, including a custom news release and op-ed, sample social media updates, and an infographic. It also offers a custom letter to Congress that community bank customers can use to advocate on behalf of the industry to their lawmakers.

Meanwhile, community bankers can continue the industry’s push for regulatory relief and other important policy goals at this month’s ICBA Washington Policy Summit. Scheduled for April 24-27 in the nation’s capital, the summit allows community bankers to meet directly with their members of Congress and regulators to advance smarter banking policies.

As ICBA Chairman Rebeca Romero Rainey said at last month’s ICBA Community Banking LIVE convention, each community bank has a unique story of how they serve their local communities and make an individualized impact on their customers. Our industry’s success depends on our ability to share that story—to the people in our communities, to the news media, to the policymakers who establish the laws we live by, and to the next generation of community bankers.

So let’s tap into that and tell the community banking story—again and again. While you might get tired of repeating the benefits of banking locally and the need for policymakers to allow this system to thrive, we owe it to our communities, our economy and the future of our industry to make sure our voices are truly heard.

Study Affirms Community Banks’ Small-Biz Leadership

It’s something ICBA and the community banking industry say all the time: community banks are the nation’s leading small-business lenders. And the numbers back it up. While community banks make up less than 20 percent of the banking system’s assets, they dole out more than half of its small-business loans.

Still, some small businesses continue to test their alternatives: megabanks, credit unions, and now online lenders. The latest set of numbers shows that these businesses should stick with a community bank.

According to a new study from seven Federal Reserve Banks, small businesses that apply for loans with community banks are the most successful and most satisfied.

Here’s what the study found:

  • Community banks were the most likely to make a loan, extending financing to 76 percent of loan applicants while large banks approved just 58 percent.
  • Community banks also had the highest satisfaction scores, with 75 percent reporting that they were satisfied with their overall experience, compared with scores of 56 percent for credit unions and 51 percent for large banks.
  • While online lenders had the second-highest rate of approval at 71 percent, just 15 percent of borrowers said they were satisfied with the experience.
  • Of the firms that were dissatisfied with their experience with online lenders, 70 percent cited high interest rates and 51 percent reported unfavorable repayment terms.

16.03.30_FRB_Small_Biz_StudyWith the amount of blood, sweat and tears that goes into launching a startup or expanding a small business, entrepreneurs should know that they have a partner in their local community bank. That is more important now than ever before, as demonstrated in a 2014 ICBA study that found that 41 percent of Millennials say they are very interested in starting up their own business.

So community bankers, let’s continue to spread the word about the importance of our industry in getting small businesses off the ground and taking our economy along with them. It’s an important message that everyone needs to hear, and now we have even more data to back it up.

Mortgage Relief Recognizes Community Banks’ Unique Role

It was a long time coming, but persistence paid off when the Consumer Financial Protection Bureau recently updated its mortgage regulations to ease unnecessary restrictions on many community banks. Under an interim final rule, the CFPB expanded Qualified Mortgage eligibility for balloon loans held in portfolio and exempted more rural lenders from escrow mandates.

That might sound a little complicated to the layman. But all it really means is that Washington regulators will allow many community bankers to keep doing what they’ve done for years—making mortgage loans that meet the unique needs of their customers and communities.

And that’s really the heart of the matter here. This isn’t an example of ICBA, our affiliated state associations and community bankers achieving some abstract policy goal. No, this is a case of policymakers acknowledging the benefit of a service that community bankers have offered for generations.

The case for reform has been overwhelming. According to the ICBA Community Bank Lending Survey released last year, three-quarters of respondents said regulatory burdens are keeping them from making more residential mortgage loans. Half of all rural banks said they did not qualify for the QM rule’s “rural” exception. That report followed the release of ICBA’s 2013 Community Bank Qualified Mortgage Survey, which found that less than half of those offering balloon loans would qualify for the QM rule’s balloon mortgage exception.

Ultimately, it was this hard evidence combined with dogged initiative that saw crucial reforms all the way through—from winning portfolio QM treatment for small creditors in the original rule, to achieving the CFPB’s expanded definition of “rural area,” to the additional relief that advanced last December in the FAST Act. In fact, we still want to take this even further and implement QM safe harbor treatment and escrow relief for all community bank loans originated and held in portfolio.

I’m thrilled that our persistence has paid off—that the concerns of ICBA have been heard and that thousands of community banks and the customers they serve will regain access to mortgage credit. And I’m thankful for all the hard work that community bankers and the state associations have put into their advocacy. But more than anything, I’m hopeful that this development reminds policymakers that community banks are and always have been in the business of serving local communities—something that Washington should be looking to promote, not regulate out of business.

The Story I Heard in New Orleans

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It’s a funny thing. The buildup to the ICBA Community Banking LIVE® national convention is a massive undertaking, one that uses up every ounce of energy from ICBA bankers and staff. But rather than coming home exhausted, once again I’ve come home feeling more energized than before.

How does that happen? Am I delirious with exhaustion after a year of painstaking groundwork? Was I hypnotized by the menagerie of workshops, events and Expo demonstrations? I mostly steered clear of the raw oysters and hurricanes, so it’s not something I ate.

No, I’m energized by what I saw and heard from thousands of community bankers at the convention. It was the more than 3,000 members of our industry taking pride in our accomplishments, our public service, and our local, personal, community banking model.

It was ICBA Immediate Past Chairman Jack Hartings calling on every one of us to stand up, speak up and step up. It was new ICBA Chairman Rebeca Romero Rainey reminding community bankers that what we do matters. Reminding us to tell our story—to our customers, to our communities, and to the policymakers who set the rules we live by.

Witnessing that story being told is what energizes me. While every community banker tells it a little bit differently, the message of integrity, accountability and local involvement is always there. And the beauty of the community banking story is that it’s 100 percent genuine—no spin, no tricks, no double-dealing.

So don’t be shy—tell our story loud and clear. Whether it’s celebrating Community Banking Month in April, coming to the nation’s capital for the ICBA Washington Policy Summit, or simply spreading the word about what community banking means in your hometown—speak up for all to hear!

By sharing our story, we can support stronger communities, promote a more resilient economy, and protect our nation from the ills of excessive financial concentration. And after years of hard work and commitment, we can replenish in ourselves the energy and the true grit it takes to bring that story to life every day.

Thank you, community bankers, for doing what you do and for putting on another powerful and fulfilling convention.