One Size Does Not Fit All

The community bank business model is nothing like the Wall Street business model. So why would we want Wall Street firms or mortgage banks to speak for us any more than they want us to speak for them? Therefore, I beg to differ with a recent op-ed about how “one size fits all.” With all due respect, one size does not fit all—it never has, nor should it.

Let’s all be honest here, Main Street community banks aren’t internationally active, worldwide, multi-trillion-dollar Wall Street banks and investment houses, and vice versa. Community banks have a unique business model; they deserve a unique voice and regulatory treatment, just as other financial stakeholders do. And while at times our issues and concerns may and do intersect, many times they do not. In fact, many times they are in direct conflict, and it is at those times that the nation’s 7,400 community banks need a clear, uncompromised and forceful voice in Washington. That is when they need ICBA. If nothing else, it keeps the other guys honest.

Remember, I sat behind a community bank desk for over 20 years. I saw how government and regulatory polices favored the mega-banks up close and personal. I had senior officials from the largest banks confide in me the advantages they enjoyed in everything from the cutoff amounts of examination “pull lists” to not ever facing a CRA examination in their scores of branch banks, some of which were just down the street from my bank. So, while my staff of 12 worked for weeks to prepare for the CRA and compliance exam, the branch bank down the street never saw an examiner.

And yet there are those that begrudge the community banks for wanting a fair premium assessment formula, or for not wanting another examination team flooding into their banks (we already have at least three examinations a year with nearly as many examiners as the bank has employees), or for wanting proportional regulations based on size and risk to the system.

On Main Street, we know one size does not fit all. So don’t try to convince us otherwise.

2 thoughts on “One Size Does Not Fit All

  1. Pingback: Blog » Groups differ over regulatory regime

  2. Cam, well stated blog. It is truly amazing that the regulators, congress and the majority of the public do not understand the implications of categorically putting all financial institutions together. It is up to all of us as community bankers to advocate- speak up, understand the regulations and communicate as effectively as possible. Banking a a community bank has more benefits that larger institutions. Use a financial planner for your investments as needed.

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