Regulation

Reminders for regulators

Regulatory agencies are supposed to enforce laws written by Congress. Activist regulators who want to take matters beyond the letter of the law have a right like anyone else to work the political system to change the law. [Continue]

Regulation — then and now

Things change over time, and if you go back far enough, differences can be dramatic. I cite the regulatory environment for community banks as an example. [Continue]

Maybe we don’t need to change deposit insurance

The systemically-important or too-big-to-fail advantage increases the relative cost of funding for community banks. Government can only resolve this unlevel playing field by protecting all deposits at all banks. But that doesn’t mean it should do so.  [Continue]

Retirements cause leadership shake-up at region’s Fed Banks

Charles Evans and Esther George were both born on January 15, 1958, which means they bumped up against the Federal Reserve’s mandatory retirement age for bank presidents last month. Leadership changes, therefore, are underway at the Chicago and Kansas City Federal Reserve Banks: Austan Goolsbee was named the new president and CEO of the Federal Reserve Bank of Chicago. The Federal Reserve Bank of Kansas City has yet to permanently fill the vacancy created by George’s departure; she was replaced on an interim basis by Kelly Dubbert, first vice president and chief operating officer.  [Continue]

Climate risk ahead? How your bank can prepare

Climate risk, or the risk that climate-related changes pose to financial institutions, is demanding more and more attention from researchers, regulators and boards of directors. What are the federal regulatory agencies saying about climate risk? And what are the key areas your board and senior management should begin thinking about? [Continue]

Shaping strategy in a post-pandemic era

For many banks 2020 and 2021 had surprising results. Liquidity and capital were strong, loan growth escalated from pent up demand, and income levels were favorable. These positive trends could lead many management teams to sit back and ride the wave, living in the “here and now.” However, complacency can lead to risk. In its 2022 Bank Supervision Operating Plan, the Office of the Comptroller of the Currency lists guarding against complacency as a top priority for examiners. [Continue]

Regulators propose CRA reform

Last month, the bank regulatory agencies issued a joint notice of proposed rulemaking to update the Community Reinvestment Act. Enacted in 1977, the law was last updated in 1995. Comments on the proposal, which is nearly 700 pages long, are due August 5. I encourage you to wade through the document and either comment directly or work with your trade group to make your voice heard. [Continue]

ESG frameworks: Why bankers should care

Environmental, social and governance policies have increasingly become a focus of bank investors, regulators and customers. Bank boards must work collaboratively with management to create a framework to implement these policies, including board committee composition, risk identification, goal-setting, performance measurement and disclosure of sustainability practices.  [Continue]

​​Innovation must be built on foundation of trust

The financial services industry has experienced rapid technological change [which] continues to encourage new ways of interacting with and serving customers. Such innovation creates important opportunities for banks of all sizes. When banks can be agile in developing relationships with third-party providers to meet unique customer needs, they can find their own paths to innovation. [Continue]