The listening tour that FDIC Chair Jelena McWIlliams began a year ago when her five-year term began brought her to Minneapolis on June 11. She stressed the importance of regulatory relief for community banks, declaring “I don’t think Basel should apply to community banks.”
She made her comments to bankers gathered for the annual meeting of the Minnesota Bankers Association. In comments to a reporter prior to her presentation, she said one year and one week into her term, she feels she is on track to accomplish her goals for her chairmanship. “I want to make sure I understand the timeline and that I can fit in what I want to do in the next four years,” she said. “I don’t want to have a five-year plan with only four years left as chair.”
She said her goals are evolving, and they are dependent upon the comments she is receiving from bankers as she travels around the country. The FDIC published this map to demonstrate the travel she has undertaken. “For example, one banker recently asked me if bankers could get CRA credit for supporting broadband internet service in their rural community. Hmmm, I thought that was different,” she said. “But I can see where an area needs reliable internet service to use internet banking services. This gives us something to think about.”
CRA reform, she said, is an agency priority. She said she meets weekly by phone or in person with Fed Gov. Lael Brainard and Comptroller Joseph Otting to talk about progress being made on the inter-agency effort to modernize the law originally passed in 1977.
“We have an agreement in principle. It is when you start drafting and you get into the nuances that it becomes difficult. We are working on a draft. It is going to have to evolve through several iterations,” she said. The work is data-driven, with each agency specializing in slightly different data sets, she said. “The FDIC has more deposit data. So as we look at data will be able to analyze the impact of what we are proposing,” she commented.
“We are looking at how banks do when they have both digital presence and branch presence versus only digital presence,” she explained. “Another question is how to account for the assessment area when the bank is solely digital. We are considering whether new categories of products and services should qualify for CRA credit. That’s all on the table.”
McWilliams noted CRA has been on the books a long time. “There was a little tweak in the law in the early 2000s, but there hasn’t been a revision since 1995. Things have changed since then.”