Compliance Issues to Watch in 2017

The regulatory front offers the possibility for meaningful regulatory relief, but the timetable for obtaining that relief is uncertain. Although ABA staff are working now with members to identify regulatory changes that will encourage economic growth, we may not see results immediately, says ABA SVP Virginia O’Neill, who leads the association’s Center for Regulatory Compliance.

This is because the top officials of the independent banking agencies have terms that do not expire with the inauguration of a new president. Continue reading “Compliance Issues to Watch in 2017”

Pillar of Her Community

Dorothy Savarese tells a story about a humbling discovery she made shortly after moving to Cape Cod and how it reflects the heart of community banking.

She already had 16 years of experience in economic development and at a large regional bank in the Midwest. She had taught credit analysis on a national basis. So when she arrived on the Cape and started work as a commercial lender at the Cape Cod Five Cents Savings Bank, “I looked at the credits here and the way they had been written up in the past, and they certainly didn’t meet my standards of documentation or credit underwriting,” she says—noting that they were short on financial analysis and long on character analysis.

“One of the things they had used long before I arrived to judge the creditworthiness of a customer was how neat their woodpile was,” she says. “If they did not have a neat woodpile, they would not make a loan to that customer.”

Continue reading “Pillar of Her Community”

Capturing Mobile Banking ROI for Community Banks

Offering mobile banking is often described as the “price of admission” or “table stakes” for retail banking today. Surveys bear that out—according to a recent survey by the Federal Reserve and the Conference of State Bank Supervisors, 95 percent of community banks offer mobile banking or will do so in the near future.

But while mobile banking is becoming universal, it can still cause heartburn for bankers uncertain about the return on investment. How can bankers quantify the efficiencies, savings, sales and ultimately profits that they hope mobile will bring? Continue reading “Capturing Mobile Banking ROI for Community Banks”

How Banks Drive Growth in American Manufacturing

Manufacturing is having a moment. From custom 3-D printed cars to bandages that can provide health readings to photonics technology that is making Hollywood sci-fi fantasies real, manufacturers are deploying cutting-edge technology to improve their processes, offer better products and boost the productivity of the American economy. This revolution in manufacturing, which has emerged as the industry has recovered a million jobs post-recession and charged … Continue reading How Banks Drive Growth in American Manufacturing

How Bank Startups Build Leaders

The year is only half past, but 2016 is well on its way to joining 2011, 2012 and 2014 in a dubious distinction: a year that zero new U.S. banks were chartered. As consolidation of existing banks continues, many have observed that the lack of new banks reflects burdensome regulatory compliance, an inhospitable interest rate environment, excessive capital requirements, an insufficiently robust economy—or some mixture of all of these.

In his classic 1946 book Economics in One Lesson, Henry Hazlitt writes that economics “is the science of tracing the effects of some proposed or existing policy not only on some special interest in the short run, but on the general interest in the long run.” And thus, while the drought of de novo banks will ripple through the American economy, it will have subtle, significant and virtually unexplored long-run effects on the next generation of bank leadership. Continue reading “How Bank Startups Build Leaders”

(Not) Going to the Chapel

We’ve only just begun to live
White lace and promises
A kiss for luck and we’re on our way

While you may be familiar with the Carpenters’ number-one 1970 hit “We’ve Only Just Begun,” you probably didn’t know that the song got its start as the soundtrack to a bank commercial.

Over wordless, soft-focus, close-up scenes of a young couple getting married in a California country church, the singer croons about the adventures the newlyweds have in store. The ad concludes with the couple driving off into the evening, followed by the words: “You’ve got a long way to go. We’d like to get you there. The Crocker Bank.” Continue reading “(Not) Going to the Chapel”

Small Business: A Competitive Edge for Community Banks

According to Harvard’s Kennedy School, community banks account for more than half of small business loan volume and nearly half of commercial real estate lending. It’s not an exaggeration to say that the health of hometown economies depends on having healthy community banks engaged in robust, properly underwritten small business loans.

Those community banks face many challenges, from growing nonbank competition to a difficult economic environment that drives looser underwriting standards. But their CEOs are building strategies for success that leverage community banks’ unique strengths to maintain their leadership in the small business lending franchise. Continue reading “Small Business: A Competitive Edge for Community Banks”

Demographic Destiny for Community Banks?

In their best-selling mid-20th century books of U.S. electoral politics, analysts Richard Scammon and Ben Wattenberg were fond of saying that “demography is destiny.” The same is true in the community banking sector.

As populations age in rural areas and shift from suburbia and the country to big cities—and as the baby boomers give way in the workforce to millennials—demographic changes will be felt keenly by community bankers. During a recent roundtable discussion with four top community bank executives, strategies for navigating these changes came to the fore. Continue reading “Demographic Destiny for Community Banks?”

How to Understand and Partner with Marketplace Lenders

Bankers who think they aren’t facing competition from nonbank marketplace lenders should take a closer look, according to bank technology leaders speaking at ABA’s National Conference for Community Bankers in Palm Desert, Calif.

At Boston-based Eastern Bank, chief digital officer Dan O’Malley led an effort to review transaction data from across the bank’s deposit accounts and extract intelligence. “It’s eye-opening to see how many of your customers—both consumers and small businesses—are taking loans from alternative providers” like Lending Club, he says, noting that 5 percent of Eastern’s business customers are making payments to a nonbank marketplace lender and that the rate has been doubling annually. Continue reading “How to Understand and Partner with Marketplace Lenders”

ABA Raises CECL Concerns During Long-Awaited FASB Meeting

During a sometimes-heated roundtable conversation today, ABA staff and member bankers raised important concerns about the Financial Standards Accounting Board’s proposed Current Expected Credit Loss model for loan loss accounting. FASB board members said they would address several of ABA’s concerns as the final standard is issued and implementation proceeds over the next few years.

The roundtable was convened after two years of requests from ABA, which has long argued that the weightiness of the accounting changes envisioned warranted more intensive public discussions. Continue reading “ABA Raises CECL Concerns During Long-Awaited FASB Meeting”