Gov't Shutdown Will Hurt Community Banks: Fine

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Oct. 2 (Bloomberg) -- Camden Fine, president and CEO of the Independent Commercial Bankers of America, discusses the outlook for community banking with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

Big challenges including compliance with tougher regulations.

Are those the top two concerns of your membership?

Yes, absolutely.

Regulatory burden or revelatory crush and a very slowly recovering economy but it is much too slow for our purposes.

The chairman nailed it.

Why do you think it took the fed so long to address the concerns of the nation's small banks and is the central bank now doing enough to address those concerns?

We appreciate the chairman's remarks very, very much and this focuses are concerned that the fed and in the financial sector at large.

That is all very positive.

The fed did react to community bank concerns last year when they began to modify the basel three capital court so i think they have been listening.

I wish they would translate the chairman's words into more concrete action.

It has been the contention of the small banks that their size would prohibit them from triggering a worldwide financial meltdown.

How surprised were you when the framework was applied to most u.s. community banks?

Frankly we were shocked.

He had been assured in years past that those international capital accords would not be applied to our banks and when they were, we were shocked.

That is the only word you can use and we pushed back very hard and we have had some success in moderating those rules for community banks.

The process of stress testing smaller financial firms began yesterday.

How does it ever from the testing of large banks?

It is what i would call stress test light.

Kind of like the diet coke of stress tests.

It is not as complex and on the very smallest banks, there are not stress tests at all.

The stress test for small bank is called a bank examination.

The smaller banks emma they have said the regulatory changes including basel and dodd frank put them at a disadvantage.

That has not held back there profits or the shares which are getting larger numbers.

How do you explain that?

You're talking about the largest amenity banks that are publicly traded.

Their shares are doing better but i attribute some of that to the fact that they he come nice takeover targets for consolidation and so investors are betting.

There are 6000 privately held community banks in this nation.

6000. those banks are being buried under regulatory crush and believe me, their margins and profits have been suffering.

How will the change in standards allow regional and community banks to, as the fed said, just their internal systems?

Is slow.

A lot of community banks depend on third-party providers and those providers are trying to catch up to the regulations and it comes back to what the chairman said.

Regulatory crash and we have to overcome that.

We have to lighten the burden and that will allow the economy to pick up a the local level and translate to a national level.

The shutdown of the government, is that affecting you and your membership to my what are they telling you?

If it lasts longer, yes, it will impact negatively the community banks of this nation.

It will drive pricing up in the bond market.

It will affect their securities portfolios.

It is never good when the government shuts down.

Camden fine joining me from

This text has been automatically generated. It may not be 100% accurate.


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