One Size Does Not Fit All
Community banks have a unique business model which is nothing like the Wall Street business model. As such, we deserve a unique voice and regulatory treatment just like any other business. For years community banks have heard that we should support the banking industry position on all banking issues so that our industry could speak with one voice. Well I say, due to the differences in the size and scope of banks today, it is time to recognize that our business models are very different.
Community banks are not internationally active, worldwide, or multi-trillion-dollar investment houses. Community banks, whose business is based on one-on-one customer relationships, have called for regulatory restraint and proportional regulation separate from the mega banks. Some have begrudged community banks for having had some recent success in persuading the FDIC to change its premium assessment formula to be fair based on bank size and for not wanting another examination team flooding into our bank. Financial regulation is enacted to correct and prohibit bad practices in the marketplace and the vast majority of bad practices are perpetuated by lightly regulated large financial firms.
Today we are staggering under mountains of regulatory burden passed by Congress to control the wrongdoings of the nation’s largest financial firms. It is time for community banks to speak up and use our own voice to make the case whenever possible that regulation should be applied to those who engage in bad acts or practices and should not be enacted universally as in the past. On Main Street, we know one size does not fit all.