Community banks feel weight of more regs

The next time a banker complains about over-regulation he will have some muscle to back up the vent.

In fact, the Independent Community Bankers of America, a leading lobbying group, recently reported that 900 new and proposed rules have been entered into the Federal Register since 2007. These regulations, say ICBA officials, have a steep cost.

For example, the organization cites a Federal Reserve study, one that predates the onslaught of rules, which says “the most burdensome regulations amounted to more than 14% of community bank operating expenses.” ICBA officials worry that things will only get worse for community banks. Smaller banks are in especially tenuous positions, given many already operate on thin margins.

“To alleviate the burden of excessive regulation on the nation's community banks, ICBA is calling on policymakers to carve out community banks from new regulations while continuing to pursue tiered regulation that distinguishes between community banks and larger and riskier institutions,” ICBA President and CEO Camden Fine says in a statement. “Community banks have little in common with Wall Street firms, megabanks or shadow banking institutions and did not cause the financial crisis or perpetrate abusive consumer practices.”