Regulatory burdens on the banking industry have grown dramatically in recent years, stretching the resources of banks across the country and hindering their ability to help local businesses grow and create jobs.
Local members of the California Bankers Association are supporting several philanthropic endeavors in the Central Valley community, via the Central Valley Business Times. For example, in 2016 CBA member banks across California donated nearly $82 million.
As bankers continue to survey losses associated with the catastrophic wildfires wreaking havoc in Northern California and some southern portions of the state, housing appears to be a top concern. CBA President & CEO Simone Lagomarsino discusses how bankers are working
together to rebuild communities.
Governor Jerry Brown has proclaimed a state of emergency in the following counties due to the effects of the California wildfires which has damaged structures and infrastructure, threatened homes, and caused the evacuation of residents.
Consequently, Commissioner of Business Oversight Jan Lynn Owen has determined that an extraordinary situation exists in the counties and has issued a proclamation authorizing state-chartered banks to close any or all of their offices in affected areas until the Commissioner determines the extraordinary condition has ended.
Regulators ensure that the banks they supervise comply with all rules and regulations by having examiners visit banks on a regular basis to review their books. Although the details vary by the size and complexity of the institution, a bank “examination” consists of a detailed scrutiny of bank assets, liabilities, income and expenses. The exam process is designed to confirm that the bank is safe and sound, maintains accurate financial statements, and is properly following all applicable laws and regulations.
Commercial banks play a major role in offering customized mortgages and consumer loans tailored to fit the unique characteristic of borrowers within their communities. Banks also are oftentimes the sole financial service provider in many of our nation’s smallest rural small towns. However, the compliance burdens and risks imposed by several requirements of the Dodd-Frank Act (DFA) and implementing regulations, particularly in the area of mortgage credit, have had negative impacts on banks, their customers and the housing market.
Federal legislation, the Community Lending Enhancement and Regulatory Relief (CLEAR) Act, has been introduced in the Senate and the House that would relieve regulatory burdens on community banks. Sens. Jerry Moran (R-KS), Jon Tester (D-MT), and Mark Kirk (R-IL) have introduced S. 1349 in the Senate, and Rep. Blaine Luetkemeyer (R-MO) has introduced H.R. 1750 in the House. The CLEAR Act is part of a sincere effort underway in Congress to address community banks’ concerns with growing regulatory burdens.