Community Banks Urged to Unite Behind Exam Reform Bill

There was slightly less gloom and doom from attendees at this year's American Bankers Association Conference for Community Bankers, though most are still smarting from a stagnant economy and seething from the dealings with regulators.

To be sure, the improved tenor seemed closely related to the banks represented at the conference. A significant number of bankers who made the trek to Palm Desert, Calif., represented banks blessed to be in markets supported by strong energy industries or mutual thrifts that are flush with capital.

Workshops also were geared to making the most out of a suboptimal situation, focusing on ways to wring out revenue in the midst of regulatory restrictions and how to drum up capital from investors who generally seem reluctant to infuse cash for the foreseeable future.

The association's leadership used the conference to push unity. They offered a mea culpa of sorts, accepting partial blame for letting legislators divide the industry in the build-up to passing the Dodd-Frank Act. Community bankers, now more than ever, must push lawmakers hard to support a House bill that would set up an independent appeals process for banks. Regulators have already voiced objections to the bill, sponsored by Republican Rep. Shelley Moore Capito and Democratic Rep. Carolyn Maloney.

"We came across to Congress as divided" over Dodd-Frank, said Frank Keating, the association's president, during his address to bankers on Monday. "We can be divided behind closed doors … but in public we have to be united. We need to get noisy, both individually and collectively,"

"The ground is laid for us to get this [exam reform] bill through," added Albert "Kell" Kelley, the president and chief executive of SpiritBank in Bristow, Okla., and the association's 2012 chairman.

While forceful in rallying bankers around legislative issues, Keating and Kelly provided scant assurance that the operating environment was getting any better. During a question-and-answer session, the officers were asked to give examples of how things were improving. Other than a generic reference to "green shoots" in the economy, Keating was unable to provide solace that conditions were better.

Keating, however, said he is seeing "signs of optimism" on the regulatory front. He said Richard Cordray, the new director of the Consumer Financial Protection Bureau, seems "willing to listen" and give markets a chance to sort through some issues. He also had positive things to say about Martin Gruenberg, the interim chairman of the Federal Deposit Insurance Corp., and Thomas Curry, who is still awaiting approval to lead the Office of the Comptroller of the Currency.

"There are a lot of sensible people" poised to lead top regulatory agencies, Keating said.