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Bankers have reacted well to acting FDIC chief Gruenberg's first speech since taking helm of the agency, but say actions will speak louder than words.
September 27
SAN ANTONIO — Acting Federal Deposit Insurance Corp. Chairman Martin Gruenberg provided perhaps his strongest support yet for community banks on Tuesday, stating that looking after smaller institutions is an important component of the agency's role as a policy advocate.
Speaking at the American Bankers' Associations annual conference, he told attendees that there is "a public interest to be served" by protecting smaller institutions. "Community banks have a role to play in our financial system," he said, particularly with small business lending and providing services in rural markets. "Community banking is a niche … that is unique."
"At the FDIC, there is a strong interest in having a dynamic community banking presence in the industry," Gruenberg said.
Gruenberg has taken a few opportunities in recent weeks to voice his support for community banks, beginning with an address at American Banker's Regulatory Symposium in September. At that event, Gruenberg called the agency's overall effort to address community banking a "major priority" in the near future.
Still, a number of community bankers were cautious to declare a sea change in FDIC policies towards smaller institutions.
"It's nice to hear someone at his level say" that community banks are important, said John Boyer 4th, the chairman and CEO at Kanza Bank in Kingman, Kan. Kanza is a family owned bank with roughly $200 million in assets. "But it is not a new message. I'm still a bit skeptical and I want to see how it plays out."
G. William Beale, the chief executive of Union First Market Bancshares Corp. in Richmond, Va., agreed. "It was certainly a better tone today compared to his predecessor," Beale said, referred to former FDIC chairman Sheila Bair. (At $3.9 billion in assets, Union First would actually be larger than Gruenberg's definition of a community bank.)
"We need to be regulated differently and not with the same intensity at BB&T or Wells Fargo," Beale added. "But I also understand that it is hard for the agencies to pull that off."
Gruenberg told attendees Tuesday that the FDIC remains committed to hosting a community banking conference early next year. The conference will feature a study of how the industry had evolved in the past 20 years and a discussion on the future of community banking. He defined community banks as those with $1 billion or less in assets.
He also outlined plans to hold roundtable meetings with community bankers across all six FDIC regions. The agency also plans to evaluate and ways to make policies easier to understand. Finally, the FDIC plans to study how community banks raise capital, find "quality" personnel, handle regulation and approach technology.
Craig A. Meader, the chairman and CEO of the $69.3 million-asset First National Bank of Kansas in Waverly, suggested the FDIC start by encouraging better communication between Washington and the FDIC's regional directors. "I think the field directors take a lot of liberty with their field examiners," Meader said.
