NEW ORLEANS — Rebeca Romero Rainey has been living her dream as chairman and chief executive of Centinel Bank in Taos, N.M.
Romero Rainey, who was 22 when she took the reins at Centinel, hopes her story will inspire others to become bankers. In her view, working at a small bank — Centinel has assets of $210 million — is a great way for young people to gain a broad range of experience while also serving their communities.
To recruit millennials and underrepresented groups, community bankers need to get better at telling their stories, Romero Rainey said.
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Millennials frequent independent coffee shops and farmers markets, so it stands to reason they'll see the appeal in community banks. Meanwhile, smaller lenders can court young people by appealing to their entrepreneurial spirit.
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Rebeca Romero Rainey, the CEO of Centinel Bank of Taos, will use part of her speech at a Federal Reserve conference on small banks this week to discuss the need for regulatory relief and her belief that community bankers have a duty to persevere under difficult circumstances.
September 22
"We need to talk about the opportunities, both within a community bank and the ability to engage outside the bank," she said. "We need to talk about the opportunity to learn a variety of skill sets and engage in a variety of different issues."
Romero Rainey hopes to share her story more often once she becomes chairman of the Independent Community Bankers of America at the end of the group's annual convention this week.
That story began in 1969, years before she was born, when her grandfather founded Centinel after he couldn't get a $500 equipment loan to start his law practice. Given the current regulatory environment and a lack of new banking charters, Romero Rainey said she doubts her grandfather would be able to open a bank today, which she finds troubling.
Romero Rainey said she hopes to draw more attention to the need for new bank charters, along with supporting efforts to recruit a new generation of bankers, during her one-year term at the ICBA.
The following is an edited transcript of a recent conversation with Romero Rainey.
What are the biggest challenges facing community banks? How can bankers overcome them?
Romero Rainey: Reg burden, and particularly the disproportionate impact that it has on community banks. That includes both existing regulations and the prolific growth of new regulation. We have the FASB [Financial Accounting Standards Board] proposal on current expected credit loss that would have an extraordinary impact on community banks.
Second, the continued uneven playing field we operate within. That includes competing against credit unions, their tax-exempt status and their push for new opportunities for member business lending in addition to competing with the "too big to fail" banks and the implied guarantee that goes along with them.
The third thing that comes to mind, and this is particularly troubling to me, is the lack of new charters and new growth within our industry. When you look at any living thing, any industry, any cycle, you want to see new growth and new creation.
Is there one regulation that you find the most burdensome?
If I could change anything it would be to minimize the alphabet soup we're dealing with on an everyday basis. A couple that come to mind are mortgage rules and … the growing call report burden. I would love to wave a magic wand and fix [call report filing] so it proportionally represents the amount of change that happens from quarter to quarter in an institution.
How do you envision proportional regulation looking for community banks?
That's one of the challenges for sure. Proportionate regulation involves truly understanding our business models. It starts there. It looks at the factors that change within an organization. Certainly laws exist and we want to, and will continue to, comply with those. But how do we spend the time, energy and resources to examine, to comply with regulation in areas that are proportionate to the risk we represent?
I think a perfect example is the call report burden. You can't push a button and mysteriously, magically generate a call report. There's a lot that goes into it. From quarter to quarter, it isn't that significant of a change. There's so many ways we could monitor it. We could change frequency as well as what's required on a regular basis.
As I say proportionate, for me that represents everything from creating a call report to knowing the customers I'm working with. I see our customers in the school parking lot. I run into them at the grocery store. We work together at chamber events. I'm not going to do anything to harm them or to take advantage of them.
What's on your agenda as ICBA chairman?
I will continue to make the case for reg relief. I'm also continuing with the mission of the ICBA to strengthen community banks and ensure they flourish. We need to continue to be innovative and think creativity about how we respond to challenges, like regulation, and how we education ourselves. We need to continue to provide community bankers with resources so they are best prepared for the future.
Something that is personal to me is how we continue to engage young people in this industry. I'm someone who came into this industry at a very young age and has had an amazing career in my hometown. I want to be able to tell that story so folks think about the local community bank as an amazing career option and a place where they can engage and make a difference. For me, that's a big part of it — to inspire and engage more people in this industry.
What are the opportunities for community banks this year?
As we think about the next generation of community bank customers and the studies that have come out about millennials, we're in a great environment to grow that next customer base and develop those future relationships. As we continue to be the drivers of small-business lending throughout communities, that's a huge opportunity.
We're still able to look at the unique characteristics within those small businesses to help them grow and meet the needs within that community. There are some great opportunities in technology. So much [tech] has become more affordable and realistic for us to provide. There are a lot of opportunities with service and product features as well, so maybe there are opportunities to think about how we streamline and become more efficient.
What can banks do to get more women into leadership posts?
Within banks, I think there are tremendous opportunities as we think about management succession, educating and engaging, and taking advantage of some of the networking opportunities, whether you're talking about females or younger bankers. Part of it is just how we're educating and growing this next level of leadership and providing those opportunities for folks to participate.
My story has always been about engaging. Have fun doing what you're doing and look for opportunities, whether it's in your bank in a leadership opportunity to show your abilities or within your communities to lead various activities that help get the bank out there. You can also participate or engage in state or national associations and work at committee levels. Those have all been fantastic opportunities to help advance my career.
