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WASHINGTON Federal bank regulators said Tuesday that they are taking steps to ease the regulatory burden on community banks by eliminating or revising certain call report line items.
September 8 -
Federal regulators are working to streamline call reports for community banks in response to industry complaints that some of the requirements are unnecessary and increasingly burdensome.
May 29 -
Community banks are hoping regulators' recent decision to drop certain items from call reports is just the beginning of supervisory efforts to streamline the forms to reduce their burden.
September 18
As someone relatively new to Washington, I still believe that common sense can prevail in this town. My faith in our nation's decision makers was reinforced by the news that
The reforms to the quarterly call report announced last week by the Federal Financial Institutions Examination Council follow intense advocacy by the Independent Community Bankers of America and the nation's community bankers.
The first round of the FFIEC's proposal would simplify community bank call reports by deleting certain data items and revising reporting thresholds. More important than these initial steps, however, is the council's vow to evaluate the creation of a streamlined quarterly call report for community banks and to continue its dialogue with the industry.
So far, that discourse has proven fruitful. The regulators' announcement comes almost a year to the day after ICBA leadership met with the FFIEC on the excessive call report burden. At the meeting, we delivered a petition with nearly 15,000 signatures representing almost 2,500 community banks urging relief.
As a former career community banker, I know firsthand that the need for call report reform is very real. A
"This process has gotten completely out of hand, and the only way to make meaningful change is to reduce the burden substantially to a very basic set of reports that correspond exactly to the core system categorizations that banks use to actually manage their bank from a business perspective. It has been proven time and again that all of these burdensome reporting requirements have added nothing meaningful to the industry, and have done nothing to prevent any financial crisis."
Regulators should be commended for recognizing the problem and considering solutions to streamline the call report to reduce an unnecessary burden. Our proposal would allow highly rated, well-capitalized community banks to file a short-form version of the report in the first and third quarters of the year, while filing the full report at mid-year and year-end.
This would provide sufficient safety and soundness monitoring information for regulators while significantly reducing the burden on local banks and freeing up valuable resources for local communities. According to ICBA's survey, 98% of respondents said a short-form call report would reduce their regulatory burden, and 72% said the reduction would be substantial.
A shorter, less burdensome and more sensible call report is not a cure-all for the excessive regulatory burdens plaguing community banks. But it is an important step in addressing overregulation and helping local economies prosper. ICBA and community bankers nationwide look forward to continuing the discussion with banking regulators, and to implementing real solutions to strengthen community banks and the local economies they serve.
Working together, common sense may just prevail after all.
Terry J. Jorde is senior executive vice president and chief of staff at the Independent Community Bankers of America.