The new credit loss standards may seem like one more hurdle to clear. But played correctly, they’ll help smaller banks gain new efficiencies.
Thrift institutions once regulated by the OTS are struggling with reserve allocations under the OCC.
In the most recent round of examinations, regulators are focusing on asset quality, particularly in the area of commercial real estate.
Rather than decrying increased regulation, bankers can embrace the new reality and turn their compliance operation into a competitive advantage.
With its enforcement of regulations governing ‘unfair, deceptive and abusive acts and practices,’ the Consumer Financial Protection Bureau raises the compliance bar for new product design and marketing.
Banks today are understandably worried about compliance issues but throwing too many resources at this non-productive activity is not the answer.
Although little noticed in the media, recent regulatory rules on remittances transfers will impose significant new costs on financial institutions.
While compliance burdens on community banks cannot yet be considered overly burdensome, these institutions need to prepare now for rising costs in the future.