Washington D.C. (October 28, 2015) Today, South Dakota community banker Roger Porch, vice president at First National Bank in Philip, S.D., testified before the Senate Banking Committee’s Subcommittee on Financial Institutions and Consumer Protection.
In testimony submitted to the subcommittee, Porch said, “excessive, unfocused regulations are changing the way we do business. Bank regulatory changes directly affect the cost of providing banking products and services to customers. Even small changes can have a big impact on bank customers by reducing credit availability, raising costs and driving consolidation in the industry.”
“During the last decade, the regulatory burden for community banks has increased dramatically, and it is no surprise that nearly 18 percent of community banks disappeared in that period. First National Bank spent $222,000 on regulatory expense, which is 19 percent of overhead. Importantly, that doesn’t include salaries. One could argue our total financial burden is 30 percent of overhead.”
As an example, Porch included information regarding the call report. “Twenty-five years ago, the call report required by the Federal Financial Institutions Examination was less than 10 pages long. Today, for our bank, it is 86 pages. Ironically, many of the pages are not applicable to us or other rural community banks.”
Porch went on to share that common-sense solutions would help community bank alleviate the burden and said the Community Lending Enhancement and Regulatory (CLEAR) Relief Act of 2015 (S. 812), introduced by Sens. Jerry Moran (R-Kan.) and Jon Tester (D-Mont.), was a place to start.
“We ask for regulation and oversight that is truly beneficial to rural consumers who rely on local banks for credit. The focus should be on enforcing existing laws rather than creating new rules and regulations that threaten banks’ future existence,” Porch said. “Rural banks can compete, but they can’t compete while burdened with red tape and unnecessary, unfocused regulations. It’s not fair to local banks and the communities that rely on them.”
First National Bank in Philip, S.D., is a $250 million bank that serves a large area of western South Dakota with customers as far west as Wyoming and south to Nebraska. First National Bank is a privately owned financial institution that has successfully served the needs of western South Dakota for more than 100 years living by the motto, “Partners in Banking.” The principal scope of business for the bank is financing of farmers and ranchers with lines of credit and real estate and machinery loans.
About the ICBSD
The Independent Community Bankers of South Dakota (ICBSD) was founded in 1983 to serve as the voice for independent community banks throughout South Dakota. ICBSD is the only association that advocates exclusively for community banks. Community banks help create local jobs, support local organizations, pay local taxes, and work to build strong communities.
Greg McCurry, President and CEO
Independent Community Bankers of South Dakota
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