I watched with interest as Wells Fargo CEO John Stumpf went to Congress to face the Senate Banking Committee following the massive account fraud perpetrated by the company’s employees. As an advocate for community banking, I want to urge everyone to recognize the stark differences between community banks and mega-banks.
I have been hearing from many community bankers who are furious that any financial institution would betray the trust of customers by opening accounts without their knowledge. Community banks are built on a model of trust and long-term relationships. To community banks, reputation is everything. As one community banker emailed me this week, “we don’t do business like that, we care about our customers, if they don’t do well, we don’t do well”.
It is a certainty that lawmakers will consider a legislative response to Wells Fargo’s massive consumer fraud. Community bankers are rightfully concerned that the legislative fallout and regulatory reaction to this latest case of fraud will fail to make a distinction between too-big-to-manage banks and community banks. This will, again cause new costly, unnecessary requirements which will continue to impede community banks’ ability to serve their customers and further drive consolidation. Corporate greed and toxic culture of Wall Street always leaves its stain on Main Street. And those who seem to most condemn the big banks inadvertently become their champions by threatening the survival of the community banking industry.
Community Banks will continue to call for targeted regulatory relief to promote fair competition and consumer choice in financial services. I urge members of Congress to let reason prevail. Stop punishing the nation’s community banks for the failings of the mega-banks. The time for real regulatory reform is well past due.
Cam Fine, CEO of the Independent Community Bankers of America, recently wrote “Fix what’s wrong with American financial services by strengthening what’s right with it—community banks.” I could not agree more!
Hannah Merritt, Marketing & Public Relations
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