Pub. 1 2012 Issue 5

12 l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s Regulatory Summit 2012 W ith banking regulation piling on rigorous thresholds since 2009, and the exami- nation environment strained, it’s no wonder that Kansas bankers are looking for hints as to what they should expect next. KBA held a Regulatory Summit in Overland Park on May 30th and Wichita on May 31st. Invitations were extended to James LaPierre, Regional Director, FDIC; Kurt Raney, Associate Deputy Comptroller, OCC; Kevin Moore, Senior Vice President, Federal Reserve Bank; and Ed Splichal, State Bank Commissioner, to participate in presentation and roundtable style discus- sions on the topic. This prestigious panel accepted the invitation and spent two days with Kansas bankers dissecting regulatory supervision based on charter types and legislative interpretation. Summit Facilitator, Larry Martin of Bank Strategies, LLC, Denver, Colorado, led an overview of the Regulatory Feedback Initiative, started by a group of state associations. The survey is taken from banks fol- lowing an examination as a formalized mechanism to gather banker feedback following the recent legislative initiatives. It is hard data that is collected in a way to ensure it is objective and non-censored comment. An example that was evident in the feedback initiative was that criticism was given by examiners without providing guidance or recommendation for best practices. Other common comments included concern that one size doesn’t fit all in the regulatory process and that the methodology for enforcement keeps changing. While this report did not include any statistics from Kansas banks, Chuck Stones, KBA President, stated that Kansas banks would soon be able to participate in this work. Regulators receive the material in a statistical format and use it internally to improve the examination process. Summit attendees were given an opportunity to hold small group discussions and construct questions for the regulators to answer from their own perspective. The participants were given an option to have the questions read by the facilitators if they were uncomfortable asking in an open forum. The group was given a copy of the “Texas Ratio” report by Jim Swanson, Bank Strategies, LLC, Denver, Colorado. This report contained information that indicated the strength of a bank as well as measures that may indicate the risk of failure. Each of the invited panelists welcomed the questions constructed in the morning portion of the summit and gave answers from the perspective of their own agency policy or practice. All four of them gave opinions that they see markets and examination results improving. Fed Reserve Key Issues • Issues surrounding capital planning – questions surrounding how an organization may respond to hypothetical situations • Stress testing – not required of banks lower than 10B but a good idea for everyone • Ag Lending – monitoring closely – bubble?– monitoring decision process • Risk Management – Credit Risk, cash flow analysis, understanding credit concentration risk, grading accuracy, call report and investment portfolio • Consumer compliance regulation – mortgage lending in community banks, Reg Z, ability to pay, public documents OCC • Quality process to identify top risks • Commercial credit – especially construction loan problems • Allowance for loan and lease? • Asset liability management • Compliance management Wichita attendees listen intently to the presentation of the Regulatory Feedback Initiative. The panel takes questions from bankers. Left to right: James LaPierre, Regional Director, FDIC; Ed Splichal, State Bank Commissioner; Kevin Moore, Senior Vice President, Federal Reserve Bank; and Kurt Raney, Associate Deputy Comptroller, OCC.