Pub. 8 2013-2014 Issue 1

www.nebankers.org 8 Extraordinary Service for Extraordinary Members. an important part of our definition of success. As community bankers, we have a special connectedness with our customers, communities, and state–as well as a responsibility to protect the integrity of community banking. At this time, we are at a critical juncture in ensuring that our state and our country have a strong economic future. One of the keys to that future is a healthy, vibrant community banking sector. Although community banks were not to blame for the recent crises and lack of ethics, the resulting legislation and ensuing regulations are unfortunately impacting us all today. Steps are now needed to reduce the regulatory burden on our community banks. Banks across the state and the country are feeling a strong pull on resources as theDodd-FrankAct is implemented. Bank- ers facemore than 9,000 pages of newor expanded regulations as a result of the bill. Implementation of this 2,000-plus page legislation will take several years to complete and will involve a process that is several multiples greater than the statute itself. Managing the tsunami of regulation is a significant challenge for any bank, but it’s overwhelming for community banks, which have a median size of only 39 employees. In fact, the cost of regulatory compliance as a share of operating expenses is two and half times greater for small banks than for large banks. The weight of the new rules creates pressure to hire additional com- pliance staff insteadof customer service staff, and ismoving our banking culture from“customer-centric” to “regulatory-centric.” This reduces resources that could be directly applied to serving a bank’s customers and community. It means fewer loans get made, slower job growth, and a weaker economy. In addition, Basel III proposes the changing of capital re- quirements for all banks. If passed, it will add extreme volatil- ity to equity capital and, as a result, restrict lending and other banking activities. Basel III should be reformed so capital rules enhance not inhibit the role of community banks. Furthermore, newmortgage rules are imposing such high costs that many community banks are likely to scale back their mortgage operations; these new rules may even force my bank and others like it out of mortgage lending altogether. We need simpler mortgage rules that both encourage banks to make loans and protect our consumers. I live in Gering, a community of 8,500 people, and I know small-business owners can relate. According to a recent National Federation of Independent Business poll, small business owners’ top concerns include poor sales, taxes, and government regulation or red tape. Banks and businesses understand that more regulation doesn’t necessarily make consumers safer, banks stronger, or the economy healthier. In fact, more regulation–if it’s not smart regulation–has the opposite effect, chilling growth and driving up prices. Nebraskans are practical, salt-of-the-Earth people, and they get this. Better regulation, not more regulation, leads to growth and improved service. There’s nodoubt that our federal laws are currently chock-full of outdated, confusing, and counterproduc- tive rules.Wemust reverse the trendof over-regulation–inboth banking and business–and free the private sector to do what it does best. Today’s approach to regulation should ensure that consumers andour environment areprotected, without bogging downbusinesses in red tape or chilling expansionwith threats of additional rules andharshpenalties. Solutions shouldbeenabled by the government, not funded by the government. Great leaders know when to lead, when to follow, and when to get out of the way. Our government leaders would do well to take this advice. America is full of smart bankers, bright businessmen and women, and energetic entrepreneurs. We are all eager to in- novate and grow, market and hire–if government would just do the right thing and get out of the way. Z • Banking & Finance • Municipal Law • Bankruptcy • Employment Law • Business & Commercial Law • Sanitary & Improvement Districts 2120 South 72nd Street, Suite 1200, Omaha, NE 68124 (P) 402.391.6777 (F) 402.390.9221 www.crokerlaw.com Croker,Huck,Kasher,DeWitt, Anderson & Gonderinger,L.L.C. AT T O R N E Y S AT L AW Providing quality legal services to businesses and individuals in such areas as: • Real Estate • Estate Planning • Probate • Taxation • Litigation • Tax Foreclosure Q Chairman’s Message — continued Reach John Stinner by email at jstinner@valleybankne.com . Stinner was elected chairman of the Nebraska Bankers Association during the NBA Annual Convention, held May 1-3 in La Vista, Neb.