Pub. 9 2014-2015 Issue 1

www.nebankers.org 28 Extraordinary Service for Extraordinary Members. Time for Regulatory Transparency C HECKS AND BALANCES ARE IM- PORTANT. Without thempower becomes concentrated and abused. Banks are perhaps the most heavily regulated businesses in America. Bank regulators have enor- mous power. Perhaps that is because there are few, if any, checks and balances on their power. As an advocate for the banking industry, the Nebraska Bankers As- sociation has been troubled by what we’ve seen in our regulatory system. Regulators hold all the cards, from the smallest operational details to the very survival of a bank. Banks are sworn to secrecy and, as such, each bank is on an island, relatively powerless to fight back. Most banks have determined that fighting with their regulator is futile and foolish. But there are times when a fight, and the balance it would provide, is needed—not only for the banks, but also for the communities they serve and the economy in general. To that end, the Coalition of State Bankers Associations, of which the NBA is a member, has created a tool that will hopefully lead to some balance and ac- countability. We call it the “Regulatory Feedback Initiative.” This tool consists of a confidential electronic platform where bankers can anonymously provide details on their most recent examination or visitation. The information is aggregated and ana- lyzed on a national level so we can begin to identify discrepancies in how bank regulations are being enforced. These discrepancies could exist between differ- ent bank agencies, geographic regions, or examiners within the same agency. The timing of this initiative couldn’t be better considering the avalanche of new regulations that will be enforced for the first time in the coming months. Additionally, our member banks will be able to request a report from the Nebraska Bankers Association that summarizes the feedback of similarly situated banks to help them prepare for upcoming exams. The goal is to avoid surprises and, if they occur, identify inconsistencies. Finally, we will be armed with a statistically significant amount of hard data as we promote a better environ- ment for our members. This data will be used to make our case with the regula- tors as well asmembers of Congress and the administration. Everyone will have enough information to know whether a member bank is receiving unfair treat- ment or appropriate and consistent regulatory scrutiny. The survey is powered by Allegiance Inc., an independent third party with a reputation and track record of collect- ing anonymous and protected feedback from bank customers and employees. This will allow banks to shed their iso- lation without violating confidentiality or exposing themselves competitively. Since its launch, the RFI has collect- ed exam information from more than 2,000 banks. We are asking all banks that have not already completed a sur- vey for their last Safety and Soundness exam and their last Compliance exam to do so, regardless of when your last exam occurred. You will find a link to request the survey at www.allbankers. org/request.php. This is the only way to access the confidential and anonymous survey. We are asking each member bank to incorporate the survey into your examination process after each future examination. The Coalition of Bankers Associations has met with representa- tives of the FDIC, OCC, Federal Reserve, and CSBS, and to their credit, they seem to welcome the input. They know their job is getting more difficult and their processes are not perfect. We believe that a little transparency will provide some subtle checks and bal- ances in an otherwise one-sided regula- tory process. Even a slight shift in this balance could yield significant returns for our local economies and our mem- ber banks as we emerge from the recent economic crisis and assimilate the new regulatory challenges in Dodd-Frank. 