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Higher capital levels vs stricter regulations - Greenspan article

Higher capital levels vs stricter regulations - Greenspan article
Jul 15, 2025 4:18:18 PM
Same song, different verse.  We have two drastically different business models for banking in the United States, Community Banking and Big Banking. With each generation of regulators, and regulatory thought, they seem to always forget this fact.  So, they create a regulatory narrative that should only apply to the Big Banking group, and try to cram it down the throats of Community Bankers.  This is a fight that I have seen repeat itself over and over again in my almost 40 years of being a community banker.  So, what do we do about it?  We keep fighting the good fight.  We keep reminding anyone that will listen, and especially those that wont listen, that there is a difference between us and them and that we (community bankers) aren't going away and we will continue to fight aggressively for our community banking industry because we believe we are the backbone of small business in the United States, and we play a very vital and important role in the economic health of this country.  Community Bankers cannot ever become complacent.  Support your state community banking trade associations as well as the ICBA. They work hard for our livelihood.   As Solomon said "There is nothing new under the sun."

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Andrew Trainor
Regional President & CEO
Legacy Bank
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Original Message:
Sent: 10-25-2018 12:39
From: Jolene Muscha
Subject: Higher capital levels vs stricter regulations - Greenspan article

When I read these articles, I am always surprised at the "one size fits all" attitude.  I examined banks as an FDIC examiner for eight years before I began my career as a banker and our approach was always risk based.  To institute a broad based rule of 25 percent capital minimum is to penalize the well run community banks and restrict their operations.  I know from experience that most community banks have loan portfolios full of long standing customers with good payment histories and loans secured by real estate valued conservatively.  Small banks have the luxury of knowing all their customers on a first name basis and we use that firsthand knowledge to recognize loan issues early and reserve for them appropriately.  So in economic downturns, we hold a higher capital account through the ALLL.  Main street community banks did not contribute to the 2008 recession; however, we did suffer from the fallout of the Dodd Frank act.  My hope is that the decisions makers take into consideration that not all banks are alike and "one size does not fit all". 

 

Jolene A Muscha

President

Bank of Glen Ullin

Glen Ullin, ND 58631

701-348-3613

 

Glen Ullin banklogo

 

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