2019 Journal of Community Bank Case Studies

Juniata College

FIRST PLACE:

who or what should be protected and then determine the legislation off of that, rather than trying to fix many different problems at once, or at least impact many different areas at once. This more tailored approach would recognize that a bank with $1 billion in assets is a very different beast from one with $10 billion, yet current legislation does not recognize this important distinction. Those at the upper end of this scale are more complex organizations, engaging in a wide range of activities and “provide a variety of services to their customers, but often rely on hard financial information, computer models, and centralized decision- making as the basis for conducting business” (Kahn). In contrast, those on the Kish end of the scale engage in less complex transactions and are focused on relationship banking. Therefore, Kish believes that further tailoring of legislation and a more common-sense approach would be very advantageous for all parties involved—it would be better for community banks in general and could lead to lower operating costs, which in turn then lowers costs for consumers—a true win-win situation. Nonetheless, Kish do not see additional legislative change coming on stream anytime soon, given where we are in the election cycle and the change of control within the House, which is seen as less amenable to the banking community in general. Though legislative changes are seen as unlikely, there are still possibilities with respect to rule making for EGRRCPA. As detailed earlier, most important to Kish, and other community banks, is that pertaining to the CBLR. The banking industry is actively seeking the lower

Smaller community banks, such as Kish, struggle to compete with larger banks because of the laws and regulations in place.

8% threshold for the CBLR, which the ICBA estimates could allow 600 more banks to opt for this ratio (Witkowski), including Kish. Impact on Community Smaller community banks, such as Kish, struggle to compete with larger banks because of the laws and regulations in place. These laws and regulations currently affect the small to medium sized banks to a greater extent: their cost of entry into certain markets are prohibitive and they cannot achieve the cost spread that larger banks can. Thus, the ability to ‘fine-tune’ legislation could have a number of impacts, not just for Kish, but for its customers. Mr. Bill Hayes suggests that a more tailored approach to regulation could “unleash the economic engine” in which banks play a vital role and facilitate Kish’s ability to serve its communities, assist small businesses reach their full potential and increase home ownership. Essentially, if legislative changes result in either Kish holding less capital or reducing its

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