2019 Journal of Community Bank Case Studies

Utah Valley University

THIRD PLACE:

In the last two years, its loan to deposit ratio increased nearly 10%. This increase places People’s Intermountain Bank above the average of peer group four. Mark Olson, chief financial officer, emphasized the bank’s need for more deposits, which would drop its loan to deposit ratio to a more prudent percentage (Olson). Part II: Regulatory Compliance/ Burden Assessment The two regulations that were brought to attention by People’s Intermountain Bank as being the most burdensome prior to the passage of EGRRCPA were various consumer protection acts and the exam cycle. Even though the consumer protection acts were not necessarily burdensome for the bank itself, the bank feels these regulatory requirements made it difficult to effectively serve customers. Ryan Jones, chief lending officer, expressed, “The most frustration we’ve felt is in some of the consumer protection laws. We feel like those have maybe gone too far, to the point that they are actually hurting consumers by limiting their choices and commoditizing things. Relief there could help” (Jones). Amy Dunkley, AVP and mortgage manager, shared a similar sentiment voicing, “There are things that are so heavily regulated that even if the consumer understands and even if they wanted to close, they aren’t allowed to. There are a lot of things that are intended to protect the consumer that also hurt the consumer. Especially at People’s Intermountain Bank we want to help the consumer. We want to provide a place that is safe, fair, and honest, and we

feel that we do provide that. However, some of the consumer protection laws add this extra layer that could actually hurt the consumer” (Dunkley). The burden associated with the consumer protection acts fall much heavier on the consumers than the bank. The increased regulation in this area requires a greater understanding from mortgage officers and managers, but People’s Intermountain Bank did not recognize any regulatory fees or excessive costs relating to these laws. Wages and benefits were the only costs associated with compliance of consumer protection acts (Messina). Prior to the passing of EGRRCPA, the 12-month exam cycle was the greatest regulatory burden. Williams also noted that the exam process “takes your eye off of the ball for a couple of months” (Williams). The greatest cost that the bank pays for the exam cycle is time. Bank management takes their effort away from serving the community to prepare for

Wages and benefits were the only costs associated with compliance of consumer protection acts (Messina).

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