2019 Journal of Community Bank Case Studies

2019 COMMUNITY BANK CASE STUDY COMPETITION

consumer. There are several timing issues that could be changed, this could be with cures, appraisal delivery, and other things, to help the consumer. If a consumer is well informed throughout the loan process and they’ve received all of their information, then they should be able to close timely (Dunkley). The bank sees this as a reasonable change particularly because they educate the customers. “There are a lot of things that consumers want that can even further delay the closing process. This means they can’t close or they could lose the home. There are a lot of different situations where a consumer request would actually help the consumer, but we’re very limited moving forward because of the regulations” (Dunkley). The State of Utah has two credit unions that are significantly bigger than People’s Intermountain Bank. Mountain America Credit Union has $8 billion in assets and America First Credit Union sits at $10 billion. Additionally, there are three other credit unions that are similar in size to People’s Intermountain Bank (Credit Unions). Credit unions are not subject to income tax. This unleveled playing field seems unfair to many in the community banking industry. Large credit unions are a primary source of competition for People’s Intermountain Bank. Interest rates on deposits are likely to be higher at credit unions and lower for borrowers. For example, there has been a major shift in automobile lending towards credit unions. This in turn places a burden on community banks to either match credit unions’ interest rates,

Large credit unions are a primary source of competition for People’s Intermountain Bank.

to look at that and say well let’s shorten the term of the loan so that we’re not having to hold additional capital” (Olsen). People’s Intermountain Bank is well-capitalized and intentionally carries excess capital to cover for a potential downturn. CECL will hurt both the bank’s capital and its customers (Williams). “We’d like for regulators and accountants to reconsider the decision increase the overall reserves. It will create greater volatility in earnings, and it is procyclical with respect to when you’re setting aside the reserves. You’re going to be setting them aside at the exact opposite time of when you want to. We think it is going to be negative overall” (Olsen). Another change that could be utilized at People’s Intermountain Bank would be the ability to fund mortgages in a more convenient way for the customer. The bank feels many consumer protection regulations often result in unnecessary delays for customers. Dunkley stated, “There are several things that we’re required to do that delay closings for the

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