These days, when someone mentions Wheel of Fortune, it’s usually in reference to the long-running syndicated TV game show where contestants battle to solve word puzzles for fabulous prizes, all while trying not to go bankrupt. However, a quick trip down memory lane to your high school Latin class — or an unexpected side trip to Wikipedia as you search for recent photos of Vanna White — could lead you to remember that the Wheel of Fortune (Rota Fortunae) belongs to the goddess Fortuna. And what does the goddess do with her wheel? She spins it, of course. And the good are sometimes crushed while others reap unforeseen benefits.
Fortune may not be quite so arbitrary for those in the banking business, but community bankers have always been subject to unseen forces beyond their control. Take interest rates for example. Then, while dealing with rate spreads, there’s an economic downturn. Then, as the economy strengthens, new regulations descend like the Furies.
Just like on TV, it may sometimes seem like the ultimate goal is not to go bankrupt.
But the news isn’t all bad. Community bankers who have spoken out against burdensome regulations through their state and national industry associations seem to be making progress as they work to throw a lash on Fortune’s wheel.
Community bankers have said all along that they didn’t cause the financial crisis and that new regulations have a disproportionate impact on small institutions. It seems those truths may finally be having an impact at the federal agencies up on Mount Olympus.
Not long ago, the Federal Reserve began to study community banks’ role in the economy and the mortgage market. The initial results prompted Fed Governor Elizabeth Duke to call for a separate set of mortgage rules for smaller institutions. During a recent Congressional hearing, Fed Chairman Ben Bernanke called for a broad review of the regulations impacting community banks. The Federal Deposit Insurance Corp. has also been taking a closer look at community bank issues, while the Consumer Financial Protection Bureau is considering important community bank amendments to its ability-to-repay rule.
There’s certainly a lot going. Now more than ever, succeeding in the game means participating in the discussion, and keeping up on the latest trends in regulation, examination and enforcement.
Next week, Dodd Frank Update will bring you news from the front lines of the regulatory debate as we head to Las Vegas for the Independent Community Bankers of America Annual Convention and Techworld, March 11-15. Watch doddfrankupdate.com for live coverage from the event.
And if you’re heading to the show, drop me an email at [email protected] and we’ll set up a meeting, or get together for a little roulette.
Bona fortuna!