ABA Banking Journal - February 2012 - (Page 26)
Cover story | community banking report
Stop drowning us
ABA Community Bankers Council Chairman Bill Grant says compliance even has “tweener” banks like his struggling to rise above the flood
by Steve cocheo, executive editor
understanding a widespread frustration Grant, chairman, president, and CEO, holds the unusual distinction among community bank CEOs of having been his bank’s first compliance officer.
26 | ABA BANKING JOURNAL | february 2012
all Photos: david hathcox
very winter, Maryland banker Bill Grant joins other hardy souls at nearby Deep Creek Lake and, stripping to his bathing suit, jumps in. This manic act, done for charity, isn’t an endurance contest. “You plunge in, turn blue, and get out,” says Grant, 58. But it does provide an interesting contrast with his banking life. Grant and his fellow plungers have the sense, when they find themselves up to their chins in ice-cold water, to move. However, when Grant, chairman of ABA’s Community Bankers Council, finds himself and his bank up to the neck in compliance duties, he and fellow bankers can’t just “get out.” They have to sit there, steeping, hoping they won’t drown. The environs of Oakland, Md., headquarters of Grant’s First United Bank & Trust, have another Washington connection dealing with water. The northern branch of the Potomac River—the same river that flows through the nation’s capital—starts nearby. So, Oakland, in the extreme western corner of Maryland, sends Washington a steady flow of pristine mountain spring water from its rural environs, via the river. Washington returns the favor by sending back an increasing flow of toxic regulation and compliance duties. Some deal.
Grant didn’t begin in Compliance. A lawyer by training, his first love—which continues—is with trust and estate work. He and First United’s chief financial officer, Carissa Rodeheaver, came up through Trust. As a trust officer, he was given the compliance job because of his law degree. He says of the added work, “It didn’t take me but an hour a week.” But increasingly, compliance has been taking a toll on his bank’s business, beginning long before the Dodd-Frank Act came on the scene. Costs come two ways: expenses and lost opportunities. Grant says $1.4 billion-assets First United spends an estimated $3 million a year on compliance costs, and that’s not even counting an estimate of Dodd-Frank’s eventual impact. As an example of the second issue, lost business, he points to the bank’s decision a few years back to stop making mobile-home loans. Under amendments to the Home Owner-
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