Independent Banker - January 2019 - 35

could be reported semi-annually and not every
quarter include information concerning troubled
debt restructurings and fi duciary assets, as well
as the risk-weighting of various types of assets
under Basel III.
When it passed the regulatory relief law,
Congress intended for the banking agencies
to establish a new short-form call report that
would signifi cantly reduce the reporting burden
for community banks for the fi rst and
third quarters of each year. Unfortunately, the
agencies are proposing to merely reduce a few
items on the existing 051 Call Report or eliminate
those items that generally do not apply to
most community banks. ICBA is disappointed
that regulators would use the law to continue
eliminating the reporting fi elds that community
banks rarely use anyway.
" Congress and the president have recognized
the reporting burden associated with the
call report and identifi ed the solution to bring
community banks the relief they so desperately
need, " ICBA president and CEO Rebeca Romero
Rainey said upon release of the proposal. " It is
now incumbent upon the regulators to enact
comprehensive and meaningful reporting relief,
as policymakers intended. "
To strengthen their proposal, ICBA is calling
on the agencies to limit short-form reporting to
the balance sheet, income statement and statement
of changes in shareholders' equity without
any other supporting schedules. If we truly want
to free up community bank resources to serve
customers and promote economic growth in local
communities, this is the way to do it.
Political capital
While the call report plan promises insignifi -
cant regulatory relief, the FDIC's proposal to
exempt community banks from risk-based capital
requirements will needlessly leave out many
institutions.
S.2155 requires the banking agencies to
develop a community bank leverage ratio of
between 8 and 10 percent. Banks with less than
$10 billion in assets that meet the leverage ratio
will be considered well capitalized and exempt
from all risk-based capital requirements, including
the Basel III capital rules. This is another
longtime ICBA priority.
Quick stat
15,000+
Messages
community
bankers sent
to Congress
supporting
the passage of
S.2155
However, the agency's proposed community
bank leverage ratio of 9 percent would unnecessarily
leave out more than 600 community banks
that would be eligible if it were set at 8 percent.
Once again, the agencies are being exceedingly
stingy as they implement important parts of the
relief law.
ICBA is advocating an 8 percent threshold.
That would be more than the 5 percent leverage
ratio requirement currently required of all
well-capitalized banks and signifi cantly higher
than this year's requirement of 7 percent common
equity over total risk-based assets, which
includes the capital buff er.
" ICBA and the nation's community banks have
long called for meaningful relief from the overly
complex Basel III capital standards, " Romero
Rainey said in response. " Federal regulators
should use the opportunity Congress provided
with the passage of S.2155 to complete this
objective. "
Community banks did not cause the fi nancial
crisis of 2008-2009. Their simplifi ed balance
sheets, conservative lending and common-sense
underwriting shield their regulatory capital
from the kinds of losses incurred by the largest
and riskiest fi nancial institutions. An 8 percent
threshold is more than suitable.
How to help
Community bankers can use ICBA's
Be Heard grassroots action center
to call on regulators to provide more
meaningful relief. With draft comment
letters that community bankers can
customize to reflect their personal
experiences, we can
work together to
hold the regulators'
feet to the fire and
maximize the benefit
of these policies to
community banks
and Main Street
communities
nationwide.
icba.org/beheard
independentbanker.org Q 35
http://www.icba.org/beheard http://www.independentbanker.org
Independent Banker - January 2019

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