Independent Banker - January 2022 - 43

institution (CDFI) in Bronx, N.Y.,
will continue its mission to fund
microloans to new small businesses
in New York City's low-income
neighborhoods, says president and
CEO Carlos P. Naudon.
Planning for increased
compliance costs
With legislators contemplating a number of new
regulatory requirements, community bankers are
particularly engaged this year.
" PPP loans at least gave them a
lifeline, so, post-pandemic, we're
trying to reach out to the surviving
entities and help strengthen them so
they can continue to grow, " Naudon
says. " There has to be a follow-up to
PPP loans to small businesses, and
we view that as one of our missions.
Because if we don't strengthen our
small businesses, we can't strengthen
our communities. "
Holding onto talent
Another top challenge for community
banks in 2022 is attracting and
retaining qualified staff. Nearly half
(48.1%) of respondents listed it as one
of their primary business challenges.
" It's particularly difficult today in
the environment that we have, where
a person being hired has so many
choices, including staying home with
their kids while working remotely, "
Naudon says. " I think many people
today are making a lot more shortterm
decisions to satisfy them over
the next few months, versus having a
long-term commitment and more of
a mission.
" We are very much a missiondriven
organization, so our challenge
is to find the talent that is a match,
and that's very tough to do now. "
Badger Bank is having trouble
finding staff " across the board, " from
operations to tellers and trust officers.
" We don't even get applications, "
Dehnert says. " It's a struggle. "
In 2022, existing staff-Dehnert
included-will continue to wear
multiple hats until labor market
conditions ease.
While Red River Bank also finds
A quarter (24.5%) say complying with regulations will be one of
their top challenges in 2022, and more than half (51.4%) anticipate
compliance spending will increase by at least 5%.
Carlos P. Naudon, president and CEO of Bronx, N.Y.-based Ponce
Bank, is concerned about efforts to force banks to monitor activity
within bank accounts on behalf of the IRS. This would further alienate
people within the CDFI's " disenfranchised underserved community. "
" This is particularly true with immigrants, as many come from
areas of the world where they built up a well-founded distrust in
government, " Naudon says. " So, to now have an additional layer of
reporting activities by the government would be detrimental to all of
our efforts to further increase banking in these communities. "
Janet Silveria, president and CEO of Community Bank of Santa Maria
in Santa Maria, Calif., finds talk of raising capital thresholds concerning.
She believes it is premature due to the pandemic's lingering effects on
the asset side of community banks' balance sheets.
" The regulatory agencies were great during the pandemic and
temporarily lowered the leverage ratio, but now those ratios are
coming back up, " she says. " But my contention with the agencies is
that our risk factors have not increased. They are the same level of risk
that we had pre-pandemic. "
Credit quality is strong, community banks are not posting many
charge-offs and loan loss reserves are significant, Silveria says. None of
that has changed, but banks' asset growth due to increased deposits
has. Hopefully in 2022, loan demand will start to rebalance that.
" Regulatory agencies, please give us a little bit more time, " she says.
" Cut the community banks some slack, as we're not the ones putting
the financial sector at risk. "
Do you anticipate spending more or less
money on compliance in 2022?
51.4% 43.5% 0.9% 4.2%
STAY
INCREASE
by at least 5%
ROUGHLY
THE SAME
DECREASE
by at least 5%
NOT SURE
YET
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