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Basel III Is Interested in Community Bankers, Too

Theodore Iacobuzio |

Community bankers are generally mild-mannered types, and your agent didn’t spot a pitchfork or a torch, not one, in Orlando at the recent American Bankers Association Community Bankers Conference. But there was a whiff of revolt in the air as those bankers contemplated new levels of regulatory scrutiny. Like Basel III.

The ABA did a terrific job in scheduling sessions to educate bankers in what these global standards will demand of them in the coming months. And the bankers in those sessions were pretty forthright in voicing their dismay at some of the provisions of the new capital requirements.

And indeed, most of the scrutiny Basel III has undergone relates to its provisions for “too-big-to-fail” banks. The bankers in Orlando last month were quite aware that the regulations were applicable to them as well. They just wanted to know why.

Privately, an Iowa banker told your agent, “Regulating a $100 million bank like it was a New York money center is nuts.”

Recently, MasterCard Advisors published work indicating that Basel III could prompt innovative product design in the form of non-revolving lines of credit, shorter terms on those lines and further enhancements to the debit card business. All true.

But some of the bankers in Orlando wanted to know why the regulator is making it harder for them to enter, re-enter, or continue in the credit card business, which has neither gone away nor exploded, but morphed into something it wasn’t pre-crisis—something that has everything to do with what community banks do best: help ordinary people manage their money.

Topics: Payments Strategy

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