Letter to the Editor: Prosperity Part of Community Bank Mission

The below letter was printed in the 8/16/13 Villager Newspaper and submitted by David Conrad, President & CEO of The Citizens National Bank, an independent small bank located in NE Connecticut.  His message about the value of small local banks to community is important and his requests of our U.S. Senators and U.S. Representatives  is a solution, something we often have a hard time communicating. Let’s provide a solution to a problem by sending our wishes to lawmakers: Print out the letter, pen a short message about why you agree with Dave, and mail it to Senator Blumenthal, Senator Murphy, and Congressman Courtney. Demand a reply to your message and provide your name and mailing address. If you need addresses for the lawmakers, let us know.

Letter to the Editor:  Prosperity Part of Community Bank Mission, by David Conrad, President and CEO, The Citizens National Bank, Putnam, CT

As a community banker, prosperity is not only a part of my everyday vocabulary—it’s also part of my everyday mission. My job as a banker might seem rather straightforward—take in deposits and make loans—but I’m here to tell you there is a primary responsibility that makes being a community banker just that—a community banker.  I call this place home, and just like you, I want our community of Northeast Connecticut to thrive and prosper.

That’s why I am out there every day helping local families and residents finance a place to call home, plan for retirement, open up or expand a small business, and create economic vitality and jobs—all to make our local economy stronger. 

But there’s something out there on the horizon that is threatening this town’s economic prosperity.  The growing wave of onerous new banking regulations that Congress created to address Wall Street’s misdeeds is landing with much greater impact on our nation’s nearly 7,000 community banks. That’s right; we’re feeling the effects of Washington’s runaway regulatory burden here in Northeast Connecticut, even though we are miles from Washington.

Because of our time-tested business model, one based on customer relationships rather than transaction volumes, community banks aren’t a threat to the entire financial system. In fact, community banks are the source of almost 60 percent of all small-business loans of less than $1 million, as well as mortgage and consumer loans tailored to the needs of our local communities. Yet community banks such as The Citizens National Bank are being forced to pay a penalty in regulatory costs—to comply with an ever-growing plethora of rules and regulations. Everyone can agree to reasonable, smart regulations.  But today, Washington lawmakers and regulators are holding back community banks from devoting our full attention and resources to making more loans and fueling a more robust and prosperous local economy in the communities we serve. 

The effect of these regulations is that Congress has added insult to injury for community banks and consumers, while rewarding the real villains. The megabanks’ implicit government guarantee provides what Bloomberg View has calculated is an $83 billion annual taxpayer subsidy—a major driver of the largest banks’ profits.

As a local community banker who is particularly concerned about the economic prosperity of this great community and our local consumers, I’m urging lawmakers to address the regulatory burden that increasingly is harming local community banks. Here are five steps Congress can take now to rebalance the regulatory burden and give local businesses right here in Northeast Connecticut greater access to loans:

• Exempt small banks from unnecessary and burdensome mortgage regulations to support the housing recovery.

• Cut red tape in small-business lending by waiving new reporting requirements.

• Require cost-benefit analyses by regulators to ensure quantitative justification of new regulations.

• Waive certain audit rules to reduce expenses without creating more risk for investors, taxpayers or the deposit-insurance system.

• Eliminate redundant requirements that financial institutions mail annual privacy notices even when they haven’t changed their policies.

None of these changes would alter the already significant regulatory tools that provide appropriate oversight of community banks. But it would be a failure of logic and lawmaking if the new wave of banking regulations that were meant to stop Wall Street excesses instead resulted in cutting off one of Main Street’s economic lifelines. I hope lawmakers will listen to the calls of community bankers across this great nation so that we all can continue to hold economic prosperity first and foremost in our vocabulary and our mission.

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