Fed Gov. Duke addresses concerns of community banks

Elizabeth Duke

Federal Reserve Governor Elizabeth Duke recently addressed the concerns of community bankers regarding the implementation of Basel III capital rules, saying that regulators intend to delay the effective date of the proposals.

“We heard many different concerns during our outreach efforts, but there were some recurring themes…” Duke said. “It’s still far too early in the process to know where we and the other agencies are going to come out on these and other issues or when final rules may be released. But what I can promise you is that before we issue final capital rules, we will do everything possible to address the concerns that have been expressed…”

Community bankers have voiced concerns regarding the compliance burden associated with a heightened regulatory environment. Duke said that while community banks were not responsible for the recent financial crisis, and while she advocates against a one-size-fits-all approach to mortgage regulation, regulators “cannot, on their own, craft a new approach to regulating mortgage lending by community banks.”

Duke also said that the FDIC has received more than 2,000 comment letters from industry participants on capital proposals.

“We take these comments very seriously, and we will be working with our colleagues at the [Office of the Comptroller of the Currency] and FDIC to understand and analyze the many issues that have been raised,” Duke said.