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New FDIC director will examine community banks’ compliance costs

The Federal Deposit Insurance Corp. will start reviewing its risk management and supervision processes for smaller banks to potentially ease their compliance burdens.

Sandra Thompson, the FDIC’s director of risk management supervision, said that Martin Gruenberg, the agency’s new acting director, will keep a close eye on the smaller banks that are struggling to adapt to new regulations being implemented in the wake of the financial crisis, HousingWire.com reports.

A nationwide conference has been scheduled for early 2012 by the agency in order to examine the future of community banks. The agency’s staff has already begun researching the development of small banks and their business model changes in order to address concerns regarding their ability to raise capital in addition to keeping up with technology and hiring employees.

"It's going to be a priority in the coming year,” Thompson said on Tuesday at the Walters Kluwer CRA & Fair Lending colloquium in Baltimore, according to HousingWire.com. “We do want to see this segment regain its standing as a major player in economic growth and job creation. Supervisors have to take a holistic view."

Smaller banks have been consistent with their complaints that they can no longer afford to participate in the lending business, especially for mortgages, because of the Dodd-Frank Act’s burdensome regulations.

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