WASHINGTON–It isn’t just credit unions laboring under the weight of the compliance burden. The Independent Community Bankers of America (ICBA) said nearly a quarter of their member banks’ income goes toward regulatory costs.
Following a speech during which FDIC Chairman Martin Gruenberg stated his support for community banks, Camden Fine, the CEO of the ICBA said, “ICBA also shares Chairman Gruenberg’s concern with the lack of de novo formation, consolidation in the banking industry and the cost of regulatory compliance on community banks—issues that are closely related.
“As the Federal Reserve and Conference of State Bank Supervisors recently reported in a new survey, community bank compliance costs have increased by nearly $1 billion in the past two years to $5.4 billion, or 24% of community bank net income,” Fine continued. “Of the survey respondents who said they considered an acquisition offer in the past year, virtually all (96.7%) said regulatory costs were a very important, important or moderately important reason—showing a direct impact of regulatory burden on community bank consolidation.”