BOULDER — Bankers are eager to learn the details of regulatory and tax reforms promised by the Trump Administration, because without them, they aren’t sure how to plan for the changes they may bring.
For the past seven years, banks have been navigating change after change as the government rolls out regulations and requirements in bits and pieces through the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in 2010.
Many who participated in BizWest’s Banking Roundtable Tuesday, are looking forward to some relief from what they call burdensome and costly regulations. While strengthening the overall industry and taming the home foreclosure rate, they believe the regulations went too far and are so cumbersome and costly it prevents community banks from their core mission: serve the financial needs of people and businesses.
Gerry Agnes, chief executive of Boulder-based Elevations Credit Union, said Dodd-Frank was designed to rein in banks that were “too big to fail. … “well, the big just got bigger,” he said.
Agnes said the Consumer Financial Protection Bureau, a government agency, is “ flawed. … It’s a regulatory apparatus that is unaccountable … it basically has run amok.”
In addition to pending regulatory and tax reform, bankers have a list of things that constantly consume them. Talk at the roundtable covered myriad topics, from how to balance brick-and-mortar branches with online services, the ongoing trend of mergers and acquisitions as big banks snap up small ones, the outlook for commercial and industrial lending and the rise of nonbanks loaning money to small businesses.
With regulations dictating who banks can lend too, crowdsourcing and financial technology companies have emerged as alternatives.
Fintech companies, as they are called, use new technology and innovation with available resources in order to compete in the marketplace of traditional financial institutions and intermediaries in the delivery of financial services. But right now, they are loosely regulated.
“Fintechs don’t have the same requirements as banks to determine if a client has the ability to repay a loan, said Tom Chesney, president, commercial banking division, AMG National Trust Bank in Boulder. “At the front end, they are appealing, but we (bankers) are schooled to look for pitfalls, without that they are being set up to fail.”
Keith Michalkewicz, vice president and business banking manager, Wells Fargo, said, “It’s not hard for entrepreneurs to find capital by other means than banks.” Dana Bondy, senior vice president, commercial banking, BBVA Compass, pointed out that banks working with the Small Business Association have attractive loans products to offer through the SBA’s 504 and 7(a) loan programs.
Mergers and acquisitions
Kelso Kelly, regional president, ANB Bank, expects the trend of mergers and acquisitions among banks will continue. “The use of information technology will drive it,” he said.
Eric Long, president, First Western Trust, said the “best performing banks will acquire smaller ones, combining to save money.”
Chesney pointed out that banks with aging board members, coupled with the burden of compliance are “just exhausted” and are ready to cash out.
Branches vs. online banking
Whether to close branches and rely more on attracting new customers with online services accessed through a smart phone is still an unanswered question.
“We’re still trying to figure out the purchasing behaviors of the younger generation,” Michalkewicz said. “Their values are still being formed. We haven’t seen enough. … but people still want to do business with people.”
While millennials love their tech gadgets, they still want to talk to a person when a problem arises, Agnes said. He said one of Elevations’ busiest branches in on the CU campus. “They still need help on complex problems. … Phone, click or walk-in, we need all three.”
“The style of a branch bank looks different now,” said Gretchen Wahl, senior vice president/commercial banking manager, First National Denver. “Banks are downsizing their footprint.”
Banks, like Capital One and its cafe model, are trending toward having fewer tellers and more relationship managers.
Aaron Spear, vice president, commercial banking, Community Banks of Colorado, said its necessary for a community bank to “be on the ground” to serve its customers.
Gerry Agnes, CEO, Elevations Credit Union; Dana Bondy, senior vice president, commercial banking, BBVA Compass; Thomas Chesney, president, commercial banking division, AMG National Trust Bank; Susan Graf, vice president and regional development manager, New Resource Bank; Kelso Kelly, regional president, ANB Bank; Brad Lesch, senior vice president, manager of business banking, First Citizens Bank; Eric Long, president, First Western Trust, Boulder; Keith Michalkewicz, vice president and business banking manager, Wells Fargo; Kirk Monroe, executive vice president, Vectra Bank Colorado; Susan Moratelli, vice president/ commercial relationship manager, Flatirons Bank; Aaron Spear, vice president, commercial banking, Community Banks of Colorado; Gretchen Wahl, senior vice president/commercial banking manager, First National Denver. Moderator: Jeff Nuttall, co-publisher, BizWest Media. Sponsors: George Berg, Becky Rigo of Berg, Hill, Greenleaf & Ruscitti; Jim Cowgill and Jeremy Wilson of EKS&H.