Pub. 2 2012-2013 Issue 3

6 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S A Word From CBA... Basel III Is the Battlefield for Community Banks Please get involved to protect your bank, your personal interests, your customers, and your community. Community banking is threatened and Basel III is the battlefield that will determine its future. If the battle is lost, we will see fewer community banks, less lending to certain customers, and damage to our communities. If it is won, then community banks can continue to serve their customers well, while still dealing with an avalanche of Federal regulation. The forces in this battle include regulators on one side promoting the Basel III proposals, and an alliance of in- terests opposed to them: banks, bank officers and owners, customers, community groups, and public officials. The bank interests are concerned about the impacts on the banks and customers and community. The others are focused on damaging economic impact across the Board. Banks’ concerns focus on the amount of capital required, the definitions of that capital, the risk-weighting of assets where regulators determine broad assessments of loan risk, and the bank’s profitability, ability to serve customers, and for some even the survival of the bank. What’s at stake is lending to customers in the short run and the viability of community banking in the long run. Banks will see ponderous regulation with unrivaled com- plexity and ever higher capital requirements, and they will see a real world impact on their ability to lend and their profitability. The viability of the bank directly impacts your career and probably your investment in the bank. You have a lot at stake – since implementation of the current proposals will damage profitability and cause industry consolida- tion. Customers will be damaged by the inability to obtain various kinds of loans and perhaps a dearth of lending in certain industries. When lending is reduced, jobs are not created or even are lost and the entire community suffers as a result. Comment letters to the Fed, FDIC, and OCC are needed to stop the proposals. Those letters need to explain specifically the proposal’s bad impact on your bank. Federal officials like our Members of Congress can be helpful too. Already a CBA letter signed by the entire Colorado Congressional delegation voices major concern about Basel III. More Con- gressional pressure increases the likelihood of regulators being responsive. This is not the only battle in this war but it is a key one. If we are not able to prevail on Basel III then there is little chance that community banks can be successful in dealing with many other regulations from Dodd-Frank that are headed our way like QM and QRM. Please get involved to protect your bank, your personal interests, your customers, and your community.  Don Childears CBA President/CEO visit us online! www.coloradobankers.org www.coloradobankers.org