"ICBA shares Chairman Hensarling's concerns with using subjective judgments such as reputational risk in the supervision of depository institutions, including community banks. While objective ratings systems such as CAMELS rely on hard data and support fair and even standards of supervision, relying on supervisors' judgments of an institution's reputation pose the threat of vague, uneven and arbitrary regulation.
"ICBA is concerned that applying subjective factors such as reputational risk in safety-and-soundness examinations will allow regulators and law enforcers to pressure financial institutions to sever relationships with legal businesses that are out of favor with some policymakers or to terminate certain types of products or services. The association is similarly concerned with excessive overreach of the
"Community bankers have always been in the best position to determine the necessary measures needed to protect their hard-earned reputations. Safety and soundness--a hallmark of community banks--should be measured in verifiable data, not subjective standards that could vary from one examiner to the next. ICBA looks forward to seeing how federal banking regulators respond to Chairman Hensarling's inquiry and to continuing to work with
For more information, visit http://www.icba.org.
The Independent Community Bankers of America®, the nation's voice for more than 6,500 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit http://www.icba.org.
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Read the full story at http://www.prweb.com/releases/2014/05/prweb11882995.htm
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