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The
recently proposed capital rules have resulted in numerous inquiries from our
membership. We are obviously concerned, and will be meeting with senior
level regulators to discuss these complex rules and the potential impact on
community banking. Further, we will have a comment letter finalized in
sufficient time for you to review our thoughts prior to the September 7
deadline for comments.
Our
primary concerns at this juncture include: the complexity, expense and
burden of compliance appears to be "overkill" for a relatively basic
community banking business model; treatment of TRUPS appears to be in conflict
with a hard-fought victory in Dodd-Frank; Tier 1 capital treatment of market
valuation in the AFS portfolio is problematic; and new risk allocations,
especially in mortgage and other real estate categories, could increase the
cost of credit to consumers and small business borrowers.
Each
of the federal regulators have programs planned to discuss these proposals, and
you should have been notified of the applicable event/teleconference.
IBAT
will remain vigilant as this process moves forward, and will, as always, be
focused on how these new capital proposals will impact you as a community bank.