May 22 - Greg Gonzales, commissioner of the Tennessee Department of Financial Institutions and immediate past chairman of the Conference of State Bank Supervisors, gave observations from his tenure as CSBS chairman during the CSBS State-Federal Supervisory Forum.
In his remarks, Gonzales spoke of the alarming consolidation that has taken place in the banking industry over the past few decades and the important role community banks play in job creation, economic growth, and market stabilization. “As a result, state regulators, through CSBS, have stepped up our efforts to advocate on behalf of the community bank model and industry diversity,” Gonzales said. “State regulators believe federal policymakers must take an accommodative approach to policy, recognizing the unique characteristics of community banks and tailoring policy, instead of implementing one-size-fits-all solutions.”
Gonzales also called on his federal counterparts to right-size supervision for banks based on their varying business models, footprints and risk profile. “I think you all stand at the crossroads of a great and historic opportunity,” Gonzales said. “Through the community bank initiatives that so many of you are engaged in, I sense hope and expectation from community bankers that federal agencies are serious about trying to tailor regulation to the community bank model. We as state regulators stand ready to work with you to help us all realize a regulatory system that values and recognizes the importance of the community bank model.”
Gonzales concluded his remarks by encouraging his peers to seek out balanced supervision. “We need pragmatic, real-world, common-sense judgment mixed with big-picture, long-term thinking. The only way for us to do that is to work together, state and federal regulators alike.”