July 14 - The Independent Community Bankers of America has released the results of a new survey that shows the increasing and unnecessary regulatory burden that quarterly reporting requirements impose on community banks. In addition to highlighting the rising number of community bank resources devoted to the quarterly call report—resources that would otherwise be used for economic and job growth—virtually all respondents said streamlined reporting rules for these smaller and less complex institutions would reduce their regulatory burden.
“This survey shows that as the call report has grown from 18 pages in 1986 to 29 pages in 2003 to nearly 80 pages of detailed financial reporting requirements today, the regulatory burden on community banks has skyrocketed along with it,” ICBA Senior Executive Vice President and Chief of Staff Terry J. Jorde said. “Main Street community banks do not have large compliance teams to keep up with increasing government red tape, which means resources they devote to these reporting requirements cannot be used to promote local economies. ICBA’s survey clearly demonstrates the need for a shorter and simpler call report for smaller, less complex institutions.”
According to the 2014 ICBA Community Bank Call Report Burden Survey, the annual cost of preparing the call report has increased for 86 percent of respondents over the past 10 years. The total hours dedicated to preparing the call report has increased for 73 percent in that time. Further, one in three said the number of employees involved in call report preparation has increased, with more than 60 percent saying they have at least two employees who prepare their report.
To mitigate these rising regulatory burdens, ICBA is proposing that highly rated, well-capitalized community banks be allowed to file a short-form call report covering the first and third quarters and a long-form call report for the second and fourth quarters each year. This streamlined report would provide sufficient information for regulators to monitor safety and soundness while being significantly less burdensome to prepare, allowing community banks to focus more resources on their customers and communities. According to the ICBA call report survey released today, 98 percent of respondents said the short-form call report would reduce their regulatory burden, and 72 percent said the reduction would be substantial.
Despite having less complicated operations and activities compared with larger banking institutions, community banks are required to file long-form call reports with their regulators every quarter, representing an average of just 65 business days between reports. The call report instructions alone are 630 pages, with an additional 57 pages of instruction under consideration by regulators. In fact, the quarterly call report has more pages than the typical American community bank has employees.
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 www.icba.org.