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Bowman’s Debut

ABA’s Community Bankers Conference in San Diego

By Alaina Webster

American Bankers Association President and CEO Rob Nichols opened the first General Session of the 2019 ABA Conference for Community Bankers by outlining several key issues facing financial institutions as well as ABA’s policy goals for the coming year.

On the operations front, banks are concerned about aging core processing systems and the current dearth in the talent market. From a policy standpoint, ABA hopes to address the rate cap on brokered deposits, CECL, capital calculations and cannabis banking, Nichols told the roughly 1,200 attendees.

However, Nichols quickly ceded the stage to Michelle Bowman who, as the most recent appointee to the Board of Governors of the Federal Reserve System, was making her first official public appearance. In prepared remarks, Bowman told the crowd, “Community banks are a critical engine of the economy.”

She further detailed that diversity in the size of banks across the country is important, pointing out that community banks are responsible for 53 percent of small business loans. She praised the assembled bankers, noting there were no community bank failures in 2018, and confirmed that the Fed is paying attention to banking and credit trends throughout the industry.

More than anything, though, Bowman encouraged bankers to comment on policies whenever the Fed reaches out. “I understand how clear communication can help us do our jobs better,” she said.

As examples, she offered that the Fed is currently collecting comments on the community bank capital rule, raising the appraisal threshold and BETR, the Bank Exams Tailored to Risk program. According to Bowman, the Fed is particularly focused on banks in the $500 million range, those with limited staff and no dedicated compliance officer.

Nichols then joined Bowman on the stage, and the two took seats for a euphemistically named “fireside chat.” Nichols led Bowman through a series of questions, beginning with her views on the current economy, which she summed up as “great job numbers, solid wage growth.”

“I’m comfortable with the current stance for our policy,” Bowman said of the FOMC and the Federal Reserve. (Photos by Alaina Webster)

Regarding the Community Reinvestment Act, Bowman acknowledged that the lack of clarity and transparency in the exam process is a problem, and that her fellow governor, Lael Brainard, is heading up CRA reform efforts for the board. Bowman maintained that the “CRA has a very important reason to exist,” telling the audience that the Fed has so far received 1,500 comments on CRA proposals.

Nichols then moved on to the implementation of
S. 2155 and asset thresholds, which he termed “arbitrary.” Bowman responded that she believes implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act is moving quickly, considering the changes it contains, but she hedged a bit when it came to addressing capital/asset thresholds. Bowman conceded that the Fed is open to considering revisions. When Nichols asked if an 8 percent threshold could be better for community banks than a 9 percent threshold, she paused before responding that the comment period was still open, drawing laughter from the assembly.

Nichols then moved on to the implementation of
S. 2155 and asset thresholds, which he termed “arbitrary.” Bowman responded that she believes implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act is moving quickly, considering the changes it contains, but she hedged a bit when it came to addressing capital/asset thresholds. Bowman conceded that the Fed is open to considering revisions. When Nichols asked if an 8 percent threshold could be better for community banks than a 9 percent threshold, she paused before responding that the comment period was still open, drawing laughter from the assembly.

During the remainder of the opening General Session and Tuesday’s General Sessions, Kat Cole, chief operating officer and president, North America of FOCUS Brands Inc.; Mike Robbins, author and teamwork and emotional intelligence expert; and retired Col. Arthur Athens, USMCR spoke to bankers about leadership qualities and strategies that may help them improve operations and culture in their institutions.

Retired Col. Arthur Athens quoted country singer Tim McGraw, reminding bank leaders to be humble and kind.

Cole advocated for constant innovation on a regular basis, not only when competition forces one’s hand. She challenged banking leaders to ask three important questions:

  1. What do we throw away? What do our customers no longer value?
  2. When do we have to say no? What’s being asked for that we don’t offer?
  3. What is one thing you would change? Ask customers of multiple generations what one thing they would change within the organization.

She also reminded bank leaders to listen to their employees. “The people who are closest to the action know what needs to be done long before the leader does,” she said. But, she cautioned, they often lack the language and authority to implement their ideas.

On Tuesday, Robbins reminded the audience that mindset, authenticity and appreciation are key assets to any leader’s toolkit. He championed honesty without self-righteousness, vulnerability, and separating appreciation from recognition, urging bankers to appreciate their employees even when they make mistakes.

“Appreciation is recognizing people’s value,” he said.

Finally, Col. Athens reminded bank leaders to remain involved on all organizational levels. “Never be too big to do the small things that need to be done,” he told the audience.

Two Innovation Showcases held during the conference gave various financial services solutions providers the opportunity to address bankers in quick, five-minute slots. On Monday afternoon, these vendors included: Sheltered Harbor, represented by Trey Maust, CEO of Sheltered Harbor and executive vice chairman, Lewis & Clark Bank, Oregon City, Ore., who also acted as emcee during the one-hour session; Lending Front, represented by Jorge Sun; Invictus Group, represented by George Callas and Thomas Rideout; Pannos Marketing, represented by Jim Pannos; Promontory Fulfillment Services; ServiceFirst, represented by Tom Broadman; and Strunk LLC, represented by Dan Broderick. Solutions offered ranged from data breach back-up to digital lending to M&A to vendor and risk management.

The conference was held at the Hilton San Diego Bayfront from Feb. 10-13.

Alaina Webster, Managing Editor, awebster@banknews.com

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