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Bankers want a reduction in financial regulations
Bankers want a reduction in financial regulations
Robert Powell, III// February 28, 2017//
Like with many U.S. industries, the fate of the banking industry appears to lie in the hands of the Trump administration.
The president campaigned on promises to roll back federal regulations, including many of those found in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
“We’re really anxious for regulatory reform,” says Steven Yeakel, president and CEO of the Virginia Association of Community Banks.
Many Virginia bankers say that, in trying to correct problems that led to the 2008 financial crisis, Congress created regulations that are burdensome to small banks. Community bank officials say they are paying for mistakes they didn’t commit.
This perspective carries weight in the commonwealth because, outside of McLean-based Capital One Financial Corp. — one of the nation’s biggest banks — Virginia-based banks are relatively small.
Susan Still, the president and CEO of HomeTown Bank, the largest bank based in the Roanoke Valley, says it has five senior-level employees whose time is devoted to nothing but dealing with regulations. “They do no business with customers,” she says. The bank has just over $500 million in assets.
The prospects for regulatory relief appear to have spurred a renewed interest in creating new banks. The Wall Street Journal reported in early February that eight groups had filed applications with the Federal Deposit Insurance Corp. to open banks. That number, the newspaper reported, represents the highest number of proposed banks since the financial crisis. Eight new banks, however, still is a paltry number compared with the hundreds opened annually in the early years of this century.
Meanwhile, one persistent trend, bank mergers, will continue this year.
Last year, TowneBank completed its merger with Monarch Financial Holdings to create a bank with the most deposits in Hampton Roads. Bank of Hampton Roads and Xenith Bank also combined their operations in 2016, creating a Richmond-based bank under the Xenith name. In addition, Charlotte, N.C.-based Park Sterling expanded in Virginia by acquiring Glen Allen-based First Capital Bank.
Looking ahead, United Bankshares, which has dual headquarters in Charleston, W.Va., and Washington, D.C., has announced plans to acquire Tysons Corner-based Cardinal Financial Corp. in a deal expected to be completed by mid-2017. Likewise, Reston-based Access National Bank plans to merge with Middleburg Bank during this year’s second quarter.
