Bankers are waiting for the hype around regulatory reform to settle down so they can see what changes — if any — will actually happen.
That much was clear in Orlando, Fla., where community bankers have assembled for an annual conference hosted by the American Bankers Association. For many attendees, there is little hope for a full-blown overhaul, despite an executive order from President Trump requiring the Treasury Department to evaluate reforms.
Still, bankers are hopeful that some incremental improvements will take place.
“Right now it is talk,” said Andy Schornack, president and CEO of the $195 million-asset Flagship Bank Minnesota in Wayzata. “At what point will any of these things start to move one way or another?”
“This has always been a regulated business and it will continue to be a regulated business,” added Frank Sorrentino, president and CEO of ConnectOne Bancorp in Englewood Cliffs, N.J.
“There are certainly some parts" of the Dodd-Frank Act "that could use some massaging, possibly some certain areas of repealing,” added Sorrentino, who is also his company’s chairman. “It’s not about a total repeal of the legislation. … It’s really about smart regulation tailored for bank size and risk.
Sorrentino said he would like to see the new administration “take away some of the arbitrary nature” of bank regulation, such as asset thresholds for systemically important financial institutions and caps on interchange fees.
“It is very realistic to expect some of the lines in the sand will be erased,” Sorrentino said. “When you really think about it today is a $50 billion bank really a threat to the U.S. economy? I don’t think so.”
While he isn’t hopeful of rollbacks, Schornack said it is possible that the Trump administration could put a stop to some regulations that have yet to be introduced. “There’s potential for it given … what people are talking about. I could see that happening faster than I could see them changing something or rolling back something that’s already been created.”
That view was shared by Chester Szablak, chief sales and marketing officer at the $2.5 billion-asset Enterprise Bank in Lowell, Mass. Banks should prepare for the status quo and be pleasantly surprised by any change, he said.
“I think you continue to do things as you’re required to do them, and you do them to the best of your ability,” Szablak said. “You just you have your eyes wide open as to what the possibilities may be down the line.”