A good regulator has to show a sense of humor under pressure.

Thad Woodard, the president and chief executive of the North Carolina Bankers Association, confronted a panel of regulators about the lack of de novo activity during a conference in Greensboro hosted by the association Tuesday.

Suggesting that regulators were at fault, Woodard complained that the banking industry would suffer if it continues to contract. "We'll probably lose 10 to 12 banks in North Carolina this year, and we're not birthing any new children here," he said.

There was an awkward pause among the five panelists, who had just withstood a lengthy session on the controversial qualified mortgage rules. Then Ray Grace, the acting banking commissioner in North Carolina, reached for the microphone.

"I'd like to remind Thad that it is the job of the regulators to bum [out] the bankers … and not the other way around," Grace deadpanned, evoking laughter among attendees that helped break the obvious tension in the room.

A few of the regulators sitting next to Grace's cracked a smile at the remark, too.

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