ST. LOUIS — Small banks are showing renewed interest in consumer lending, but they have been admittedly slow in embracing new technology that could help them reach even more borrowers.

Some bankers are also worried that regulators — concerned about smaller institutions' exposure to commercial real estate — could impose new rules that might force them to scale back their lending.

Those were the key findings in an annual survey of community bankers that was released Thursday at a conference co-hosted by the Federal Reserve and the Conference of State Bank Supervisors. The survey, distributed in April, polled 557 bankers, most representing institutions with assets of $100 million to $1 billion.

Mortgage lending is becoming more popular product for community banks, with three-fourths of survey participants saying they offer fixed-rate products and 60% offering adjustable-rate loans. Nearly 75% of respondents are making home equity loans. Those percentages were all lower in last year's survey.

Among other consumer categories, 90% of respondents said their banks' are offering auto loans and nearly half had credit card products.

Despite their efforts, though, community banks are struggling to increase market share and in some cases may even be losing ground, bankers said

Online lenders are poaching consumers and business customers, and competition is intense for auto loans, Richard Sanborn, president and chief executive of the $515 million-asset Seacoast Commerce Bank in San Diego said during a panel discussion at the conference. Seacoast focuses exclusively on real estate lending tied to the Small Business Administration.

"The space is getting smaller as to what community banks can do," Sanborn said.

Bankers surveyed are worried that small institutions are moving to slowly in adopting new technologies. While 81% of the banks surveyed provide mobile banking services, only a third offer online loan applications, for example.

"The stalled level of online lending activity may reflect technological constraints," the report said. The results suggest "that community bankers do not necessarily see technology as an ever more encompassing solution to operational problems."

Darrin Williams, the CEO of the $1.2 billion-asset Southern Bancorp in Arkadelphia, Ark., said during the panel discussion that small banks need to think "beyond mobile."

"Fintech disruptors are very good at using distribution channels so we need to partner with that or do it ourselves," he said.

The cost of regulation remains a concern for community bankers, as new research showed that compliance accounts for more than 40% of accounting and consulting expenses, about a fifth of all data-processing and legal costs and 11% of personnel expense. Nearly two-thirds of bankers flagged new mortgage disclosure regulations as particularly burdensome, arguing that so-called know-before-you-owe rules are significantly delaying closings.

Research unveiled at the conference estimated that the aggregated compliance cost across all banks with less than $10 billion in assets is $4.6 billion annually. Still, the banker survey observed that the relative costs of compliance "were stable" compared with a year earlier.

A bigger issue is the threat of the intended — and unintended — consequences of future regulatory changes. They worry, for example, that regulators might impose new capital requirements or stricter underwriting guidelines in an effort to reduce small banks' CRE exposure.

"Regulatory uncertainty … can wreck your business model," Sanborn said. "It can paralyze you. That is difficult for community banks in any environment."

"As community bankers, we're going to find a way to serve our customers," Williams added. "But compliance costs permeate the institution."

That message resonated with a number of the state banking commissioners in attendance.

"The survey helps us understand how certain new regulations, or their applications, have slowed growth in mortgage lending and made other business segments less attractive," said Charles Cooper, the banking commissioner in Texas and chairman of the Conference of State Bank Supervisors.

"These findings … underscore the need for careful consideration of unintended consequences and the application of rightsized regulation," Cooper added.

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