Regulation

Compliance is a top growing expense, the regulatory bar has increased, banks needs better talent management and cybersecurity is everyone's problem.

Guidance released by regulators meant to clarify the impact of the Volcker Rule on small institutions was quickly rejected by banks.

Although Ocwen Financial agreed to pay more than $2 billion to settle allegations it mishandled foreclosures and mortgages for thousands of borrowers, it could have been even worse for the country's largest nonbank servicer.

In the space of just a few hours, regulators issued -- and banks condemned -- guidance meant to clarify the impact of the Volcker Rule on small institutions.

A hike in guarantee fees could encourage banks to retain loans they might have otherwise sold to Fannie or Freddie, but observers are skeptical that it will accomplish its true mission of jump-starting the market for private-label mortgage securitizations.

Regulators raised more concerns on Thursday that some institutions might take heightened risk by seeking profits from locking into longer-term fixed yields and diving into complicated growth markets such as oil, gas and leveraged lending.

A bipartisan group of lawmakers is urging regulators to reconsider a provision in the recently finalized Volcker rule that they warn could harm community banks that own trust-preferred securities.

Many small banks are well managed and provide value to their customers and investors. The more profound question for the economy is what effect the little guys have on the stability and efficiency of the U.S. financial system.

In her final column for American Banker, Editor-at-Large Barbara Rehm says there is no denying the system is safer than it was in 2007, and while further changes may be needed, it makes sense to "take a breather."

Barbara A. Rehm, the former editor-in-chief turned columnist for American Banker, is leaving the paper to join Promontory Financial Group.