WAUSAU, Wis. (WSAU) -- Community bankers from around Wisconsin met in Wausau with the Chairman of the Federal Deposit Insurance Corporation and Congressman Sean Duffy Monday.
Chairman Martin Gruenberg heard the concerns of several officials from smaller, community banks, and how federal policies and regulations are affecting their ability to compete and to be more efficient.
Gruenberg says overall, banks are in very good shape to lend money right now but the demand is not there yet. “I think our banks are well positioned to lend. Their capital and liquidity today is really quite strong. I think the key issue is getting a pick up in credit demand, because the banks are positioned to meet increasing credit demand.”
The Chairman says many of the banking regulations came as the result of past problems, such as “too big to fail” banks going under and problems from the recession and the housing bubble. Gruenberg says they’re not perfect regulations. “I don’t pretend the regulation is perfect. We try to do the best we can. We try to strike a balance between letting institutions do what they do and meet the credit needs of their communities, but to be sure it’s done in a safe and sound way. I think that’s our basic responsibility.”
Congressman Duffy says the government has to be careful not to over-regulate community banks. “I want to make sure we get back to a space where we don’t have too many rules and regulations that prohibit those dollars, that capital from flowing to our main streets across Wisconsin. Again, it’s natural where if the pendulum was too far on one side before the crisis, it’s swung more to the other side, and that’s a little bit more conservative.”
River Valley Bank in Wausau hosted the meeting. President and CEO Todd Nagel says keeping up with regulations has been more challenging in recent years. “We’ve been battling that for quite a while. I’d say one of our fastest growing departments in the bank has been our regulatory and compliance department. That’s certainly not what you want in a bank. You want your lending department to be growing faster.”
Nagel says banks right now are ready to lend, but the demand is just not there. He says with the modest 2% growth, there hasn’t been much activity out there. “We are not seeing a lot of loan demand, and we’re in a pretty large geographic market from Eagle River, Wisconsin to Madison, Wisconsin, so from an economic standpoint, growth has been very slow. We do have money to lend, but when there’s no demand, it’s hard to create the demand.”
Nagel also says many businesses have been holding on to their cash reserves after recovering from the problems of the last several years. Nagel says this is the right time for any business that is considering expansion or equipment purchases since the rates are so low and the money is available.
Both Nagel and Gruenberg also commented on the banking business in general, saying it is difficult to attract and keep talented young people to the business of banking, which is something they are trying to address.