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BizVoice/Indiana Chamber – September/October 2017
Thwack.
That’s the sound of a packet of home mortgage
closing documents landing on a table in front of
consumers.
And it is one cause of the regulatory headache
going on in the financial industry, according to
Horizon Bank President and CEO Craig Dwight. The
breadth of paperwork involved in mortgages now
compared to 25 years ago, he contends, is
staggering.
“We had a household that took a mortgage loan from our bank
and they had a doctorate degree and commented, ‘How can anyone
read all this?’ ” he recalls.
“We haven’t made it any simpler.”
“Simple” and “reasonable” are two of the primary qualities
banking and investment experts are calling for to describe federal
regulations going forward.
BizVoice
®
spoke to three Hoosier authorities on banking and
investments – Horizon Bank’s Dwight,
Chase Bank President J. Albert Smith, and
Lakeside Wealth Management CEO Mark
Chamberlain – for their views about the
effect of the regulatory environment on
their industries.
“We think sensible regulations are
essential to have a viable economy and
viable financial system, so we are continually
reviewing the regulations to be sure they
enable us to serve our customers well,
don’t place an undue burden on our
customers and be sure that they have the
proper access to credit,” Smith offers.
Banking: Seeking a level
playing field
Horizon Bank holds $3.2 million in
assets and has been operating for 144
years in northwest and central Indiana and
southern Michigan. The company recently
launched its first branch in Columbus,
Ohio, bringing its total number of offices to
61 in three states.
Dwight points to the bank’s “people first” mission as a reason for
the steady growth and success over the years. And right off the bat he
highlights another advantage: Horizon Bank’s numerous mergers and
acquisitions because of a strict regulatory environment.
Smaller banks just can’t keep up.
“We’ve completed 11 mergers in the last 10 years or so. One of
the drivers is the regulatory burden that’s been placed on the smaller
institutions that do not have the ability to hire the talent and stay
abreast of the regulations,” he acknowledges.
“I recall a conversation with one CEO of a bank we were looking
at buying. He was in his early 50s, it was a good bank, but he was
spending 90% of his time on regulatory oversight. Ten years ago, he
was spending 90% of his time with his customers. He no longer
enjoyed the job,” Dwight continues.
“I don’t think (regulations) are necessarily bad, but they have
added to the cost of doing business and the smaller banks can’t afford
that. We have 25 to 30 people on (compliance).”
Chase Bank has 5,100 branches and serves close to half of
American households. Its parent company, JPMorgan Chase & Co.,
has $2.6 trillion in assets. Smith highlights the implications of placing
the same regulations on large and small banks.
“It’s an unfair playing field. There’s no logical reason that the
First National Bank of whatever small community should be regulated
Financial Leaders Seek Simplicity, Reasonable Regulations
‘UNINTENDED
CONSEQUENCES’
By Charlee Beasor
Special Section: Banking/Finance/Investments
An “unfair playing field” places similar regulations on big banks, such as Chase, and smaller
community operations.