July 01, 2014

American Bankers Association published "Improving Relationships With Your Regulator – A Mutual Examination Guide"

2 min

Washington, DC (July 1, 2014) – On Monday, Venable and the American Bankers Association published “Improving Relationships With Your Regulator – A Mutual Examination Guide.”  The Guide written by Venable partner John E. Bowman and Tom Barnes, Director at The Cooperative Bank in Roslindale, MA, seeks to encourage mutual bank leaders to make their beliefs, decisions, and actions known to their regulatory teams and to suggest practices that will result in regulators’ better understanding of their institution.

Bowman and Barnes interviewed Mutual/Community bankers from all areas of the country for this guide.  The guide suggests practices to help community bankers improve constructive engagement with their exam teams.

According to the Guide, “Mutual banks are the quintessential community banks. Community service at every level of the bank is a hallmark of being a mutual. The inability to raise capital except through retained earnings is counter-balanced by the independence and longer-term vision that such institutions are able to take.”

During their research, the authors asked a number of CEOs if mutuality was a strategy or an
ownership choice. Their findings were mixed. Some CEOs thought mutuality is embedded in every strategic decision that is made, because raising capital from external sources is not an option. Others believed that mutuality was an ownership decision made 75 or 100 years ago that shaped their roots but not their current operations strategy.

“Regardless of the difference, all believe that factors fundamental to mutual banks should be reflected in examination conclusions. In order for that to happen, however, it is essential that regulators understand each banking institution and the unique role it plays in the community,” concluded Bowman and Barnes.

Click to view the full text of "Improving Relationships With Your Regulator – A Mutual Examination Guide."


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