Letter: Not just Wall Street
The current regulatory reform bill proceeding through Congress has been largely billed as a reform of the transgressions of Wall Street. In the President’s radio address this past Saturday he stated, "We’re still digging out of an economic crisis that happened largely because there wasn’t strong enough oversight on Wall Street."
While that statement is true, make no mistake about it, the current legislation will also have profound negative effects on community banks. As a community banker who takes great pride in where I live, I am greatly concerned that "the toughest financial reforms since the Great Depression" (Saturday’s radio address) will have a materially adverse impact on all community banks and their ability to support their communities.
There is not a banker I know who doesn’t agree with the fact that some sort of financial reform is needed, but the "Wall Street reforms currently making their way through Congress" (Saturday’s radio address) are not strictly Wall Street reforms. They will make community banks an unintended casualty.
I guess you could say that we are getting caught in the turbulent wake left by many of the larger investment banks (mostly now failed) and the non-bank mortgage sector. It is my hope that when we look back on this monumental legislation (if it passes) that community banks are not the unintended road kill on the highway to financial reform. Please let Congress know!
Jeffrey M. Szyperski
President and CEO, Chesapeake Bank