Earlier this month, I attended and also spoke at the American Banker Association’s National Conference for Community Bankers. One of the education sessions dealt with the new banking “business model” and how the regulatory changes were affecting community banking.
The moderator asked the audience to respond with a show of hands on several questions. One question was “Is the new regulatory environment potentially eliminating some of the product offerings of your community bank?” About 75% of the hands went up for a “yes” answer. As a follow-up question, the moderator asked, “What type of products are you looking at eliminating?” The largest response: First Mortgage home loans. The general discussion that followed was the compliance and time costs far outweigh the potential benefit of offering home mortgages to their markets.
This “straw poll” lends credence to the facts in Dale’s article published earlier. With many smaller community institutions potentially eliminating First Mortgages as a product offering, it would leave large institutions and credit unions to fill any void.