I was a little disappointed in the article published by the blog BankThink over at American Banker. The post’s author, Robert H Smith descended into a trite simplification which was ugly and patronizing.


Over recent years all banks have become subject to public loathing, increasing regulation, and required to maintain more capital some in the form of systemic capital as required of the larger banks by Dodd Frank and Basel III. All banks and their bosses are the targets of the Occupy Everything groups, accused of destroying the values and opportunities of the bottom 99% of America while many banking executives receive incomes some consider larger than life.

Unfortunately the community banks of this country are thrown under the bus by just being a bank. They have been unable to disassociate themselves from extra costs and lost credibility resulting from the scared reputation of the bigger banks. Today the community banks are subject to the same increased regulatory burden, increasing capital and general public disdain as the larger bank.

Does the public at large need better information on who or what instituion brought the economy tumbling three years ago? Sure. But banking as a whole suffers when it dismisses the concerns of millions of Americans who are supposed to be the customer base they serve.

Smith further claims that the Basel III and Dodd-Frank rules are, by pure fact of their existence, abhorrent to a banker. The wrath of his pen ought to be sent to the regulatory system that members of Congress decided to was arcane and no longer relevant in the 1980’s and 1990’s. That is not to say that Congress specifically caused the crisis. We’re all to blame in some fashion. But even community banks are not monastical instiuions. They want to make money, and ought to. The difference is where those dollars go. In community and small banks, the returns to the Bank in the form of bonuses to the employees or even payroll are funded back into the community that it works in. This circular nature of capital movmenent is in theory the reason why community banking is so much better than large regional chains. The guy who just sold you a mortgage is also the guy who buys goods or services from you in the same community.

Recognizing that citizens and customers have just complaints about the state of the market doesn’t make them enemies, it makes them Americans.