Pub. 9 2019 Issue 1

12 www.azbankers.org Relief for Community Banks in the Competition for Deposits: An important reform of the rules governing reciprocal deposits will make it easier for community banks to compete for the business of large depositors. By Chuck McBrayer, Regional Director at Promontory Interfinancial Network, LLC T HE RECENT BANK REFORM BILL MADE A LOT OF NEWS, BUT WHAT MAY SURPRISE YOU IS THE SPECIFIC PROVISION OF THE ECONOMIC GROWTH, REGULATORY RELIEF, AND CONSUMER PROTECTION ACT THAT COMMUNITY BANKERS BELIEVE WILL HAVE THE BIGGEST IMPACT ON THEIR DAILY BUSINESS. Before the bill became law, a lot of attention was placed on the provision raising the systemically important financial institutions, or SIFI, threshold from $50 billion to $250 billion in assets, above which banks must contend with a heavier compliance burden. Yet, the provision involving SIFIs directly impacts only a small number of commercial banks based in the United States—the doz- en-plus with between $50 billion and $250 billion in assets. Perhaps that’s why when Promontory Interfinancial Network queried bankers for its second-quarter Executive Business Outlook Survey, executives from the 390 banks that responded pointed else- where when asked to identify the law’s most impactful provision. Thirty-seven percent of respondents said the law’s provision that al- lows most reciprocal deposits to be treated as nonbrokered deposits ranked highest on a scale of one to five, placing it first among the seven other provisions tested. It was up against stiff competition. The other provisions included those that eased the qualified mortgage rule, extended the regula- tory exam cycle and simplified capital rules for community banks, among others.