Claiming that increasingly common malady of modern business – disclosure overload – a coalition of community bankers is petitioning regulators for relief.
The Independent Community Bankers of America, a group that represents 6,500 community banks, has launched a petition drive that seeks relief from “increasingly onerous quarterly reporting requirements” as part of what it calls its “war on community bank regulatory burden.” The petition, which will ultimately be delivered to the Federal Financial Institutions Examination Council, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Federal Reserve, calls upon them to reduce current call report requirements and streamline reporting rules.
Call reports, formally known as the Consolidated Report of Condition and Income, are required by the FFIEC on the last day of each calendar quarter. The petition follows a recent survey by the group that looked at the expense of completing quarterly call reports. The annual cost of preparing these reports—with 80 pages of forms to complete and more than several hundred pages of instructions—has steadily increased during the past 10 years, respondents said. The survey and petition both note that ongoing Basel III regulatory capital changes have added further complexity and “the frequency and volume of information community banks are required to report do not properly consider the size and complexity of these already highly regulated institutions.”
“Recent expansions of the use of the Call Report as an information gathering tool for consumer protection regulation further damage the effectiveness of the information provided and the use of the report as a safety and soundness metric,” the petition says. “Community banks face complex, elaborate, and cumbersome reporting requirements on regulatory capital schedule RC-R due to the many capital metrics that must be calculated on a quarterly basis and that will be more complicated to compute when Basel III becomes effective next year.”
ICBA is calling for revised rules that would allow “highly rated, well-capitalized community banks” to file a short-form call report for the first and third quarters of each year. This streamlined report would “provide sufficient information for regulators to monitor safety and soundness while being significantly less burdensome to prepare, allowing community banks to focus more resources on their customers and communities.” According to ICBA’s survey, 98 percent of respondents said a short-form call report would reduce their regulatory burden, and 72 percent said the reduction would be “substantial.”
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