WASHINGTON – The FDIC has released a progress report it said shows that better communication, technical assistance and more efficient information flow between bankers and examiners can have a significant impact in how community banks view their regulator.

The report does not recommend changes to rules or guidance, and instead touts the steps the FDIC is taking around the edges to respond to specific banker concerns aired through roundtables held earlier this year.

According to American Banker, an affiliate of Credit Union Journal, the report also includes a thick stack of data about the evolution of community banks over the last three decades. FDIC officials said the data suggest the sector’s future is much brighter than some fear.

“The bottom-line finding is that even with all the of the consolidation that’s taken place and the market challenges that exist for community banks, the core community bank model of reliance on relationship banking funded by core deposits remains quite viable,” FDIC Chairman Martin Gruenberg said in an interview on Monday.

The report said the agency will begin piloting an automated tool next year to streamline materials used in consumer-protection exams – similar to a tool that is farther along for safety and soundness exams – and also described efforts to help guide community bankers through compliance with new rules and understand what regulations are around the bend.

Bankers aired complaints that will sound familiar to many credit unions – both on the economic and personnel-related challenges facing smaller institutions and also the regulatory process. Those included a glut of new regulations that banks say hurt lending, unpredictability around the release of more regulations, obligations to gather pre-exam material not relevant to a bank or used during the exam, the lengths of exam times, inconsistency between what teams focused on between exams, and the perception of “zero tolerance” related to fair-lending violations or other consumer-protection issues.


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