Rebeca Romero Rainey is the President and CEO of ICBA (Independent Community Banks of America). In her recent blog, Main Street Matters, she shares with us the importance of community banking epically when it comes to times of trouble. This is pointed directly at the SBA Paycheck Protection Program (PPP) loan process that we are living right now.
Community Banks (including Community State Bank in Southeast Wisconsin) worked tirelessly to A) communicate, B) process and C) close PPP loans, all while the big banks didn’t get past A (in most circumstances) and chose to cherry pick the ones they wanted work with.
Rebeca's article perfectly captures how community banks, like CSB, rose to the challenge to serve the needs of their community. I hope you enjoy!
Community Banks Respond to Americans' Needs
June 24, 2020
By: Rebeca Romero Rainey
I’m an optimistic kind of person, often finding the silver lining in difficult times. While we have never before experienced anything quite like COVID-19, we can identify a bright spot: community banks rising to serve the needs of their communities.
While this “community first” philosophy is nothing new for community banks, the Paycheck Protection Program (PPP) cast a national light on the role they play in supporting America’s hard-working small businesses. In fact, FDIC Chairman Jelena McWilliams recently referred to community banks as “the small engines that could and did and delivered big,” and countless news features raised the profile of the can-do mentality at the center of every community bank.
Because community banks delivered for small businesses when they needed it, they now have the nation’s attention. This newfound spotlight means they have a platform to amplify their voices to ensure Americans recognize all that community banks stand for and all that they provide.
For example, community banks serve areas that otherwise may not have access to local financial services. In fact, 35 percent of counties in the U.S. are only served by a community bank, and more than 80 percent of all agricultural loans come from community banks.
In addition, community banks support individuals of moderate means. Low-income counties in 28 states are more likely to be served by a community bank than a credit union. What’s more, a National Community Reinvestment Coalition study found that banks outperformed credit unions on 65 percent of fair lending indicators in home purchase, refinance, and home improvement lending to low- and moderate-income areas.
As small businesses themselves, community banks have stepped into the shoes of every small business that has come to them for help. Community bankers don’t just see a loan request; they see the lifeline for the future of the small business. As a result, they have processed more than 65 percent of the 4.6 million approved PPP loans and more than 63 percent of the $515 billion in funds approved since the program's launch. In fact, 82 percent of banks under $1 billion in assets participated in the PPP program. This crisis magnified that community banks truly are there for the communities they serve.
And community banks continue to provide service that makes them the small business lender of choice. According to the Federal Reserve Banks' latest Small Business Credit Survey, which features pre-COVID responses, 79 percent of community bank small-business loan applicants were satisfied with their experience, and community banks' net satisfaction score of 73 percent continued to lead as it has in recent years, topping large banks by 15 points, finance companies by 23 points, and online lenders by 36 points.
While COVID-19 may have wreaked havoc on our nation’s economy, community banks were there to help pick up the pieces and support customers, small businesses, and others who needed a champion in their corner. And that’s an important story to tell. I encourage community banks to continue to share their successes and help raise awareness of the role they play as the cornerstone of community.
Rebeca Romero Rainey is ICBA President and CEO.
There are only a few times in a person’s life that you meet someone and know immediately that this person is not like most humans walking the face of this earth. I met one of those people when I first moved here about 6 years ago.
Frank Lamping is that person. In today’s environment of "what’s in it for me", Frank was the complete opposite. In his mind it was always, "what can I do for you today". Even when he was battling an ugly cancer, he didn’t waiver. He always looked for the best in people. He always helped those who couldn’t help themselves. He was the most positive person that I have ever met.
Last year Community State Bank recognized Frank by naming a community award in his honor. Of course Frank was embarrassed by the attention that he got and said many times that there were more deserving people than he.
I didn't disagree with Frank on many things, but that I did. There was no better role model than Frank Lamping. It saddens me that he is no longer here to continue in that role, but I’m happy to know how many people he is helping in heaven.
Frank passed away today. I ask that to honor Frank, we all start acting like Frank. If everybody did, this world would not look like it does today.
The last few weeks on the Facebook Go Frank Go Community Page, so many of Frank’s friends and family were praying for a miracle. The miracle of healing and that Frank would continue to be with us here on earth. The beauty of that prayer is that it was already answered… We already experienced that miracle. Frank was the miracle and he will continue to live in our hearts, minds and community for many years to come. Our love, thoughts and prayers go out to all of his friends and family. He will be missed greatly.
On June 19th, 2020, our CSB Crew asks everyone to help us in filling our community with green & gold in honor of our friend, Frank Lamping.
We recently returned from a Christmas vacation that was very relaxing and allowed me to spend some quality time with family. I hope all of you had a great Christmas! I’m sure you're now gearing up for the start of a new, fresh 2019.
Being in the service business, I spend a lot of travel time observing how others in the service business act. Many times, you walk away from an interaction with someone and are totally unimpressed. People don’t seem to care and sometimes you even feel like you are putting them out. That used to shock me, but today it seems to be more the norm. Every once in a while you get the complete opposite.
On our recent vacation, I asked one person who was driving a hotel shuttle back and forth to the airport "How are you doing today?" He looked at me, smiled and said, “I’m blessed!” I have to admit that his answer took me back a bit as I wasn’t expecting that response. I asked him why he was blessed, and he said “I have a great family, I have a job and I get to work with some great people.” Again, that surprised me, and I said "That’s great news." I may add that I wasn’t even in his shuttle, so he wasn’t just trying to get a better tip. It was who he is. He made my day.
"We all control our attitudes. Take an extra 15 seconds each day to think about controlling it positively. "
Every day we have the opportunity to surprise someone. Maybe your spouse, maybe a coworker or maybe a friend. Wouldn’t it be cool if everybody in this world didn’t surprise you? Meaning they acted that way all the time... positive. This world would be a much better place to live in.
We all control our attitudes. Take an extra 15 seconds each day to think about controlling it positively. My friend driving the shuttle is a great example of that.
You are a bad person… Just believe me!
For those that know me, I’ve been a bit of a political follower most of my life. Those closest to me know which side of the aisle I choose the majority of the time. This recent election campaign has been ugly and brutal. I will also say that it has not been one sided. Everyone has participated in the ugliness.
Recently, I had a conversation with an elected official who I know, trust and support. I asked this person why every candidate has to be so negative and does the negativity really work? The response was that recent studies and data show that if a candidate only takes the high road they will likely lose. The more that I think about this, the more it bothers me. Unfortunately, it tells me where we are as Americans these days. I will also say that this isn’t something new. It’s been going on for decades, but it just gets more ramped up each and every election cycle.
My lovely bride and I have two adult children and no grandchildren...yet! I don’t lose much sleep when I see ad after ad after ad of one politician (or outside organization) taking another person to the lowest possible denominator and in many cases far beyond that. I shake my head and sometimes just start laughing...for you younger people that would be an LOL. Many times say kiddingly “Oh my gosh! If this person gets elected we will all die!”
I feel very sorry for those young families with impressionable kids watching this crap all day long. Many parents work so hard to bring their kids up in a respectful and hardworking environment. We tell kids to respect their elders, but at the same time their elders are acting more childish than my kids did when I told them they couldn’t have a toy when they were 5 years old.
So what do we tell our kids? Don’t pay attention to the government officials? Do we tell them that they don’t really mean what they’re saying? Do we tell them that this is just how it is in America? Do we tell them not to act like this?
I love free speech, but with that comes responsibility. It saddens me to think that in order to get elected in our country, one must spend millions tearing apart another person…sometimes even their family. This isn’t a Republican or Democrat thing. It has turned into an American thing, and it’s something this 55 year old person isn’t very proud of.
What will banking look like in the future?
Recently, a large regional bank made the announcement that they were going to take away all their customer facing mortgage lenders in every one of their offices. They plan on taking care of everybody via a call center/web page moving forward. So the question is…..will this work?
Every year that goes by the “easy to recognize” differences between large banks and community banks seems to be clearer. As a self-proclaimed community bank junkie, I find these differences very interesting and thought provocative. It's kind of disturbing and exciting all at the same time. The big question is… will community banks survive?
The market area of the community bank that I’m privileged to work at, consists of 3 primary counties located in what I call SE, SE Wisconsin. Going back about 20 years, there were probably 15+ banks that called this market their home. Banks that were chartered here and had their headquarters here. Today there are only 4 remaining. That’s the disturbing part!
The exciting part is that I believe we still provide a unique service in our markets. I believe that a large number of people (not everyone) still value the face-to-face interaction that a community bank provides. I also realize that this only goes so far, and those customers still need and deserve the same technology that our larger counterparts provide. It takes money to put team members in a branch. It takes money to deliver our products with very similar technology that the big regional bank has. Will customers and prospects see the value? We believe that some will, and have bet on that with expanding our branch network and hiring mortgage bankers when competitors are eliminating them.
The big banks will call me old fashioned and out of touch. Maybe so, but I don’t believe I am. I still think it’s important to have employees where our customers are located. It’s important that those employees help develop and grow their communities. It’s important for customers to see our employees at the grocery store and at church. It’s important that we know who you are. It’s important to have our employees spend hundreds of hours on community events. It’s important to support and staff leadership in the many non-profits in our area. It’s important to call SE, SE Wisconsin our home!
My hope and wish, is that it’s also important to you. Time will be the judge.
As always, your thoughts, comment and concerns are welcome. At a community bank you can still connect with the President!
President / CEO | Community State Bank
Direct: (262) 878-3763
I've been a community bank junkie for a majority of my 30+ year career. I love working with customers, communities and non-profits and helping them succeed in their everyday lives. It has been rewarding and gratifying to do so.
That being said there’s one area of the bank that I’ve not enjoyed over the years and any banker that says they have would be telling a little fib. It’s the compliance area.
First, please allow me to explain a little history. The FDIC was started in 1933 right in the middle of the great depression which lasted from 1929 to 1939. The FDIC stands for "Federal Deposit Insurance Corporation." Yes that is correct, the FDIC is an insurance company. The main purpose for the United States Government to start the FDIC was defined this way: The FDIC's purpose was to provide stability to the economy and the failing banking system. Officially created in the Glass-Steagall Act of 1933 and modeled after the deposit insurance program initially enacted in Massachusetts, the FDIC guaranteed a specific amount of checking and savings deposits for its member banks.
In other words the FDIC's purpose was to "insure" depositors for their money (up to certain limits) held at banks. In the banking world we call that "safety and soundness", meaning the FDIC regulated banks to not get over their skis. It allowed the opportunity to develop a business model that made the bank money and thus helped the community and everybody was happy.
That part of this makes a lot of sense to me. The next part doesn't.
Over the years the regulations grew and it was somehow determined that banks would be responsible for all of the hundreds of compliance agendas. When I started in this business in the 1980's the "compliance officer" was the person who showed up to the meeting late. It was a title, but it didn't require much work. Safety and soundness was the #1 concern.
Jump forward 34 years and now community banks have departments of compliance staff and spend thousands of dollars on top of that hiring outside consultants to make sure we are meeting the agendas of all the regulatory agencies and departments. Some of those rules that we have to track and live by include TILA, RESPA, TRID, FCRA, ECOA, SAFE Act, TISA, EFA, EFT, FLOOD and HMDA just to list a few. Pictured above is a manual from our good friends and the Wisconsin Bankers Association who recently conducted a 2 day training session for Regulations Z... TRID and all of the changes that are happening on August 1st, 2018. To give you a better idea of how in depth these changes are, this manual is 238 pages long. All of the others I have listed above have pretty much the same thing. To be fair, the FDIC’s responsibility is to carry out the laws and regulations set by the US Government, they are the messenger and gate keeper.
I have the honor and privilege of being the President and CEO of a great community bank located in the 3 counties of the lower part of Southeast Wisconsin. This bank has been around since 1898. I would love to be able to ask the first President of this bank if he, in his wildest dreams, would have ever thought it would be like this 120 years later. In fact, I would love to ask the people who started the FDIC in 1933 the same question. I'm guessing that I know the answer.
A generation ago the markets that we serve were dominated by many community banks. Today we are a very small minority in our markets. Gone are the many community driven organizations replaced by the huge corporate banks that are headquartered all over the country and the world. Why has this happened? One big reason is that many community banks have waived the white flag because of what I have just explained.
If all goes well, and I don't screw things up too bad, I hope to be the president of this great bank for the rest of my career. I feel that there’s a need for a community bank that actually gets their hands dirty in the community. One that supports non-profits. One that accepts local deposits and puts those deposits back out in the form of loans in our very own communities. One that when a customer has a problem we get in our cars and go see them. One that doesn't look to be highest earning bank in the world, but the most respected.
It’s correct that there are a lot fewer community banks today, but this guy believes that a strong community bank makes for a stronger community. I hope that many of you believe the same thing.
It is easy for me to get caught up in the senseless terrible things going on all around me. What used to only happen in big cities is now happening in small towns. The apparent total disregard for all things good gets me questioning our future.
There is one activity that I attend each year that helps me restore my faith in people, especially young people. I'm talking about our local county fairs. Volunteers at our bank go early in the mornings to share milk and donuts with the young people showing animals. The appreciation and respect is something I don't encounter everyday. The obvious display of hard work and a true love of what they are doing brightens my attitude. It's parents and grandparents working hand-in-hand with their kids pointing out the value of that hard work and dedication. It's those same parents and grandparents teaching them to appreciate people who do nice things and encourage them to do the same.
I hope that someday these really neat young people will be the future leaders of our country and our communities. Who knows, maybe one will even be a leader at Community State Bank. I sure hope so.
Have you ever heard of the term “mortgage burning?” If you haven’t, ask your parents or grandparents as I’m sure they have.
Mortgage burning ceremonies are really a thing of the past and I want to bring them back. Banks used to send out the actual mortgage when a mortgage loan was paid off. Many people actually burned their mortgage in a sign of financial freedom. They no longer had the largest debt hanging over their heads. Some might even be jealous to see this happen.
We have become a society of change. Our parents or grandparents may have lived in only one house their whole lives, while today, people have owned many. That by itself isn’t a good excuse to eliminate the grand ceremony of burning your mortgage!
So many of you are asking, "Where do I start?" Well, the first thing I would recommend is to consider doing a 15 year mortgage instead of a 30 year mortgage. This idea isn’t popular with many in the real estate business, because they will tell you that you can buy more house with a 30 year mortgage. The downside of this is that customers will be paying for it twice as long. The truth is that you may be able to afford a slightly higher priced home with a 30 year mortgage, but the difference is not significant. Here is an example of the unbelievable savings comparing a 30 year to a 15 year mortgage on a $150,000 loan:
(After 15 years you could take the house payment money and put it towards college education or retirement.)
Now, I realize that we're in the business of earning interest on loans you secure, but I can also assure you that our number 1 fundamental is to always do what’s best for you, our customers. I would be honored to attend your mortgage burning ceremony! Just let me know when it is.
NOTE: The example above is for informational purposes only, and uses estimated APRs.
I know, I know... the everyday citizen doesn’t feel sorry for us Community Bankers. They've heard from the government about how the banks “Just don’t loan any money out” and at the same time actively enforce a 20,000 page regulation called Dodd-Frank, which was rolled out in 2010. It stifled growth and handcuffed banks from doing what they do best, which is taking care of our customers. It made it next to impossible to assist borrowers who needed some help. Oh yes, they said it didn’t, but I can assure you it did.
Well, the government got what it has always wanted (in my 35 year banking experience and knowledge), which is fewer banks. There were 7,357 federally chartered banks in 2011 and now there are 5,980. That trend doesn’t appear to be changing. Fewer young people are looking a banking as a rewarding career, because they see and hear what’s happening.
The new administration has been saying all the right things. They claim to understand what Dodd-Frank has done to us and small town America. They say they are going to roll back the strangling parts of the bill that don’t make sense... at least not to a $325 million community bank in SE Wisconsin. They say they will place more trust in people who have demonstrated doing it right for many years.
So my plea to them today is to just do it. Allow us to go back focusing on our customers. Let me spend my day helping people. Bring common sense back into the equation and we will all be better for it.
I have had the privilege of spending my entire life with one of the most humble, caring people ever to live. A person who’s deepest wishes were that her family cared and looked out for one another. A person who taught me the difference (and importance) of right and wrong. Someone who made going to church fun and understood the importance of the meaning. Someone who taught me the love of music. A person who cared about less fortunate people. Someone who would let you know if she thought you were out of line. Someone who gave unconditional love to her family and to many of the people she came in contact with.
This lady did not judge people and made everyone feel included. She was someone who cared about other’s happiness way before hers. Someone who didn’t find the need to say bad words, except for that occasional bad driver who made her mad. Someone that could transfer tears into smiles. A person who knew no strangers. Someone who considered her marriage vows a lifelong commitment and expected the same from me. A lady that could tell you the life story about a waiter or waitress after leaving a restaurant. She reminded me often of what’s really important in this life.
My mom passed away on October 17th of this year at the age of 75 after a very short illness. I’m going to miss her a lot.
During this election year I hear politicians talk about how they are going to solve our problems. In reality, if everyone lived their lives like my mom did, the problems would go away.
Scott Huedepohl is the President of Community State Bank, and has been a community banker for over 30 years.