Jack E. Hopkins: Riding the Pendulum of Regulatory Compliance

Over the past decade, community banks have experienced our fair share of pendulum swings when it comes to regulation. We seem to toggle from one extreme to the other, with the most aggressive onslaught of regulations appearing in the past five years or so. Yet, we’re finally starting to see a healthy backswing, paving the way for a more productive environment for community banking. 

This regulatory rightsizing allows us to be more optimistic. Rule writing has slowed down, hindering rules that were enacted are being edited or rescinded, and we’re not faced with an onslaught of new compliance issues. Because we’re not trying to navigate a terrain of compliance pitfalls, we have more time to do what we do best: help our customers and our communities. 

However, even in the face of optimism, we recognize that with regulation, the only constant is change. That’s where ICBA and its pillars of advocacy, education and innovation truly step up to help us. 

From an advocacy standpoint, our work explaining the way regulations can tie our hands has clearly had an impact. (See my top three, right, for some big wins.) We have to keep telling the community bank story to ensure those messages are heard. We also must remain ever vigilant and prepare for what may be in store. 

For that, the key lies in ICBA Education. At my bank, at least one team member has earned nearly every certification ICBA offers, with some boasting multiple certifications. We take pride in ensuring we have knowledgeable staff, and that investment in their professional development has been one of the best things we’ve done. For instance, our compliance exams go well because of their depth of knowledge; we have had examiners comment that they are impressed that we have so many highly trained staff. 

Innovation also strengthens our compliance response. New technologies are emerging that can streamline our efforts, more efficiently execute compliance screenings, and flag potential issues. For example, my bank is now actively considering new AI-type products that will allow us to effectively address compliance red flags without increased manual intervention—a win-win for our bank and team. 

However, basic physics tells us an object in motion stays in motion, and that regulatory pendulum will continue to sway. But with ICBA here to support us, no matter the environment, we will be prepared for our compliance future, armed with the right messaging, talented teams and state-of-the-art technology. 

Thankfully, with that kind of support, we’ll collectively be ready to ride out the next compliance swing when the time arises.