Clark Hervert
Clark HervertOpposeBusiness
Summary: A small rural bank owner opposes the proposed rating system because it will increase compliance costs and administrative burdens for smaller institutions. They argue that the manual processes required to comply with the new standards will be disproportionately costly and request an exemption for banks with assets under $150 million.
Our bank's cost of compliance may rise as we attempts to understand the factors on which ratings will be based. Although the proposal seeks to provide clearer expectations and stronger method for rating, for small banks like ours the compliance costs are a heavy burden and changes further increase those costs.
Similar to the CECEL changes, this may generate unintended consequences and costs for our size bank who use manual procedures to comply. Detailed manual processes equal increased costs and time spent. Although the agencies expect that the intended reform to the CAMELS rating system will improve outcomes, I question if very small, rural banks like ours will not have improved calculation of our CAMELS for the burden and costs incurred. Please exempt banks like ours, $150 million, and retain the existing calculation.