Academic journal article ABA Banking Journal

Q Overzealous Examiners. Can Anything Be Done? an Interview with Policy Expert Mark Tenhundfeld

Academic journal article ABA Banking Journal

Q Overzealous Examiners. Can Anything Be Done? an Interview with Policy Expert Mark Tenhundfeld

Article excerpt

ABABJ: A lot of bankers have given ABA feedback that examiners are being extremely conservative in their exams. Is there a disconnect between the regulators in D.C. and examiners in the field or is overzealousness in exams the new goal?

Mark Tenhundfeld: It appears to be more the former. When you talk with the senior managers in D.C., they sound like the voice of reason. But then we hear from bankers about how examiners in the field continue to take very conservative positions that are contrary to the guidance issued by the folks in headquarters.

ABABJ: Are there any hopeful signs?

MT: The recent guidance from the agencies is a good first step. It shows that the heads of the agencies at least recognize the downside of having the supervisory pendulum swing too far. It's also encouraging that the regulators have been willing to meet frequently with bankers and ABA staff, both at large conferences and in smaller gatherings, to hear the issues that the industry is facing. However, the agencies need to do more to create an environment that is genuinely conducive to prudent lending.

ABABJ: What can be done to keep things moving in that direction?

MT: We have suggested several steps the regulators could take today that would help a significant number of banks in the areas of capital, asset quality and liquidity, and we will remain vigilant in pursuing these and other ideas. …

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