Academic journal article ABA Banking Journal

Dollars Spent, Dollars Earned

Academic journal article ABA Banking Journal

Dollars Spent, Dollars Earned

Article excerpt

Dollars spent, dollars earned

Somebody once observed that no one could fill out an entirely accurate tax return no matter how good their intentions. The complexity of the regulations, the incomprehensible forms, constantly changing rules, and recordkeeping requirements all conspire against accuracy. Growing list. It's getting this way with bank compliance, too. Tax compliance for banks is even worse than what individuals face--what with the rules for taxpayer identification numbers changing every year.

And tax compliance is just one part of the picture. Add to it the alphabet soup of federal regulations running, literally, from A to Z and beyond (CC is the latest and currently most infamous). Then there is FASB--the Financial Accounting Standards Board, which has been giving bankers fits recently.

It's gotten to the point where bankers are admitting openly that they know they are not in compliance with every regulation that applies to their bank. More to the point, they haven't got the resources to change that situation. This is particularly so among community bankers.

One banker attending a recent gathering of community bankers said that Regulation CC had not been a big problem for him. That's because, he admitted, "we haven't gotten around to it yet."

This is not a deliberate flaunting of the law--it's a commentary on how overburdened with unproductive and often unnecessary chores bankers are.

The matter has escalated from nuisance to burden. As a result, the ABA has among its highest priorities this year easing the burden and preventing it from growing heavier.

We're responding to the problem here at the magazine, too. You may have noticed our new monthly department, Compliance Clinic, that offers practical suggestions to compliance problems. This month we look at that old favorite, the Community Reinvestment Act. …

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