Magazine article American Banker

Bankers Praise Gruenberg's Tone, but Skeptical of Message

Magazine article American Banker

Bankers Praise Gruenberg's Tone, but Skeptical of Message

Article excerpt

Byline: Paul Davis

SAN ANTONIO a Acting Federal Deposit Insurance Corp. Chairman Martin Gruenberg provided perhaps his strongest support yet for community banks on Tuesday, stating that looking after smaller institutions is an important component of the agency's role as a policy advocate.

Speaking at the American Bankers' Associations annual conference, he told attendees that there is "a public interest to be served" by protecting smaller institutions. "Community banks have a role to play in our financial system," he said, particularly with small business lending and providing services in rural markets. "Community banking is a niche a[bar] that is unique."

"At the FDIC, there is a strong interest in having a dynamic community banking presence in the industry," Gruenberg said.

Gruenberg has taken a few opportunities in recent weeks to voice his support for community banks, beginning with an address at American Banker's Regulatory Symposium in September. At that event, Gruenberg called the agency's overall effort to address community banking a "major priority" in the near future.

Still, a number of community bankers were cautious to declare a sea change in FDIC policies towards smaller institutions.

"It's nice to hear someone at his level say" that community banks are important, said John Boyer 4th, the chairman and CEO at Kanza Bank in Kingman, Kan. Kanza is a family owned bank with roughly $200 million in assets. "But it is not a new message. I'm still a bit skeptical and I want to see how it plays out. …

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