State's Top DFI Official: Ease Regulations for Community Banks

Sep 29, 2014

Charles Vice, Commissioner of the Department of Financial Institutions

The head of Kentucky's Department of Financial Institutions hopes to see some easing of federal banking regulations for community banks.  Charles Vice testified earlier this month before the U.S. Senate Banking Committee. Vice says community banks shouldn't have to bear the punishment for problems they didn't create. 

"Almost everybody universally acknowledges that it wasn't community banks, smaller community banks that created the recession.  However, with all the new rules and regulations coming out, they're having to comply with a different set of rules and regulations to address things that they didn't necessarily cause," said Vice.

In order to deal with stricter regulations, Vice says some Kentucky banks are opting to significantly scale back on their mortgage services.   

The commissioner believes the real estate market in rural Kentucky faces obstacles related to time and distance.   Vice says appraisers are not always readily available in eastern Kentucky. 

"Sometimes in eastern Kentucky it is hard to get a qualified appraisal because there's not a large number of appraisers in the area. So sometimes an appraiser has to come from two to three hundred miles away into an area that they may not be familiar with and there's not a lot of sales activity so it's hard to find a comparable sale," added Vice.

Vice also fears there will be additional bank consolidation, which he says, only serves to limit banking services in some communities.​