Tag Archives: community banks

Regulatory Relief Bill

Thanks to the power of grass roots advocacy and the support of pro-community banking elected officials, Washington has approved a very much needed regulatory relief bill.

The landmark Economic Growth, Regulatory Relief and Consumer Protection Act provides regulatory relief to our nation’s community banks, so they can continue financing and supporting the dreams of Americans in local communities like ours. For far too long, local community banks like Iowa State Bank and Trust have been hand cuffed by ever-increasing federal regulations that have raised costs, reduced local credit availability, promoted the decline in new bank formation, sparked bank consolidation, and lowered consumer choice while not providing any meaningful abatement in overall risk in the financial system.

By unleashing the economic power of community banks, lawmakers are providing greater access to financial services closer to the people of our farms, businesses, families, and organizations, and with banking institutions that truly puts customers first. This can only help continue our nation’s economic recovery and the growth of our local areas.

There is still more to do to right size financial regulation and scale it to bank size and focus. Bank’s like Iowa State Bank and Trust continue to labor under onerous requirements while trying to compete with government subsidized credit unions and agencies. Our industry will always fight to keep local community banking viable!

– Dave Eastburn, Chairman of the Board

Community Banking Month – April

The Independent Community Bankers of America, of which Iowa State Bank and Trust is a life member, is celebrating community banking in the month of April. The positive impact that the 5,700 community banks dispersed across the nation on their local areas is very important to the health of those localities as well as our nation.

When you bank locally, you are investing in your community. Community banks fund 60% of small business and more than 80% of agricultural enterprises. They contribute tax dollars that support schools, local municipalities, and counties.

You have a choice in your financial relationships, but as you choose, please consider:

COMMUNITY BANKS HONOR AND RESPECT THEIR NEIGHBORS AND COMMUNITY TIES: Banks such as Iowa State Bank and Trust are locally owned and managed, which means that they can only thrive if their surrounding trade area is viable and vibrant. The bank cannot be successful without the local community growing.

COMMUNITY BANKS BUILD RELATIONSHIPS: Bankers at Iowa State Bank and Trust seek to know their customers and deeply understand their financial needs. They go the extra mile to meet those needs through thick and thin. Customers are not just “transactions”.

COMMUNITY BANKS GIVE BACK TO THEIR COMMUNITIES: Serving the local area is second nature to the community bankers at Iowa State Bank and Trust. They give their time, talents, and a considerable amount of money to community organizations and school districts.

We encourage you to join us in celebrating Community Banking month and hope that you will give Iowa State Bank and Trust an opportunity to serve you.

– Dave Eastburn, Chairman of the Board

Insights from Dave

In the past several years we have all experienced the economic consequences of poor banking decisions. We have also experienced its personal tragedies which are the direct results from some very large, complex financial organizations using toxic real estate related products that incented fraud, as well as to over 2.6 million “fake” accounts opened to achieve flawed compensation goals. Should we shoot all the bankers? I’m afraid that those of us whose careers have been in the community banking world would like to make a clear distinction before we take such drastic action.

There is a very real difference in banking institutions. It can be broken down into two business models.  First, is the large, complex banks who view their customers as simply transactions. Everything is based on price and maximizing returns from the bank’s perspective only. They desire a high volume moving through their “distribution network” as quickly and as efficiently as possible. Therefore, they have very little involvement with their customers and provide minimal assistance. Second, is the smaller, community focused banks whose primary objective is to build relationships. Since they reside in the communities they serve, everyone at that bank has a stake in the economic prosperity of the area. They need and want to personalize their financial solutions and thoroughly get to know their customers. The impact of decisions on their neighbors, friends and the local community holds them accountable.

Why is this important? Because community banks that hold to the relationship model do not defraud their customers. In fact, they are the true engines of growth in the United States. In the past year, community banks extended financing to 76% of all of the small business applications made to them while large, transaction based banks fulfilled only 58%. Small businesses drive employment in our country. Community banks which control less than 20% of the banking systems assets, provided more than half of all of the small business loans in this country in 2016, and they did this with 75% of the customers reporting being very satisfied with their overall contact and experience.

Our economy and financial system does not need the concentration of 50% of banking assets and deposits in the hands of just 6 banks who are not committed to any local area or their customers. We need the diversification of 7,000 community banks spread across the country who are relationship based and customer focused.

– Dave Eastburn, Chairman of the Board