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ICBA Testifies for Improved Exam Appeals Decisions

Washington, D.C. (February 1, 2012)—Noah Wilcox, fourth-generation president and CEO of Grand Rapids State Bank, Grand Rapids, Minn., and a member of the Independent Community Bankers of America (ICBA) Executive Committee, today voiced support for the Financial Institutions Examination Fairness and Reform Act (H.R. 3461). Testifying before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, Wilcox stressed the often arbitrary and oppressive nature of the current bank exam environment and its deterrent effect on lending, while saying that a truly independent appeals process is needed to better reach fair and unbiased results.

“Community bankers nationwide have increasingly noted a trend toward more arbitrary, micromanaged and unreasonably harsh examinations,” Wilcox said in his testimony.  “Community bankers are often forced to pass up sound loan opportunities in order to avoid examiner criticism.  This hurts their communities and overall economic growth.  There has to be better balance in the exam and appeals process.”

Reforming the appeals process to address the current absence of independence and potential bias in favor of protecting the examiners’ conclusions would offer relief to bankers who are frustrated with controversial exam decisions.  ICBA supports H.R. 3461 to help improve the appeals process and create a foundation on which to build a more transparent process in the future.

“A fair appeals process would help improve exams,” Wilcox said.  “Examiners would be more circumspect knowing that bankers have access to a workable appeals process.” 

Wilcox also expressed ICBA’s support for the provisions of H.R. 3461 that would create common-sense criteria for loan classifications.  For example, no performing commercial loan could be placed on non-accrual status solely because its collateral has deteriorated.

Wilcox closed by saying that these provisions would improve the regulatory environment and community bank viability, to the benefit of their customers and communities.  

For more information, and to read the full testimony, visit www.icba.org