Overzealous and misguided supervision contributes to crushing compliance costs for community banks, according to FDIC Vice Chairman Travis Hill.
Details: Speaking in Washington, Hill said bank examiners should focus less on procedural checklists and instead address certain bank stability risks. He also said the FDIC needs a new direction and he expects that to begin Jan. 20.
Standard-Setting: Hill added that it is worth revisiting the idea of a public-private organization that would establish standards for due diligence of fintech vendors, which he said would reduce the need for each bank that partners with a fintech to conduct costly, time-consuming due diligence of its own.
ICBA View: In a comment letter to the agencies on bank-fintech relationships last fall, ICBA said a standard-setting organization and certificate program would make it easier to get new technologies through a bank’s internal approval process.