Community banks seek protection from regulatory requital in wake of Wells Fargo scandal

WASHINGTON – Community banks are trying to distance themselves from a legislative response to Wells Fargo’s massive consumer fraud, which cost the bank $185 million in fines.
The Independent Community Bankers of America, a trade group for nearly 6,000 community banks, sent a letter to Congress asking for targeted regulatory relief for community banks.
“Community bankers are gravely concerned that the legislative and regulatory reaction to Wells Fargo will again fail to distinguish between too-big-to-manage banks and community banks,” wrote Camden R. Fine, ICBA president and CEO. “Costly, unnecessary new requirements would only hamper community banks’ ability to serve their customers and further drive consolidation and concentration of the nation’s financial resources.”
The ICBA denounced the “rampant fraud” perpetrated by Wells Fargo, saying its transactions-based business model incentivizes abuse of consumers, a trait nonexistent at the community banking level. The trade group is worried a regulatory reaction to the fraud, however, could have overreaching qualities and negatively impact the smaller banks.
“Fix what’s wrong with American financial services by strengthening what’s right with it – community banks,” Camden wrote.

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