Page 288 - BWM March 2013

288 | Business World Magazine | March 2013
es and technology they expect, equal to that
of larger institutions, it becomes easier for
them to want to do business with a commu-
nity bank because they recognize the bank is
actually working with the community. It is
a win, win situation.
Predominately a small business and agri-
cultural lender, over the last year, the bank
has also expanded its residential mortgage
program, offering what could be considered
traditional mortgage underwriting. Lober
explains that Consumers National never
adopted the crazy lending standards that
were widespread prior to the bursting of the
home-lending bubble. “We never engaged in
“exotic” financing schemes (plans that relied
on interest-only payments, 40 year amortiza-
tions and option-ARMS).When that mar-
ket dried up, many mortgage brokers went
away, so we decided to expand our service,”
says Lober. The bank adheres to tradition-
ally stable practices in its mortgage program,
and engages a specialized team because resi-
dential mortgage loans now take more time
and require more oversight due to increased
regulatory requirements.
Regulatory issues prompt another im-
portant observation from Lober, pertinent
to the manner in which many community
banks are now dealing with increased regu-
latory compliance costs. “We already said
how we’re different from the big banks. We
didn’t participate in the lending and invest-
ment practices that ultimately brought the
country to a standstill, but we have gotten
our fair share of the extra regulations and
new laws designed to quell what led to the
banking crisis,” he explains. “We incur the
extra compliance costs, which is frustrating
because we didn’t cause the problem. Com-
munity banks helped keep the economy go-
ing and now we’re being punished the same
as the big guys.”
Lober says that some banks may decide
not to, or be able to absorb those extra costs.
He anticipates that we will see some smaller
banks consolidating in order to overcome
the challenges. “The efforts to punish and