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Annual Reflections

Ninth District Highlights - December 2018

January 3, 2019


Christine Gaffney Senior Vice President, Supervision, Regulation, and Credit
Christine Gaffney

It’s that time of year at many organizations when we become consumed with year-end activities like performance reviews and salary administration. This Federal Reserve Bank is no different. As I have been working through these activities, it gave me a reason to stop and reflect on what I have learned this year.

In this article, I will summarize my lessons learned in 2018 into three broad categories: (1) listening matters, (2) the uncertainty of the regulatory environment requires careful messaging, and (3) bankers share consistent concerns.

Listening matters

Listening truly is a skill—it is an ability we do not all readily possess. As I reflect back on this year, I am reminded of the numerous opportunities I have had to hear from many of you readers and other stakeholders through a variety of events. We have described our outreach efforts in past articles in this publication; however, that is not the only way in which I have received feedback, input, or questions. In addition to people reaching out to me directly, we have other formal outlets designed specifically as listening sessions. For example, each Federal Reserve Bank routinely receives formal input through groups like the Community Depository Institution Advisory Council (CDIAC)  and through its board of directors.

At times the feedback or input I receive sounds very similar or repetitive, or the comment is prefaced with “you’ve heard this before.” This year I learned that it is still important to take note, even if I have heard the information previously or it appears that nothing has changed. This came to light when I began to notice slight nuances in stakeholder responses to questions that previously yielded the same answers. These nuances proved to be an evolution in things like economic conditions or areas of concern that helped us at the Federal Reserve better understand stakeholder views, which affirms that listening matters.

The regulatory environment requires careful communication

Among the topics people discussed with me the most this year was the uncertainty of the regulatory environment. We now have a bit more certainty on specific aspects of regulatory reform since the passing of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) legislation; however, the implementation of that law is still largely in process and is therefore uncertain in some aspects. That said, with the recent election and split control of the House of Representatives and the Senate, it is reasonable to believe more changes could come, depending on the interests of our congressional constituents. I have heard loud and clear the belief that EGRRCPA did not provide enough relief to small community banks. In that vein, I learned that careful communication matters. The legislation was publicized in many circumstances as relief for small banks, but that really is not the case. While I was aware of this from being so close to the legislation, I still noted the lesson of conducting my own research rather than relying on headlines, particularly on a topic as nuanced as regulation.

Bankers share consistent concerns

The two broad categories above feed into the lesson learned that bankers are consistent in the concerns they share. I can always count on bankers to be honest and open with input and in providing their views, but more importantly, I learned through discussion after discussion that the things bankers care about tend to be consistent, regardless of where or how I hear the information or in what part of the Ninth District I am located. For example, in almost every conversation this year I heard about the rate environment, the effect of tariffs, agricultural conditions, tight labor markets, and lack of affordable housing. Bankers are also quite consistent in noting regulatory burden, particularly for the smallest community banks. Flashback to my listening matters section above—I learned that while bankers are consistent, they can change their views. More specifically, I noticed a shift—for the first time ever—in more acceptance of banking regulation. Trust me, I did not hear that bankers like regulation; however, I definitely heard more of a general “we understand it’s the cost of doing business” than I ever have.

What did you learn?

As you close out your 2018, I encourage you think about what you learned this year. Do your reflections show similar views with which you started the year, or do you have any subtle shifts in your perspectives? Will your lessons learned lead you to do anything differently in 2019? As we continue our interactions through regular examination work, conferences, or outreach events, I look forward to learning even more from each of you next year!

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