Now’s the time to seek meaningful reg relief and other reforms

Editor’s note: Abram Tubbs, Chair of the Board and CEO of Ohnward Bancshares, Inc., Maquoketa, Iowa, was elevated to chair of the Iowa Bankers Association at the association’s annual convention in September. Following is a condensed version of remarks he delivered upon being named president..I spent much of my youth and most of my adult life attending banking conventions — too many to count. Two quick stories from my days attending these as a kid.My first is a fond memory and marks the start of my Los Angeles Dodgers fandom. Tommy Lasorda was the keynote speaker and, at an event much like this, came to my table because I was the lone kid in a room full of bankers. (No offense.) He signed a note for me and asked me to be a Dodger fan. I’ve honored that request ever since.My second, less enjoyable memory came during a heated game of sock basketball with my brother in a Kansas City hotel room. On one play, I was checked face-first into the carpet. Instead of a free throw, I got a trip to the ER. Dad had to interrupt dinner downstairs to take me. Some might say, “If you haven’t had a trip to the ER at a banking convention, you’re not having enough fun.”I hope to live up to the legacy of the leaders who laid the groundwork for advocacy and progress in this role, including my father, Al, and my grandfather, Ed, who served in 1995 and 1981. Last year, I helped select Adam Gregg as our new CEO upon John Sorensen’s retirement — the same role my father served when John was hired in 1996. They’ve all been strong influences in my banking life.As we look ahead, we must recognize the opportunity before us in today’s regulatory environment. Now is the time for tailored, right-sized reform. This isn’t new — my father, who served as both ABA and IBA chair in the 1990s, spoke often about the same challenges: The cost of regulatory overreach, the unintended consequences of one-size-fits-all policies, and the importance of giving banks the tools to thrive, not just survive.Reading through some of his old speeches, I found nearly all mentioned the burden of over-regulation on banks, customers and communities alike. During my first year of college in 1989, I wrote a paper titled “Too Big to Fail,” highlighting the disparity between government intervention for large institutions and the neglect of small community banks. That was my first real study in fairness — or lack thereof — in financial oversight.A recent example of this “too big to fail” dynamic was the 2023 collapse of Silicon Valley Bank. With $218 billion in assets, it was the 16th-largest bank in the nation, and 94 percent of its deposits were uninsured. The FDIC stepped in under the systemic risk exception and covered them all. Contrast that with the 2024 failure of First National Bank of Lindsey in Oklahoma, where only half of the $7 million in uninsured deposits were made available. Some depositors still haven’t recovered the rest.We operate in a deeply regulated industry, yet those regulations aren’t applied equally nor are they keeping pace with change. They also fail to recognize that each of our banks is systemically important to our communities.Fortunately, we now have one of the most supportive federal environments for reform in recent memory. There are key areas that make sense to modernize — reforms that create efficiency without sacrificing safety and soundness. The cornerstone of any modern regulatory system must be tailoring.Community banks bear the heaviest burden when regulation isn’t properly tailored. Current thresholds are inconsistent and outdated. We will push for higher thresholds aligned and indexed to inflation so they remain relevant over time.We all know the value of deposit insurance — but we also know the system isn’t always fair, and the burdens aren’t always balanced. That’s why the IBA will form a dedicated committee to build on the ABA’s recent work. Iowa banks can play a major role in shaping a smarter, more responsive FDIC.Our third reform priority is modernizing examination and reporting requirements. We should advocate for adjustments in exam frequency and scope, and for updates to the Truth in Lending Act and Bank Secrecy Act. We’ll also pursue changes to currency transaction reporting thresholds to reflect today’s economy.These reforms will allow us to keep doing what community banks do best: building relationships, investing locally, and expanding financial access where it might not otherwise exist. Banking in Iowa is highly competitive — ranked 50th in the nation for net interest margin — showing how much we pass on to customers through lower borrowing costs and higher deposit returns.We’re also monitoring the rise of stablecoins and its potential impact on our industry. Now is the time to work together — across committees, counties and party lines — to bring about meaningful reform that honors the spirit of community banking.