As someone who represents a smaller institution, this issue hits very close to home. Banks, especially community and regional institutions, are drowning in a sea of never ending regulation. As chairman, this will be one of my main discussion points in Washington. As pieces of Dodd-Frank continue to be unveiled and the Consumer Finance Protection Bureau (CFPB) keeps piling on new rules, like the Qualified Mortgage (QM) rule for example, pretty soon community banks will cease to exist. Right now many of us have more compliance staff than loan officers. We can no longer afford the costs of compliance. We need a strong community bank sector, they play a vital role in our economy.
Q. Florida banks also face competition from large credit unions. Please tell me your stance on that.
Credit unions were created with the intent to meet the credit needs of underserved, similarly situated individuals (e.g. plumbers and teachers), hence their tax exempt status. But today, there are credit unions like Suncoast Credit Union with $7 billion in assets, acting like a bank yet avoiding all the responsibility of paying state and federal corporate income taxes. Credit unions do not have CRA requirements, which means they do not reinvest in the communities they serve. The FBA has no issue with small, “mom and pop” credit unions; they have stuck to their intended purpose and should be left alone. However, when you reach the size of Suncoast or Vystar and become a multi-billion dollar financial institution, you should be required to pay your fair share of state and federal taxes and give back, just as banks do, and the easiest way to do that is to close their tax loophole. We certainly welcome the competition; all we ask is that it be on a level playing field.
Q. Capital requirements are also a sticking point. Please discuss that.
Capital requirements have certainly taken center stage in the last few months and at the end of the day, we as an industry agree that is our responsibility to stay well capitalized. There are several rules already in place that help ensure we do so. That said, the new rules that have surfaced, like Basel III for example, fail to grasp the unique qualities of the United States’ financial industry. Other countries do not understand the concept of the community bank and the role it plays within our system and it is evident in the broad, one-size-fits-all nature of these rules. Applying rules like Basel III to smaller institutions like the community banks or regionals will significantly cripple their ability to do business.
On that same note, there seems to be a general misunderstanding regarding big bank break-ups and how community banks feel about that. This may sound funny coming from a community banker, but breaking up our larger institutions would be a serious mistake. Everyone has their role to play within the financial sector. Community banks specialize in small business lending and home buying, but you are never going to see giant international companies like Caterpillar come to First Bank of Miami to meet their lending needs. Even if they did, we are just not equipped to do it.
We have to look at the bigger picture, and focus in on what is best for our country as a whole. To break up our country’s largest banks would put the United States at a serious competitive disadvantage globally and I think we lose sight of that from time to time.
Q. You have been the president of First Bank of Miami for more than a decade. Please tell me about the bank, its ownership, branch network and focus.
Our bank was founded in 1996. Our major shareholder, being a banker himself, serves on our board. We have five branches in the Miami-Dade County area from our head office in Coral Gables to Hialeah, Westchester, downtown and Kendall.
What is different about First Bank of Miami is not just the warm welcome you will receive at the bank; it is also our personalized approach to your banking experience. Our main focus is serving the financial needs of our customers, whether they are managing their personal finances or those of a business. We not only value customer and community dedication, we embrace it.
Q. I know the bank has been operating under a regulatory enforcement action since 2011. What is the bank’s position on that and what are the bank’s plans for the future?
The bank is committed to working closely with our regulators to correct all noted deficiencies, thereby restoring the bank to its prior strong ratings. We have dedicated the necessary resources to address these issues and favorable results are being obtained.