Addressing proposed accounting changes...

One of our IBANYS members has recently been a voice for smaller, community banks in the accounting world. On December 1, 2011, Anne McKenna, Senior Vice President of Tioga State Bank visited FASB with several other independent community bankers from across the country, as a delegation from ICBA. On February 7, 2012, she represented the ICBA at an accounting roundtable convened by the Financial Accounting Foundation, the parent company of FASB. Ms. McKenna was kind enough to give her take on the meetings, and her experiences:

 As independent bankers, we must continue to stay on top of regulatory changes in our industry and advocate for a better understanding of community banks in relation to our larger, more complex peers. This is also true in the accounting world. The Financial Accounting Standards Board (FASB) promulgates rules that are critical to all industries, including financial institutions as well as the businesses we serve. Because the rule-making bodies in this country often think of the larger, publicly-traded institutions when deciding on regulations, we continuously try to draw a distinction between the business model used in most community banks from the business model used in most money-center banks. We understand some level of regulation is necessary, but the regulations should be relevant and reasonable.

Our group spent an hour meeting with several members of FASB where they each provided reasons why many of the proposed accounting changes are irrelevant to thousands of banks in this country and requested consideration when changing Generally Accepting Accounting Principles (GAAP). An example included determining Fair Value on specific loans in our portfolios. Even if determining a true Fair Value was possible, it is costly, time-consuming and irrelevant to our business model. The FASB team asked pertinent questions, made notes and seemed to understand the concerns. They also said that they are working closely with banking regulators on a regular basis. This is extremely important, since many of the proposed accounting changes may adversely effect Capital positions.

 The purpose of the Financial Accounting Foundation roundtable was to provide feedback to FAF regarding how to establish an organizational framework that would provide relief from some of the more burdensome and irrelevant accounting rules for non-public entities. The initiative for addressing unnecessary accounting rules for private companies seems to finally be getting some traction and developing a framework for this process is critical. I was able to advocate for independent community banks as preparers of financial statements, as well as speak to the challenges faced by many of the small businesses who must present financial statements to banks when looking for funding. We will continue to watch for more information on this issue.

Thank you Anne, for being a strong supporter of ICBA and IBANYS!  

IBANYS would like to welcome our two newest Associate Members, Ed & Ed Business Technology, and CEIS Review! Both of these new members offer services vital to today's banking business. We are happy to have them join a growing list of more than sixty Associate Members!

 Ed & Ed Business Technology specializes in in the areas of printer fleet management, document creation and inbound/outbound postage solutions. They serve Central, Southern, and Northern New York, and have their newest office in Albany. Founded in 1977, Ed & Ed now has 35 employees and over 6,000 customers!  

CEIS Review, Inc. is an independently owned consulting firm serving the needs of the commercial and savings bank communities as well as those of other commercial lending institutions. Their services include loan review, loan loss reserve methodology and validation,  portfolio stress testing, portfolio acquisition review, structured finance review, loan policy maintenance, problem loan advisory, real estate inspection services, credit analysis, regulatory relations, credit database formation, and loan and credit seminars. 

Please help IBANYS in welcoming these two great businesses to our growing association!