Bank executives and board members are growing more concerned about regulatory risk as banking agencies introduce an expanding list of new and proposed regulations, according to a new survey by Bank Director and the public accounting firm Moss Adams. More than three-quarters of survey respondents said they are more concerned about regulatory risk, compared with 66% who said the same last year. Additionally, 39% cite evolving regulatory compliance requirements as a strategic challenge, up from 28% last year.
Forty percent of respondents say they’ve adjusted their bank’s fee structure in anticipation of regulatory pressure from the CFPB and Biden administration, up from 32% who said as much a year ago, according to Bank Director. Another 10% have adjusted fees in response to direct regulatory pressure. At the same time, nearly half of respondents said they believe that recent changes in Community Reinvestment Act implementation will make compliance slightly harder for their bank. Eleven percent say that compliance will be significantly harder, while 35% believe the changes will have no effect.
Still, despite regulatory pressures, nearly two-thirds of respondents cited deposit pricing as their bank’s top strategic challenge, according to the survey. The percentage of respondents who reported higher concerns around liquidity risk increased to 76% from 71% last year. When asked about liquidity management strategies, 59% say their bank would borrow funds from a Federal Home Loan Bank this year, while 49% would raise interest rates offered on deposits.
