Group re-forms to help community banks manage risk
Wednesday, July 10, 2013 11:13 AM
By Kent Darr
The Central Iowa chapter of the Risk Management Association (RMA) has been revived after going dormant in 2007, when the financial crisis was kicking in and lenders had their hands full with a rash of loan delinquencies and defaults.
With low interest rates making it difficult for community banks to turn a profit, a group of financial institutions -- six banks, John Deere Financial. and NCMIC Group Inc. -- decided the time was right for resurrect a local RMA chapter to provide access to the training and resources necessary to help lenders adequately manage risk.
"The focus for most banks and lending institutions certainly since 2010 has understandably been sales growth and a myriad of compliance matters. We believe there is a need for core skills training in credit underwriting, loan documentation, operations management, and overall risk management ... that many financial institutions cannot independently provide," Brian Hillebrand, Greater Des Moines market president for American Trust & Savings Bank and an officer in the Central Iowa RMA chapter, said in an email.
RMA is a 99-year-old nonprofit organization. Its original name was Robert Morris Association, named after a signer of the Declaration of Independence and the chief financier of the Revolutionary War. Morris helped establish the American banking system.
Since the financial collapse in 2008, community banks have fallen under increased regulatory scrutiny at a time when they also are hard pressed to increase profit margins because of low interest rates, weak loan demand and rigid underwriting standards.
Iowa Bankers Association President and CEO John Sorensen has cautioned that community banks should exercise caution in seeking riskier sources of non-interest income as a result of the current banking environment.
The organization plans a general membership meeting later this year.
Greg Cole of NCMIC is president of the Central Iowa RMA. Other board members are Stan Hilst of Federal Home Loan Bank of Des Moines, Hillebrand, Jody Mead of First American Bank, Troy Thompson of Bankers Trust Co., Lindsay Dea of John Deere Financial, Dick Edwards of U.S. Bank National Association and Brad Boerner of Peoples Trust & Savings Bank.
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