Five of the area's top banking executives addressed a crowd of nearly 80 financial-services professionals at an April 1 forum sponsored by the Great Smokies chapter of The Risk Management Association. The event was held at the Asheville Area Chamber of Commerce in downtown Asheville.
The panelists painted a bleak picture of the region's economic prospects for the coming months, asserting that new federal regulations meant to tighten oversight of the financial markets will be overly burdensome to community banks and, in the end, cost consumers more.
"Smaller banks don't have the resources and staff available to keep up with all the new paperwork," said HomeTrust Bank President Dana Stonestreet. "That means more banks could close, reducing competition and resulting in more job loss."
Taking pains to distance themselves from the largely unregulated "shadow banks" of Wall Street, these local executives all feared that while community banks weren't responsible for the nation's economic woes, they would ultimately bear the brunt of the reform. "More regulation means higher costs, which means higher fees … and consumers will end up paying for it," predicted Mike Willett, western regional president of BB&T. "Greater regulation will mean more restrictive credit and longer processing times for things like mortgages."
Dave Kozak, executive vice president of Asheville Savings Bank, talked about the "ripple effect" that increased regulation and tighter credit would have on the rest of the economy. He cited Bank of America's recent decision to stop covering debit-card transactions when a customer lacks adequate funds. "All the commerce that banks have facilitated over the years could come to an end," said Kozak. He also maintained that the local real estate market hasn't hit rock bottom yet. Asheville, said Kozak, was "late getting into this thing; we'll be late getting out." His colleagues agreed that our area could expect to see continued deterioration in home values over the next 12 to 16 months.
The news wasn't all bad, however. Willett, who also chairs the Chamber's Executive Committee, stressed that Asheville consistently ranks high on lists of top places to visit or to live, noting, "The things that make Asheville great are still here today."
Robby Russell, community banking market leader at Wachovia/Wells Fargo, and Pat Carver, area executive for First Citizens Bank, also participated in the forum.
For more information on the Risk Management Association's local chapter, contact Anita Silver (225-2021; e-mail: ASilver@bbandt.com).