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ICBA: Call Reports Increasingly Burdensome

Piles of Paperwork  |  By Laura Alix

Regulatory paperwork is a little bit like water dripping onto a rock: A few drops don’t seem so profound, but let the water keep dripping and 10 years later, that rock looks completely different. Or, if you follow the analogy, your quarterly call report winds up being nearly 80 pages.
That is more or less the point the Independent Community Bankers of America (ICBA) is making in a recent member survey intended to illustrate the burden on community banks in one universal example: The quarterly call report.
“We think of regulatory burden being a specific piece of legislation that Congress passes, but there’s a lot more to regulatory burden, and the call report is a perfect example of that,” said Terry Jorde, senior executive vice president and chief of staff at the ICBA.
Jorde notes that in her own career preceding the ICBA, she was a community banker for more than 32 years, and one of her chief responsibilities was to prepare the bank’s quarterly call report. In the early days of her career, she said, the call report typically averaged about 18 pages. Today, it totals nearly 80 pages, and every new schedule means more man (or woman) hours to prepare.
So when the ICBA put out word to its member banks that it would be conducting this survey, the response was overwhelming. Jorde said the organization received nearly 600 responses within 72 hours and notes that “it was not a short survey to complete.”
According to the ICBA’s survey, more than three-quarters of respondents spent more than $60,000 annually preparing the call report, much of that on personnel salaries for people responsible for preparing it.
A majority of responding banks, 37 percent in each category, said just one or two people were directly responsible for preparing the report, and while the number of employees involved in preparing the call report remained relatively flat at a majority of banks (64 percent) over the past 10 years, most banks said the number of hours required to complete the call report had increased, with the 90th percentile of respondents saying that figure averaged out to about 240 hours annually.
Economies of scale don’t exactly work, either. Banks over $500 million in assets and those under $100 million responded in approximately equal measure that the time and money spent to prepare call reports call reports had increased as regulatory pressures intensified.
And the RC-R schedule for regulatory capital earned the dubious distinction of the most burdensome schedule, with 75 percent of respondents ranking it above all others. RC-C Part 1 and RC-E took second and third place, respectively.

Technology Easing the Burden
But not so fast, say some community bankers. Sure, the call report can be a pain to prepare, but it pales in comparison to the Bank Secrecy Act or Home Mortgage Disclosure Act in terms of regulatory burden.
“I’m kind of surprised that they spent so much effort on the call report, because there are so many other examples of regulatory overreach,” said Julieann M. Thurlow, president and CEO of Reading Co-operative Bank. “Every time there’s a crisis, they do add another schedule, because it’s another byproduct of another failing in the system, but I don’t think I would choose the call report as one of the regulatory burdens I would attack first.”
While it’s true that the regulatory burden is ever increasing, so, too, are the technological capabilities for handling call reporting requirements.
“If you have the software or you take the time to go in and build a template that will each month extract the information you need, it will be a lot easier to prepare on a quarterly basis,” said Glen S. White, chairman and CEO of Mutual Bank in Whitman, Mass.
Further, Thurlow and White both said they rely on the FFIEC’s Uniform Bank Performance Report, into which that data is fed, to measure their own banks’ performance against their peers.
“I like the reports,” White said. “I love looking at them for other banks, and it’s a great way to keep track of the industry.”
Still, White said a short-form call report might provide some welcome relief from the mountains of schedules and paperwork required quarterly of every bank.
That’s what the ICBA has proposed on the heels of this survey: that well-capitalized and highly-rated community banks be allowed to file a short-form call report covering the first and third quarters, alternated with the traditional long-form call report covering the second and fourth quarters.
At this stage, however, that’s simply a proposal, Jorde said.
“Right now it’s a fairly quiet time of year in Washington, so we are in the process of setting up some meetings with regulators to talk with them about our survey findings,” she said. “We do believe the regulators have the ability to make changes in the call report and filing requirements. That’s where we’re going to start first.”■

Laura Alix is a staff writer for The Warren Group, publisher of Banking New York. She may be reached at

Posted on Friday, September 05, 2014 (Archive on Thursday, December 04, 2014)
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