A comprehensive study of Alabama’s banking industry released by faculty in Auburn University’s Raymond J. Harbert College of Business reveals that state banks issued $14 billion in small business loans by the end of the third quarter of 2015 and consider regulatory uncertainty and cyberattacks as being among the chief threats to their business model.
The report, “Alabama Banking: The State of the State’s Banking Industry,” examines the condition and performance of the state’s banks through the third quarter of 2015 and also incorporates data from 2000 to 2015. The study, co-authored by finance professors James Barth, Jitka Hilliard and John Jahera and doctoral student Yanfei Sun, also outlines policy suggestions aimed at helping state banks better serve their customers. Among the study’s findings:
Seventy-three percent of bankers reported that their primary competitive threat comes from “non-bank” financial firms, which are subject to fewer regulations, while 70 percent of respondents view vulnerability to cyberattacks as a “serious concern.”
The researchers suggested an overall easing of regulations to enable banks to serve “underbanked or non-banked” consumers through short-term loans at lower rates than those offered by payday lenders. They also proposed that the “harmful effects” of the Dodd-Frank Wall Street Reform and Consumer Protection Act be examined in view of the fact that recent regulations have increased costs for banks but not revenues. The researchers also called for the state Department of Banking to explore options to ease regulatory burden and associated costs for state-chartered banks.
Do you like this story? The Plainsman doesn't accept money from tuition or student fees, and we don't charge a subscription fee. But you can donate to support The Plainsman.
