for the $240 Million-Asset
CSB Bank in Capac, Mich.
IB: Tell us about your marketplace.
Badley: We have a cool blend of communities. Some are heavily farming communities. Most of them have their own unique downtown or town-proper character. But a couple are pushing up against the metro Detroit area. Collectively, we’re positioned where we can have customers and employees from a couple bigger areas (such as the communities of Lapeer and Port Huron). It allows us to absolutely enjoy and appreciate our small-community environment, but there’s just enough opportunity to do some exploring in those larger markets.
IB: Describe your compliance officer role at CSB Bank.
Badley: I am very fortunate to be surrounded by incredible coworkers. We have an atmosphere where anyone who wants to be involved has that opportunity. The committees and groups that we’ve established give everyone a chance to be involved. It’s not uncommon for a first-year teller to be collaborating with our president on strategic decisions. If a commercial lender indicates an interest in understanding ALCO decisions, he or she is most likely going to get the chance to participate. It is a great two-way avenue where ideas can be shared and everyone benefits.
So to answer the question about my role and duties, I have had the opportunity over the past couple years to be involved in compliance regulations, Bank Secrecy Act, security committee, information technology and many other areas. It is so valuable as a compliance officer to be able to understand processes throughout the bank.
As for current projects, unfortunately, that is usually whatever the Consumer Financial Protection Bureau dictates. We’re still making sure we have all the bases covered with Ability to Repay and Qualified Mortgages, wrapping up the TRID conversions, and now we can start looking ahead to the HMDA adventure that they’ve created.
IB: What’s CSB Bank’s approach to compliance?
Badley: Very early in my transition from commercial loan officer to compliance officer (which was actually a return to where I started my banking career), we established a system, or matrix, of responsibility for all regulatory areas. We complement that with a compliance committee of all those regulation owners (mostly department managers) who meet at least monthly to discuss compliance issues. All of those folks have a truly genuine appreciation for compliance and devote considerable attention to ensure that the bank is properly addressing all of our regulatory risk areas.
IB: How did your bank weather the TRID mortgage disclosure rule changes?
Badley: It was a group effort. It had to be. We capitalized on the expertise of many different areas of the bank, including lenders and processors, as well as outside experts. We created a TRID committee that met a few times, but mostly we just kept each other informed. We even had our external auditors involved in most of those discussions, and they were very helpful. There were hundreds, maybe thousands, of emails floating back and forth about TRID, and it gave us confidence that if the auditors saw anything disconcerting about what we were doing during the implementation, they would let us know.
IB: You consider the late Stephen Covey, author of The 7 Habits of Highly Effective People, a mentor. Why?
Badley: I really respect the process by which he gathered and assembled such a wealth of personal leadership ideas, and then presented them in an organized and practical manner, all while continuing to humbly admit that these are not his ideas, but timeless principles. He also then did an excellent job of contrasting those lasting principles with temporary, quick-fix techniques.
IB: What’s Covey’s best advice for you?
Badley: His advice really helped me to increase my personal confidence and focus. The best advice is about how everything is on a continuum. You’re not going to be perfect in your physical, mental, social/emotional or spiritual dimensions, but by remaining alert to your choices and options you will always have the ability to move in the proper direction toward maturity in any of those areas.
IB: What’s a recent success you’ve had?
Badley: I’m not sure if this is my biggest success of the year, but my favorite experience for 2015 was attending the ICBA Leadership Conference in Indianapolis. That city is amazing, the folks at the JW Marriott treated us like royalty, and the conference sessions were wonderful. I did a lot of research and contemplation prior to attending so that I could have high expectations of leadership education. I feel like I came back with enough information and advice to last for decades of personal improvement, as well as much that I can share with my coworkers.
IB: If you were regulation czar for a day, what you would you do?
Badley: I would create completely separate processes for determining regulatory controls for large banks and community banks. I can understand how the focus can drift away from the customer’s best interest in the large banks, but that simply is not an option at community banks. You would not survive, or at the very least you would not be able to walk through your community with much dignity.
The community banks absolutely do not need the policing that large banks require. They should still be monitored, and advice given, for safety and soundness issues, but there are no regulations, existing or forthcoming, that are protecting customers from community banks. It is not necessary.
I would demand an immediate common-sense blitz on all of the regulations to determine the concrete, useful purpose for them from the consumer’s perspective. For instance, if 95 percent of consumers don’t care about certain disclosures, then those can be eliminated. For the 5 percent who want that information, their bank can provide it or they can find one that will.
Currently, it seems to me that the regulatory process includes considerable research initially into what consumers need from a protection aspect. But then the process seems to enter some other dimension where thousands of pages of regulation are written to ensure that every possible loophole is addressed. You end up with a product, in this case regulation, that is incredibly complex and so cost-ineffective. There needs to be some common sense on the back end, where those creating the regulations take a step back and ask themselves what they’ve created. The current comment period just becomes a battle between special interest groups, not really a practical evaluation.
IB: How did you become a community banker?
Badley: A prior co-business lender at a larger bank had suggested that I come out here to look at a lender position that CSB Bank had open in the commercial lending department. I was absolutely hooked when the first day I visited I was able to have lunch collectively with the CEO, the president and the chief financial officer.
IB: What do you like about being a community banker?
Badley: The ability to be heard and influence decisions. The ability to truly help customers, for their sake, not always just for the bottom line. The recognition that shareholders, employees, customers and community members are equally important in everything we do.