Bearing the burden.(regulatory compliance)

Being in compliance has gotten very expensive.

Some 84 percent of community banks say that meeting government regulations is the activity that has accounted for the biggest increase in time and manpower costs in recent years, according to Grant Thornton's Twelfth Annual Survey of Community Bank Executives.

Approximately 83 percent of the 442 survey respondents saw an increase in their costs for general audit fees, 67 percent paid more for documentation of internal controls, and 63 percent experienced a hike in liability insurance costs for their directors and officers. These and other increased costs added to price hikes that banks had seen the year before.

And only 18 percent of respondents feel that the laws and regulations currently in place, such as the Bank Secrecy Act and USA Patriot Act, are effective in fighting terrorism, according to the survey.

In our cover story, page 36, seven ACB regulatory experts offer a look at ongoing regulatory relief efforts, and explain how these efforts affect community banks. Many banks feel they are drowning in a sea of regulations, and small community banks bear a disproportionate amount of the burden. Community Banker asks the question: Is there land in sight?

Also in our pages, "Keeping It Clean," page 46, examines how banks ...