Hackers, federal regulations and customers who expect the best in technological conveniences pose challenges to the banking industry, especially smaller institutions, speakers at the Independent Bankers Association of Texas said during a conference Thursday at the Baylor Club.

About 150 local bankers and business leaders attended the session, part of the association’s “Tour de Texas” series of presentations.

A bill making its way through the U.S. Senate offers hope to lenders who face red tape and mountains of paperwork when processing mortgage loans, association President and CEO Christopher Williston said.

“We hope it arrives on the president’s desk by Memorial Day,” Williston said.

He said he remains optimistic it will become law because it enjoys bipartisan support and aligns with President Donald Trump’s goal of slashing government regulations.

Several bankers attending the meeting said during interviews that regulations that arose after the 2008 financial crisis, which was fueled by a virtual collapse of the mortgage industry, were meant to create transparency and consumer protection. Instead, the regulations complicated the mortgage lending process, causing some smaller banks to quit writing mortgage loans, the bankers said.

“The Dodd-Frank Act took a lot of smaller community banks out,” Williston said. “Some people don’t qualify for the traditional 30-year fixed-rate mortgage, but the act did not allow for the flexibility independent bankers need to serve their customers. What about the farmer who pays once a year, when he sells his crops, or what about balloon payments?”

Rodney Kroll, president and chairman of Texas First State Bank, said red tape has caused him to quadruple his “paperwork staff” over five years.

Kurt Purdom, representing the Texas Department of Banking, cited a poll showing 43 percent of millennials would consider banking with Amazon, Google or Facebook, if they were to offer such a service.

“They want a frictionless relationship with their banker, and they are comfortable with these entities and their services,” Purdom said.

Banks must not become complacent in their pursuit of customers and need to pursue technological advances convenient to young people, he said.

“I have grandsons in their 20s. They want convenience and speed in their banking, but they don’t want to pay anything for it,” said Willard Still, an executive with American Bank of Waco. “Bankers have to adapt and spend money on technology to keep pace with the marketplace.”

More than one speaker suggested bankers use their corporate tax cuts, from 35 to 21 percent, to strengthen their protection against cyber attacks.

Purdom said independent banks may reach a baseline of safety to satisfy the requirements of regulators, “but they are not evolving, not rolling these safeguards into the functioning of the bank.”

He said steps should be taken to include employees, vendors, even members of the bank board, in the process of ensuring account safety.

Speakers urged customers to regularly check their bank statements for suspicious activity and to subscribe to text alerts that could deter fraud.

“International crime syndicates have become a significant problem,” Kroll said. “And skimmers can steal information from a card used at, say, a convenience store, and begin making purchases by that afternoon.”

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