Credit problems always develop in an economic downturn. If every bank advanced money only to those borrowers who they felt would remain unscathed through the worst-case scenario, the economy would shrink to levels of 30 years ago.

There’s a tendency in some circles to adopt a tone of condescension in speaking about community banks; the equivalent of the owner of a big dog patting a little dog on the head, saying, “There’s a nice a little dog.

“Excessive compensation” is a close cousin to “obscene profits.” Neither is realistically definable. They are legitimate terms. It just depends which side of the paycheck you’re on.

If you needed any more hints that fair-lending is becoming the new hot topic, the latest “news” that the FFIEC has revised and expanded the Interagency Fair-lending Examination Procedures is one giant clue.

In the closing weeks of July, House Financial Services Committee Chairman Barney Frank tipped his hat to the industry by acknowledging at a press conference that the strength of the banking industry’s opposition to the proposed Consumer Financial Protection Agency, a major component of the Obama Administration’s massive regulatory restructuring plan, had surprised him. He postponed markup of the CFPA legislation until September, in part to allow supporters of the new agency time to counter bankers’ strong objections.

Hundreds of bankers gather in Washington at ABA Leadership Meeting to debate Obama regulatory reform plan

Community bank compliance officers rank Truth in Lending Act compliance, and compliance with the Real Estate Settlement Procedures Act as their top priorities for the next 12 months, according to a survey conducted by Wolters Kluwer Financial Services. Indications are that this in part is because of a renewed push on home lending by 42% of the institutions represented by survey respondents.