The chief executive of the largest community bank lobby in the U.S. said the group has "already put the regulatory agencies on notice that they better not exempt" Amazon.com Inc. or other technology firms from any regulations should they get into banking.
Camden Fine, who is preparing to retire this year after leading the Independent Community Bankers of America for 15 years, said in an interview that small banks want to ensure that any new challengers — including giants such as Amazon and start-up financial technology companies — comply with the same rules that make banking among the most heavily regulated industries.
"It is not clear yet exactly what Amazon wants to do," Fine said at the ICBA's annual convention in Las Vegas. "But as long as it — or anyone else — has to compete fairly, that's all we need."
While only a couple of fintechs have flirted with the idea of getting bank charters and the full scope of Amazon's interest in banking remains to be seen, the ICBA is proactively lobbying leaders of top bank regulatory agencies. Amazon, for one, has deep pockets it can use to support its own lobbying, and the ICBA wants to make sure regulators are not swayed into allowing the retail and tech behemoth to skirt certain rules while competing head-to-head with banks, should it jump into the industry.
"So far they are saying all the right things," Fine said of regulators. "But words are cheap. We will see how this develops. We are watching very closely."
Amazon this week introduced for the first time a debit card in Mexico, part of the company's efforts to promote online purchases among shoppers without bank accounts, according to a Reuters report. It also reportedly is looking to offer co-branded credit cards for small-business owners, and it is considering teaming up with a major bank such as JPMorgan Chase & Co. or Capital One Financial Corp. to develop a "hybrid-type checking account."
While details directly from Amazon were scarce, observers say the recently reported plans point to at least a gradual move into the banking space. And that should give small banks reason to brace for even more from Amazon, Morningstar analyst Colin Plunkett said.
Others at the convention noted that community banks have important head starts on other competitors, notably including financial expertise and long-running connections to customers. But they also emphasized that small banks need to act with urgency to develop new products and services to stay abreast of their customers' rapidly evolving use of technology to manage their banking needs, or big banks and tech companies will.
"Complacency is the opposite of innovation," said Scott Heitkamp, president and CEO of ValueBank Texas and the outgoing ICBA chairman.
