Protecting elderly, serving veterans are top issues for new bank association chairman

by Talk Business & Politics staff ([email protected]) 1,223 views 

Brad Chambless, CEO of Farmers & Merchants Bank, outlined his priorities for his role as the new chairman of the Arkansas Bankers Association.

Chambless appeared on this week’s edition of Talk Business & Politics with Arkansas Bank Commissioner Susannah Marshall. He said his goals for his one-year term is three-fold.

“Number one, elder exploitation from the financial sector. It’s very prevalent right now. I think there’s a couple of reasons for that. Coming out of the pandemic, bad actors start to show up and then technology kind of blows that up too with social media and different things from the bad actor side. The other passion that I have, and I want to make sure we put more focus on at the association level, is taking care of our active service members and veterans,” Chambless said.

“Finally, and kind of overarching, making sure that the association and my leadership reaches out and embraces every bank in Arkansas so that they all receive the same services and products equally across any sector of any county that we have in our great state,” he added.

Marshall, who was reappointed to her state regulatory post by Gov. Sarah Sanders, assessed the health of the Arkansas banking sector in the current high interest rate environment. She said banks across the state are generally very healthy, despite the challenges of the last year.

“We’re starting 2024 in good shape. We have $168 billion of assets in Arkansas’ 80 banks,” she said. “2023 across the industry was a little challenging… This interest rate environment is still a challenge for them to manage effectively. Of course, you always have cybersecurity risks.”

“Every quarter, almost without fail, Arkansas banks beat the national average in profitability metrics and asset quality metrics and capital metrics. And so I’m very positive that we’ll continue that momentum during the year. One of the things that makes it so important for our institutions is that they are really conservative bankers. By and large, they stick to that traditional business model.”

“We don’t believe that the interest rates are going to change that much in the near term,” Chamblesss said. “We think it’s going to stay higher and elevated for longer. But I think all banks in the state are poised to take advantage and thrive in that environment. We’re all a little bit different. We all have a slightly different business model, but I would say that the conservative nature of Arkansas banks as an industry has really put us in a position to, to be perfectly fine in the near term until rates do start to fall.”

Pivoting back to elder abuse, Chambless and Marshall were complimentary of the Arkansas legislature for passing laws to help banks prevent exploitation of older customers.

“Historically, we were pretty much handcuffed. We were limited in how we could move forward under privacy and confidentiality laws,” Chambless said. “I would applaud the Arkansas legislature. In 2021, they passed a statute that gave banks one weapon, which on our frontline bankers – they know their customers, we’re in small banks, we’re community bank driven. In Arkansas, we know our customers. So if they start behaving differently, if the patterns and transactions look different, if checks start coming out of sequence, that is not normal. They recognize that. And the legislature passed a statute that allowed us, if we have reasonable belief that something is not right, we can slow that transaction process down.

“We were part of the working group when that legislation was drafted,” said Marshall. “We appreciate that effort because we are seeing it from the consumers who call in to complain, banks reporting to us that this fraud against all parties, but especially the elderly or those that are vulnerable. It is on the rise. And as Brad said it perfectly, technology is a wonderful tool. It’s what we want and need in financial services, but it brings a lot with it, a lot of risk.”

You can watch their full interview in the video below.