Volume 8, Issue 4 The Banker’s Advocate December 31, 2011


Perspective of five decades


Assistant Deputy Bank Commissioner Larry Hillyard has examined Ar- kansas banks in five dec- ades, beginning in January 1973. His almost 39 years at the Bank Department made him the obvious choice to be the respondent in a question-and-answer session focusing on the banking crisis.


A Q&A with Larry Hillyard


Q: Is this the worst


banking “crisis” you have seen for Arkansas banks in your almost 39 years with the Bank Department? A: Yes, this is by far the


worst. The recession of the mid-1980s was bad and we had a lot more problem banks but a majority of those banks were “3” rated.


I am disappointed in –


They were small commu- nity farm banks $50 million or less in eastern Arkansas. Percentage-wise, the per- centages are similar now, but the actual numbers are so much larger. During the 1980s, the largest amount of ORE in any one bank was $2 million. Now, every bank in the state averages


in excess of $3.5 million on the Bank Department’s self -examination, with several banks having more than $20 million. Banks are also faced with declining real estate values, high unem- ployment and an economic climate that is not willing to loan money for fear of making another bad loan. The lack of experience of younger loan officers, who were not lending during the industry’s “crisis” of the 1980s, may be another fac- tor that has caused some


See HILLYARD, Page 2


Conditions limit small business fund The Commissioner’s View


but not surprised by – the final tally of applicants, approved participants and funds disbursed in the De- partment of the Treasury’s Small Business Lending Fund.


The intention of the SBLF is to stimulate lend- ing to small businesses,


thereby promoting job creation and economic growth. Treasury has pro- vided participating bank and thrift holding compa- nies having consolidated assets of less than $10 bil- lion with funds by purchas-


ing Tier 1-qualifying pre- ferred stock or equivalents. Community Develop- ment Loan Funds also were eligible and are participat- ing.


See VIEW, Page 3 Candace Franks Hot Topic


IS examiners to use updated guidance on Web banking


EDITOR’S NOTE: The author, Jeff Cam- eron, is supervisor of the Bank Department’s In- formation Systems ex- amination group and a Certified Information Systems Auditor. In response to the com- pliance date of January 1, 2012, Bank Department Information Systems exam- iners will begin to focus on the core principles of the supplemental guidance on Internet banking authenti- cation.


Risk assessment, cus-


tomer authentication, lay- ered security, and customer awareness and education are the specific elements


See HOT TOPIC, Page 4


Page 1  |  Page 2  |  Page 3  |  Page 4