Special Questions

Special Questions

NOTE: 70 responses.

• Hopefully the Fed doesn't give access to the Fed window to nonbanks. Also, I hope the Fed doesn't allow fintechs to pay interest.
• We are concerned with how it impacts the money supply in ways outside of the Federal Reserve’s control and the implications for inflation. We are also concerned about the payment system shifting outside of a regulated environment, creating a competitive differentiation.
• We have designated a senior officer to develop a statement regarding our position on digital assets, crypto, etc. We see this as alternately a huge threat or great opportunity for the community bank space. However, we are concerned that the big banks are already poised to participate and that community banks may be left behind as a result of ignorance, reluctance or inability to adapt quickly.
• Primary concern is moving deposits away from the community banking sector, removing our ability to serve our customer base with loans. Secondly, the lack of regulatory oversight related to stablecoin. The community banking sector cannot compete with Big Tech.
• We think the passing of the Genius Act will eventually prove to be challenging for community banks [that lack] the appropriate technology and/or understanding . We are really focusing on understanding what that passing will ultimately mean for community banks in order to come up with a plan to prepare.
• We don't know enough about them. Attempting to gain more knowledge about them.
• The worry with stablecoin is the disintermediation of the banking system, the potential loss of liquidity to fund loans and the bad actors that will enter the banking space through this loophole. We are looking at our options and trying to evaluate a real business purpose for it. Besides cross-border remittances and the use of blockchain technology, very little case is made for stablecoin.
• While stablecoin is an important new technology that we are excited about, the approach has been concerning where seemingly nonbanks outside of regulatory oversight have been given a competitive advantage. Banks are positioned to leverage blockchain and administer the new rails with tokenized deposits while following all the safe and sound procedures we do today with any other payment rail. However, due to clarity issues and lack of state coordination/alignment, a result has been banks being held back while nonbanks move forward in manners that will introduce near-term risk. We have been at the forefront for the past several years to ready ourselves for the changing industry. We have been working closely with our regulators, key partners and associations. We have completed several proofs of concepts using the technology and have several solutions maturing.

NOTE: 8 responses.

NOTES: 70 responses.

NOTES: 61 responses. This question was most recently posed in May '25.

NOTE: 69 responses.

NOTE: 68 responses.

NOTE: 66 responses.

Special Questions Comments

Survey participants are given the opportunity to submit comments. Some comments have been edited for grammar and clarity.

• I think they will reduce [the federal funds target rate] by 0.25, but inflationary pressures will keep federal funds elevated.
• [Our outlook concerns include] net interest margin due to [high] certificate of deposit rates and declining rates to compete for loans, which will squeeze our margins; financial and economic uncertainty due to the current administration, changes within Federal Reserve leadership, tariffs, etc.; and health insurance, which is a big issue right now for our bank and could lead to difficulty in hiring or retaining employees if we cannot find a solution quickly to this problem. 
• The only concerns within our current portfolio are our CRE loan portfolio—specifically, construction and land development—as we have seen a lot of requests in this area recently.
• The lack of margin between the federal funds rate and the 10-year U.S. Treasury rate continues to be an issue. There seems to be room to lower short-term rates without significantly affecting the five- to 10-year maturities.