Improving Relationships With Your Regulator – A Mutual Examination Guide

Article by John E. Bowman and Tom Barnes, Director at The Cooperative Bank in Roslindale, MA

Introduction

Mutual banks are the quintessential community banks. Community service at every level of the bank is a hallmark of being a mutual. The inability to raise capital except through retained earnings is counter-balanced by the independence and longer-term vision that you are able to take. During the writing of this paper we asked a number of CEOs if mutuality was a strategy or an ownership choice. The answers were pretty evenly split. Some thought mutuality is embedded in every strategic decision that is made, because raising capital from external sources is not an option.

Others believe mutuality was an ownership decision made 75 or 100 years ago that shaped their roots but not their current operations strategy. Regardless of the difference, all believe that factors fundamental to mutual banks should be reflected in examination conclusions. In order for that to