Ongoing bank consolidation and dwindling services are a concern to farmers already dealing with the stress of high production costs and low crop prices.
"Banking continues to consolidate in rural areas," said Ed Reznicek, general manager of the Central Plains Organic Farming Association, based in Bremen, Kan.
"One of two banks in our area in the last year went from being open five days a week to only being open three days a week," he said. "And neither of the banks have in-house loan officers anymore. One of the banks has tightened their loan requirements on automobiles to where they will not even loan money on older vehicles."
Without a full range of financial services, the local community suffers, Reznicek said.
"It really restricts your capability to discuss plans for business development, refinancing or starting new enterprises. Discussing those with a loan officer and exchanging information on financial projections are very important parts of developing those kinds of enterprises. Not having that opportunity is a real loss," he said.
The problem isn't specific to certain types of agriculture or certain areas of the country, but seems to be happening everywhere, he added.
In recent weeks, other agricultural association executives also expressed frustration about how the changing financial landscape is affecting their members.
"Tougher banking regulations are definitely a concern," noted Jordan Shearer, executive director of the Colorado Sorghum Producers and a farmer in northwestern Oklahoma. "The parameters we're dealing with make it very difficult for us to expand our operations."
April has been designated as Community Banking Month by the Independent Community Bankers of America. At month's end, the organization will hold its annual Capitol Summit in Washington D.C., with plans to call on legislators to curb the unfair advantages of too-big-to-fail banks and promote wider recognition of vibrant rural economies as critical to America's prosperity.
Megabanks today are even larger than they were before the financial meltdown of 2008, according to the association. The 12 largest U.S. banks now hold nearly 72 percent of all industry assets, dwarfing the rest of the banking system and presenting what the association calls "massive systemic risk." Banks considered "too big to fail" can afford to take greater risks with more impunity than smaller institutions, the group says.
Up until the mid-term elections, when Democrats took control of the House, hope was running high that banking reform would relieve some of the regulatory burdens on smaller banks. Now the ICBA says the most likely changes will come in the form of loosening financial restrictions on hemp and marijuana-related businesses, such as a cannabis "safe harbor" bill that passed out of the House financial services committee at the end of March.
Jimmy Harrel has owned and operated Bank of Western Oklahoma for around three decades following an early career in ranching and ag education. His support of youth livestock shows, wildlife conservation, higher education and other causes led to his recent induction into the Oklahoma Ag Hall of Fame as its 22nd member.
Bank of Western Oklahoma is headquartered in Elk City and operates six branches. It is the third largest agriculture lender in the Federal Reserve's 10th district, which includes Colorado, Kansas, Oklahoma and four other states.
Harrel grew up learning the value of saving money from his dad, who told him it didn't matter how loud opportunity knocked if you didn't have five bucks in your pocket to answer it. He started buying local banks during the farm crisis of the 1980s, and ag lending has been a cornerstone of his business enterprises ever since.
Over-regulation is the single biggest threat to rural banks, he said.
"Some bankers even back when I was young, and even before I had a bank, you saw them getting out because of the regulation, and there wasn't any regulation then compared to what there is now," he said. "The cost of it is tremendous — you have to hire additional people to do those things, most of which are not important.
"The ones that are important I'm for doing, but most of them are not. That has added cost to everything and everybody."
Regulations on banks increased dramatically after the mortgage crisis of 2008. Some observers have criticized the erosion of the Glass-Steagall Act, which once differentiated community banks from investment banks.
The Volcker Rule of 2014 was intended to restore that distinction by exempting "non-systemically important financial institutions" from onerous oversight, but some think the bar for exclusion was set too low.
To observers like Reznicek, it doesn't seem fair to subject Main Street banks to the same requirements as Wall Street banks.
"I don't think our local banks were borrowing money to make these risky investments to begin with, which is where the big banks got in trouble," he said. "The more meat-and-potatoes local community lending should be allowed to continue."
Regulators went too far trying to correct one problem and created another, according to Harrel.
"Dodd-Frank was a disaster for banking," he said, referencing sweeping legislation passed in 2010. "Once you make a mistake, you can't undo it in one fell swoop. I don't know whether they (in Washington) were smart enough to figure out how to fix it or not, but that's a concern I have."
Tight restrictions have discouraged many banks away from mortgage lending, Harrel said, although Bank of Western Oklahoma still offers it.
He added that successful rural banks have long been a target of bigger banks, which don't always understand agriculture or put a priority on it.
"Over the years I could have sold for a real high price. It was especially rampant back in the 90s and early 2000s," he said. "But we weren't in the business to sell the bank, we were in the business to grow it."
Harrel owns the bank with his daughter, and about a dozen family members are also involved. When a bank examiner recently asked Harrel how much experience the bank had with agriculture, he told them his loan officers had somewhere around 500 years of combined experience in the field.
But family owned and operated banks like his are increasingly rare. A lot of people remain unaware of the struggles rural banks are facing, Harrel said, but he is hopeful that President Donald Trump can reverse the trend, even if further banking reform will be difficult to accomplish under a divided Congress.
"It will be harder to do, it will," he said. "But at least it will be impossible to add any more to it with Trump's veto power."