sizes contribute to the sustained and efficient provision of credit and other financial services to consumers and businesses that support the growth and stability of the economy. community banks play a distinctive role in the provision of financial services, offering a wide range of products and serving specific segments. community banks often use a unique “ relationship - based ” approach that, for example, leverages personal knowledge of their customers ’ creditworthiness and local business conditions to customize lending decisions and meet demand for credit and other financial services. this allows both consumers and small 1 / 6 bis central bankers'speeches businesses to contribute to economic activity. community banks also provide important financial services to key – often underserved – sectors of the economy. for example, a study from a few years ago found that almost one out of five u. s. counties has no other physical banking offices except those operated by community banks. 1 as a second example, in the typical county in the second district ( excluding puerto rico and the virgin islands ), community banks account for about half of all banking deposits. it is the ability of smaller institutions to leverage “ soft information ” in important ways and reach underserved sectors that gives community banks a unique and critical role in driving sustainable economic growth. supervisors are also keenly aware of the potential unintended consequences of the supervisory and regulatory framework. one of our goals as supervisors is to ensure that our efforts are not having an adverse effect on the ability of firms to provide credit and financial services that supports economic growth at businesses of all sizes. as i said in an earlier talk, in my view, it is entirely appropriate to continuously evaluate and rigorously debate whether the supervisory and regulatory framework is meeting its objectives efficiently. 2 i ’ ll return to this topic shortly. trends in small bank and small business lending as we evaluate the financial system and the broader economy, we regularly examine firms from a horizontal and aggregate perspective to gain insight on the trends in the provision of financial services in the second district. today, i ’ ll say a few words on trends in small business lending. of course, looking at trends is not sufficient to identify causal relationships, but it does provide one perspective on these developments and identifies areas for future inquiry. the overall level of commercial and industrial ( c & i ) lending at second district firms with under $ 50 billion in total assets has grown steadily in recent years ( chart 1 ). since the financial crisis, these loans have increased by just over 80 percent, which is somewhat faster than growth

unduly burdensome. the full report covers 430 pages, so i ’ d like to highlight three of the recommendations that may be of interest to second district community bankers. they relate to simplifying capital requirements ; reducing regulatory reporting ; and reducing the frequency of examinations for certain qualifying, smaller firms. capital is in many ways the foundation of the health of the banking system. it ’ s important to note that more than 500 banks failed during and after the financial crisis because they lacked sufficient capital, and many of them were community banks. nonetheless, we have consistently heard since then that some of the capital rules are too complex for community banks and not commensurate with their size and risk profile. this link with the risk profile is critical and an important part of our efforts to “ tailor ” our supervisory approaches. as part of the egrpra process, we are continuing to think about ways to simplify the capital rules. the agencies are developing a proposal and are planning to seek industry comments on certain proposed amendments to the capital rules. such amendments could include 4 / 6 bis central bankers'speeches replacing the framework ’ s complex treatment of high volatility commercial real estate exposures, ( 2 ) simplifying the current regulatory capital treatment for mortgage servicing assets and regulatory capital instruments issued by financial institutions ; and ( 3 ) simplifying the current limitations on minority interests in regulatory capital. i should note that, in april 2015, the board approved a final rule that raised the asset threshold of the small bank holding company ( bhc ) policy statement from less than $ 500 million in total consolidated assets to less than $ 1 billion in total consolidated assets and expanded the application of the policy statement to savings and loan holding companies ( slhcs ). after the issuance of the final rule, 89 percent of all bhcs and 81 percent of all savings and loan holding companies were covered by the policy statement and were excluded from certain consolidated capital requirements. a second relevant topic reflects the challenges and burdens for smaller firms to file call reports. in response to industry concerns, the agencies began in 2014 the process to streamline the call report for community banks and subsequently published a series of proposals for comment. the result is that, effective march 31, 2017, call report requirements have been streamlined for community banks. this new call report will reduce the number of report pages from 85 to 61 pages and will remove approximately 40 percent of the data items currently included in the capital schedule. a third