The exterminators are at it again. Another “pundit” is spraying around the latest prediction
on the demise of the community banking industry. This particular exterminator predicts the number of banks in the United States will drop from nearly 8,000 today to less than 2,500 in the next 10 years. Of course, the vast majority of those institutions would be community banks.
Now, some of you might be familiar with one of my nicknames for community banks. To the inexperienced ear, it might sound like an insult. But after decades in this industry, I am proud to call community banks the “cockroaches” of the financial services industry. This isn’t a slur, but a term of endearment.
No matter how hard the banking “experts,” consultants and those hired by special interests dedicated to the demise of community banking try, they will never be able to kill off the nation’s community banks. Community banking is synonymous with the American spirit of independence, self reliance and entrepreneurship. And no person or interest group will ever kill the American spirit. We’re survivors, and we’ll be serving our Main Street communities well after other financial sectors are exterminated.
To paraphrase my fellow Missourian Mark Twain, reports on the death of the community banking industry have—once again—been greatly exaggerated. Community banks will continue filling their crucial role in cities and towns across America, and ICBA won’t quit fighting on their behalf.
How You See the Glass Sets Your Future
Experience has convinced me that Norman Vincent Peal was right! How you think of the future will determine it. If you always see half-empty glasses, that is your future; half-full, likewise. At ICBA we believe in the future of community banks and the community banking industry. And because that is our vision we will work every day to shape it, and we will achieve it. The glass is never half empty at ICBA.
Every organization (and person for that matter) has two choices—whine, moan, damn the present and the future as being hopeless and take whatever is dished out, or plow through the present and take the future head on to shape it to the vision of the world in which you want to live.
“Dandy” Don Meredith got it right. When things were not going well for the team on the field and his fellow commentators began to make excuses, he would say “if ‘ifs’ and ‘buts’ were candy and nuts, oh what a party we’d have.” We can whine or we can do something about it.
Rather than moan about the past, whining about the “ifs” and “buts” and what “could’ve been,” ICBA chooses to focus on making a better future for our community banks. ICBA chooses to engage and shape our destiny. We will not wallow in the “ifs” and “buts.” There are plenty of others in Washington that do that. At ICBA we will fight for the future of community banks, not take it as it comes.
Community Bankers Take to the Hill
It’s been a great week in Washington. While there is still a long row to hoe on a number of issues facing community banks, we made great progress this week as community bankers gathered in the nation’s capital for the 2011 ICBA Washington Policy Summit.
Nearly 1,000 members of the community banking industry were in town to discuss the industry’s most pressing issues in meetings with members of Congress and federal banking regulators. Community bankers swarmed Capitol Hill to advocate delaying the debit card interchange rule, implementing regulatory relief for our industry and reining in the Farm Credit System, among other issues.
Not only that, but even community bankers not in Washington had a chance to join the action. With ICBA’s new Virtual Policy Summit, anyone with Internet access could tell their members of Congress to act on these initiatives.
This week marked yet another solid advance by the community banking industry in its ongoing campaign for common-sense regulations.
Drawing Parallels to a Nation at War With Itself
I just got back from an Executive Committee meeting in the great state of New Mexico.
On April 12, 1861, guns in Charleston harbor opened up on Fort Sumter, and 150 years ago the nation was at war with itself. I cannot help but draw the parallel to the deep divisions in our nation today. But for the sophistication of communications and the fact that our population today is so mobile, I fear that our nation would be headed for Civil War today—only this time the divide would be much more complex.
One hundred and fifty years ago our nation had no idea of the horrible carnage that lay ahead. An entire generation of American men was lost, and it took the Southern states 50 years just to regain their 1860 GDP level. One in three Southern men of military age had either been killed or maimed. The “limb”-making business thrived for years after the war ended.
I have thought a lot about the war lately and how Main Street’s community banks are locked in a war with the Wall Street financial services titans for the very soul of this nation’s financial services sector. It will be a long and intense struggle as well. May the community banking sector never give up its independence and its soul to the forces of overconcentration and unbridled reach. May community bankers never allow themselves to be used as pawns in the struggle for this nation’s financial soul. Main Street made this nation the greatest nation on earth with the most enduring values—may we always stay true to that course.
Cramdown: A Bad Idea That Continues to Smolder
Sometimes bad ideas are like grease fires—they can be hard to extinguish for good. In fact, one bad idea that ICBA has repeatedly doused with common sense has flared up yet again.
The state attorneys general have reportedly proposed a settlement with large mortgage servicers that would open a backdoor to mortgage “cramdowns.” Meanwhile, the Senate Judiciary Committee passed legislation that would allow individual bankruptcy courts to effectively place a moratorium on foreclosures until lenders agree to reduce principal balances.
While the public is justifiably upset with the “robo-signing” foreclosure controversy at the large institutions, there is no justification for continuing efforts to impose mortgage cramdown. Haven’t we had enough bad policies that hurt community banks when we should be focused on the misdeeds of those who created the financial crisis? As ICBA has repeatedly told policymakers, arbitrarily requiring lenders to reduce principal and modify terms on mortgage loans would set a terrible precedent, increase interest rates and actually make the foreclosure problem and housing recovery worse.
And we’re not alone in our opposition. In a recent report
, economists from the Federal Reserve banks of Atlanta and Boston wrote that principal-reduction schemes would incentivize all borrowers to seek loan forgiveness, even those who don’t need it. Amen!
Interchange Legislation—A Reason to Dig Deep
The will of the nation’s community bankers to make their voices heard in Congress has never ceased to amaze me. Once again, it is time for community bankers to stand up, fight, scream and be heard on the terribly misguided and dangerous interchange rules that threaten our ability to continue to serve Main Street customers.
Bipartisan legislation is pending in both the House and Senate to delay the draconian Federal Reserve proposed rule on debit card interchange. The legislation also would require federal banking regulators to study the rule’s impact on community banks and their customers. I can tell you without a study that the impact will be severe indeed—and the consumer will be the biggest loser—and I am not talking about a TV reality show—I am talking real life!!
ICBA has fought tooth and nail against debit card interchange price fixing from the moment Sen. Durbin announced his intentions to offer his misguided amendment, and now we have legislation we can get behind to slow this lethal financial virus of a rule. That’s why I am asking every community banker in the nation to rattle your member of Congress’s cage
—House and Senate—to co-sponsor these critical measures. MAKE YOUR VOICE HEARD ON THIS ISSUE! DO NOT WAIT FOR THE OTHER GUY—YOU ARE THE OTHER GUY—DO IT!
With a positive reputation among lawmakers, community bankers are effective advocates. This effort on interchange is as important as any in my memory to ensure that community banks and their customers are not harmed and that our nation’s Main Street communities continue to thrive. Dig deep and leave no doubt in any member of Congress of where we stand.
ICBA Convention Recognizes America’s Financial Foundation
Last week several thousand community bankers met in San Diego at the national convention of the Independent Community Bankers of America. It is always a reminder to me of the honor and privilege it is to represent the interests of these fine people here in Washington, D.C. They never forget who they are or the relationship banking model they follow. They are the financial foundation of our great country, because they lay that foundation, brick by brick, community by community every day. We here at ICBA are proud to say we represent community bankers exclusively.
Community bankers are the men and women of Main Street America. We are the backbone of this nation’s entrepreneurial spirit. We are the engines of change, prosperity and jobs in America. We are the fabric of which the American Dream is made. We are community banks. We are ICBA.
Love is in the Air for Community Banks
I’m not one for schmaltzy dramas. For those of you who don’t know, I’m more likely to take in a movie with scenes from Gettysburg or Omaha Beach. But this past Valentine’s Day, ICBA got downright sentimental with a marketing campaign that allows community bank customers to express why they love their community bank.
ICBA’s “I Love My Community Bank” campaign allows customers and small businesses to share their experiences with their community banks. On the “I Love My Community Bank
” website, consumers can post comments, photos and video testimonials about their community banking experiences. A special Twitter handle (@iLuvMyCB) will highlight the entries.
The nation’s community bankers have earned a sterling reputation for outstanding customer service, smart banking policies and commitment to their communities. At ICBA, we’re just happy to help community bank customers spread the love.
ICBA Convention on Pace for Banner Year
When I was still running my community bank in Missouri, it was always important to me to find a way to get away for a week in March to attend ICBA’s National Convention and Techworld. The annual convention offers community bankers an opportunity to come together for the largest community banking event in the world.
This year, on the heels of a crippling financial crisis, a relentless battle over Wall Street reform and now new regulatory battles, it is more important than ever for community bankers to gather among their own to network, gain perspective and just enjoy the camaraderie of their fellow community bankers. Everyone needs to get away and among “family” from time to time. And ICBA is a family.
The 2011 ICBA National Convention and Techworld
is on pace to break registration records. Scheduled for March 20-24 in San Diego, this year’s convention will again feature top industry speakers, nationally known leaders and valuable educational workshops. The number of registrations to date is a testament to the value of ICBA’s convention and the resilience and spirit of community bankers.
This industry has been through a lot these past few years, and I look forward to seeing as many community bankers as possible in what promises to be a great week in San Diego.
Will you be there? I certainly hope so.
Stop Punishing Main Street Banks and Their Customers
Hey, here’s an idea. Let’s punish the thousands of small community banks that played by the rules and stuck by their customers during the financial crisis by making it impossible for them to issue debit cards to their customers!
The terribly flawed and misguided debit interchange rule proposed by the Federal Reserve to implement the Durbin interchange amendment to the Dodd-Frank Act will do just that. Millions of good Main Street customers of community banks will see their debit transaction costs rise. Or worse, they will not even be able to get a debit card from their local bank if this boneheaded rule, which will line the pockets of the big-box retail stores with billions in profits, is implemented. Write the Federal Reserve and your congressional delegation
and tell them that Main Street community banks and their customers should not have to pay to pump up the profits of the big-box retailers. Make your voice heard—don’t subsidize the profits of the mega-retailers!
If Congress and the Fed thought they could get this harmful interchange plan through without a fight, they should think again.
“Wall Street: Money Never Sleeps,” and Neither Does ICBA
Usually the time I spend on a plane is a way to lose myself in a book, reflect, catch up on work or perhaps enjoy a movie. On a recent trip, the in-flight movie was Wall Street: Money Never Sleeps.
Watching this movie was like reliving the past few years of my life dealing with the financial crisis. I lived through several of those meetings referred to or shown in the movie. I knew those players from Wall Street and the government officials (formerly from Wall Street) portrayed in the movie—and I remember what I was doing during the meetings and who said what.
I am proud to say that ICBA made a strong and positive difference for community banks during the darkest days of the crisis. And I agree with the movie's "Godfather," the now-wrinkled prophet of Wall Street, Gordon Gekko, when he says in a speech to business students that the greed of Wall Street leading up to the crisis was the “greatest transfer of money from Main Street to Wall Street [in the nation's history], and it’s going to happen again.”
Another observation Gekko makes is that “right now it’s ugly times ugly, and that's when the ugly get going.”
We can all learn from the observations of Mr. Gekko. See the movie and learn what really happened and how and who really triggered the worst financial crisis in generations.