“The problem for Tourre—and Wall Street—is that they're so intent on proving that what they did was legal that they can't see that what they did was wrong.”
“With Financial Reform for Wall Street, Fair is Fair,” Washington Post (05/02/10)
The quote above perfectly captures why ICBA is fighting so hard for community banks in this generational fight over financial reform. ICBA is fighting for what is RIGHT.
While others fight to protect their turf or to keep their special privileges (such as too-big-to-fail), ICBA fights for basic fairness
for community banks as Ezra Klein puts so well in his May 2 column. And we fight for Main Street customers nationwide.
The financial services system in this country lost its way over the past 30 years. Real people got hurt. Community banks got hurt. The system became tilted against Main Street community banks in favor of Wall Street size and privilege. The Washington Post
article captures in a nutshell what we are fighting for—FAIRNESS
in our financial services system. Yet, we are being relentlessly attacked and misrepresented for our stand. BUT WE WON'T BE COWED
. We will continue to fight for basic balance and fairness for community banks and their rightful place in the financial services system.
Community banks ARE
important; community banks DO
count! Community banks are good stewards of their depositors’ money and do their best to serve the needs of their customers, because they live, work and worship in those same communities.
So please read this article, ladies and gentlemen,
and come to understand where ICBA and those we represent are coming from. We don't come from Wall Street. We don't represent Wall Street. We don’t take a dime in dues from Wall Street mega firms. We represent those men and women and their banks that serve local markets, small towns and cities and the rural areas of this nation. And we don't advocate or stand for something simply because it is legal—we fight for basic principles of fairness, access and equal voice because it is right!
I am so very proud of our thousands of community bank members nationwide and how they have endured not only this crisis, but the inequities of the past 30 years.
Is that a light at the end of the tunnel?
The light you see at the end of the tunnel may or may not be a train. We will know shortly.
Last evening Sen. Richard Shelby (R-Ala.) began circulating a draft alternative proposal to S. 3217, the financial-reform bill introduced by Sen. Christopher Dodd (D-Conn.) earlier this spring. The draft alternative is not in legislative language but rather a title-by-title narrative of Sen. Shelby’s (and presumably other Republicans’) vision of financial reform.
Sen. Shelby’s draft alternative introduces some good ideas and concepts dealing with resolution authority, small-business exemptions from Sarbanes-Oxley and transparency that—if included in a final bill—ICBA could support in any financial-reform legislation. The draft alternative also raises some concerns about Federal Reserve independence and the overarching power of the Treasury secretary.
More importantly, however, Sen. Shelby’s draft proposal could signal progress in negotiations between Sens. Shelby and Dodd. The fact that concrete alternatives are being discussed is a good sign. ICBA encourages Sens. Dodd and Shelby to continue their negotiations to a successful conclusion so that the Senate might act on much-needed Wall Street reform.
Bailouts, big lies and moral bankruptcy
Evidently we’re not the only ones who are growing dizzy from all the spinning Wall Street is doing as it desperately tries to trick the American public into killing a reg reform bill that would finally rein in the Wall Street mega firms.
This is must reading for anyone who seeks the truth. The Truth is Out There.
Wall Street banks and the big lie
By Mark Mellman - 04/20/10 07:43 PM ET – The Hill.com
Singing Out of the Wall Street Hymnal
Just 20 banks of 8,000 now control over three quarters of our nation's assets and over 60 percent of its deposits. Community banks are at a 0.40 to 0.60 basis-point disadvantage to their mega bank brothers when it comes to the costs of regulatory compliance—and community bankers scratch their heads and wonder how all of this happened.
Well, look no further than Wall Street and its army of Washington, D.C. lobbyists and trade groups. Sadly, many community banks blindly follow the "we must all speak as an industry” siren song written by the best public relations people Wall Street can buy.
And when the song has been sung to Wall Street’s satisfaction and this regulatory reform bill is finished, community banks will again find themselves on the short end of the stick, laboring under staggering regulatory burdens, scrounging for capital, struggling with narrowing margins and facing more bailouts of Wall Street titans. And all the while, the “shadow” banking industry will skate, and Wall Street will add however many hundreds of staff are needed to comply with new regulatory burdens imposed by the existing agencies. They will continue to pay themselves ever greater bonuses based on their burgeoning profits, while community banks are assessed higher and higher premiums to pay for Wall Street’s sins.
Such is the world as it is and as it will be without financial reform of Wall Street. I hope that those community banks that are singing out of the Wall Street hymnal stop in time to save themselves.
At ICBA, we represent Main Street, not Wall Street and we want a bill to stop the reckless practices of Wall Street that got us into this mess from ever happening again.
The Status Quo—Great for Wall Street, Fatal to Main Street
Today two forces are facing off over financial reform—those who want real reform of Wall Street's greed and damaging practices and those who want to keep the status quo.
Community bankers want real reform because the status quo has allowed only five institutions to control more than half of the nation's deposits.
The status quo brought us skyrocketing and special FDIC assessments, dumped commercial real estate and the GSE preferred stock debacle.
The status quo has meant massive and unprecedented government support for Wall Street mega firms. And on Main Street, where a fraction of that largesse could have saved hundreds of community banks, the status quo has brought us nothing but pain and regulatory enforcement orders—even though the vast majority of community banks are well-managed institutions.
Now Wall Street and their allies in Washington are trying to manipulate community bankers into going against their best self-interests by opposing the only legislation that will put an end to Wall Street’s outrageous advantages.
Community bankers cannot afford to stand by silently. If no financial reform bill passes, community bankers will continue to see their franchise values erode, Wall Street’s profits rise and the mega firms get even bigger and more bulletproof. Upholding the status quo guarantees that Wall Street will only consume what’s left of Main Street when the next financial crisis comes.
Don't let that happen. Fight for equal treatment. Fight to end the too-big-to-fail policies that created the crisis.
We must have financial reform, and we must have it now. Tell your member of Congress.
The Voices of Main Street
“Only connect,” the novelist E.M. Forster urged people, almost a century ago. And nowhere are connections more important than here in Washington. Thanks to social media sites like Facebook and Twitter, thousands of people can gather online in a matter of minutes to voice their opinions. It’s democracy 24/7 and Congress and the administration are listening.
For the past two years, ICBA and our member community banks have been a powerful force in the discussions about regulatory reform, but we now can become even stronger if we can engage our customers as advocates on those issues that affect the well-being of all of us on Main Street.
Earlier this week we launched the “My Community, My Bank” Facebook fan page. It’s the next phase of our campaign to educate policymakers and the public about the negative consequences associated with too-big-to-fail and the need to rein in the Wall Street mega firms that wreaked financial havoc.
The whole ripple effect is remarkable. In just a few days, we’ve gained nearly 600 fans.
If you haven't already, I’m hoping you will spread the word to your customers, neighbors and friends. The voices of Main Street, theirs and ours, are too strong to silence and too important to ignore.
To view our Facebook fan page, visit
The Elephant in the Room
“When elephants stampede; it is the grass that gets trampled.”
Think of the elephants as the mega Wall Street financial firms. Think of the grass as the nation’s Main Street community banks.
One of several debates raging in Washington between Main Street and Wall Street involves the "prefunding" of a reserve by “too-big-to-fail” firms (sometimes called systemically dangerous firms) to be used to resolve their own failures the next time our nation experiences a financial meltdown.
The prefunded resolution reserve fund is sometimes referred to by Washington pundits as the “pre-arranged funeral plan.” The idea is that those Wall Street mega firms that have been identified as systemically dangerous would pay into a fund dedicated to resolving and unwinding those firms should they become financially insolvent, thus sparing the taxpayers and community banks from having to bail out these mega firms after they are already dead—as we have all just experienced. It is ICBA’s position that managers and investors at the mega firms who made terrible decisions or got too greedy should not profit and be propped up by the taxpayers and the Main Street community banks of this nation ever again. In the future, when these Wall Street Cyclopes fail they should be forced to use their own money to resolve their failures.
Wall Street and the financial trade groups that represent them in Washington argue that if a prefunded reserve is set up, it will “out” these firms and identify them as being “too big to fail” thus institutionalizing a “too-big-to-fail” policy. Wall Street’s solution is that systemically risky firms should be required to “post-fund” a resolution reserve to take care of mega financial firm failures. In other words, the systemically dangerous firms would be required to post the money after they become insolvent.
ICBA argues that creating a resolution fund after the mega bank has already failed is like purchasing life insurance for someone who is already dead! Who pays for the life insurance policy if the insured is already dead before the policy is purchased? I think we all know who will pay.
Gertrude Stein famously said, "A rose is a rose is a rose." And Shakespeare said, “That which we call a rose by any other name would smell as sweet." (Only I can assure you that these mega financial failures don’t smell like roses to the taxpayers and community banks.) At ICBA we believe that the failure of a $2.5 trillion bank will not smell nearly as bad if the money to resolve the failure comes from the failed bank itself rather than picking the pockets of the taxpayers and community banks. We all know who the elephants are. So, let’s stop pretending that there are no elephants in the room.
Cam Fine Convention Speech 2010
A Central Bank With No Center? A Lesson From the Falcon and the Falconer
A central bank without a central role in the American banking and financial sector? Crazy, right? Absurd, you say? Not so fast—it could easily happen.
The U.S. Senate is proposing just such a plan. If the Senate proposal for financial reform is enacted without changes, one key feature will be that the central bank of the United States, otherwise known as the Federal Reserve, will be stripped of its supervisory authority over all financial institutions of less than $50 billion.
What? Can it be that our policymakers would blind our central bank to the thousands of financial institutions on Main Street America? Are we to have a central bank with no "center"? Will the central bank become misshapen by its sole focus on Wall Street? Can the central bank's "center" hold or will it fall apart like the center in William Butler Yeats’ famous poem "The Second Coming,"
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The Federal Reserve is our financial system's falconer, and the district banks, collectively, are the falcon—ever watchful, circling the regions of this nation. If the Federal Reserve is truncated in its mission and the district banks lose their ability to look into nearly 8,000 Main Streets across America, can the financial center truly hold? Or will “things fall apart" and, with apologies to Mr. Yeats, mere financial anarchy be loosed upon the United States as the falcon circles further and further from the center, unable to hear the falconer? And as the pull from Wall Street distorts the center, the falconer will no longer hear the falcon, and what is a unique financial balance between Main Street and Wall Street will be lost.