“We have never faced a more difficult season for the banking industry than today.” Those attending the recently concluded American Bankers Association’s Government Relations Summit were greeted with these words on arrival. More than 850 bankers from around the nation gathered in Washington, DC for the 2009 Summit, which is more than two and a half times greater than the number that attended last year. The significant increase in the attendance underscores the heightened concern about the present economy and the policy environment. It represents the greatest number of bankers to ever come together in our nation’s capital for such an occasion. Arkansas Bank Commissioner Candace Franks, ABA President & CEO Ken Hammonds, and fellow bankers Reynie Rutledge, Charlie Blanchard, and Scott Grigsby represented our state along with me. It is indeed a “season” for the ages.
The greatest challenges in this “season” are more likely to be associated with new rules designed to address perceived problems with the game of banking than with battling asset quality and liquidity issues in our home ballparks. Potential legislation designed to “fix” the economy and regulatory responses to industry issues were the focus of the participants at the Government Relations Summit. We heard comments from House Financial Services Committee Chairman Barney Frank, FDIC Chairperson Sheila Bair, Comptroller of the Currency John Dugan, White House National Economic Council Director Larry Summers, Senate Minority Whip John Kyl and others about the current financial state of affairs. In turn, all bankers present visited their respective delegations on Capitol Hill to deliver our collective ideas on proposed legislation and to state our central message that traditional banking is the key to economic recovery and growth. For the most part our Arkansas Senators and Congressmen were receptive to our positions.
Pending legislation deemed of paramount importance in today’s debate includes the Depositor Protection Act of 2009 addressing the FDIC’s borrowing authority and its impact on a planned special premium assessment and the Federal Accounting Oversight Board Act pertaining to fair value accounting standards and their mark-to-market requirements, both supported by our bankers. Proposed legislation to which we are opposed includes the Helping Families Save Their Home Act with a provision supporting mortgage cram down in bankruptcy cases, reintroduction of the Credit Card Fair Fee Act with its adverse position on interchange fees, the Consumer Overdraft Protection Fair Practices Act calling for fee limitations along with return and declination requirements imposing operational challenges, and a possible bill designed to eliminate the statutory cap on business lending by credit unions. In addition there is the Employee Free Choice Act that would change the method for union organization, to which we stand in opposition.
In reviewing these legislative proposals and their possible impact on the business of banking I remember one of those famous Yogi Berra quotes, “the other teams could make trouble for us if they win.” As you shake your head about most of Yogi’s quips, you cannot argue his point about the trouble making potential of the “other teams.” It is crucial for us to stay in regular contact with our Congressmen and Senators on these matters. While sometimes it is ill advised to argue “balls and strikes,” it is the time to kick up a little dirt and make your opinions known.
Legislators and regulators are a bit like umpires on the baseball diamond. From a ball player’s angle former Cincinnati relief pitcher and author Jim Brosnan once said, “Umpires are most vigorous when defending their miscalls.” In this current economic atmosphere all parties to the game are being blamed for the troubles being experienced. Just as we Main Street, Arkansas bankers are defending the fact that we were not contributors to the mess we all share, one can expect the rules makers and the rules enforcers to defend their actions or inactions. Being players on the field, we must guard against an over reaction in pursuit of rules necessary to govern the game that could restrict our ability to deliver excellent services and products to the fans, or consumers. From this perspective I can hear former major league player and manager Leo Durocher say, “I’ve never questioned the integrity of an umpire. Their eyesight, yes.” It is our job as bankers to make sure that our legislators’ and regulators’ vision is clear as they assess the rules of the game we play.
When I look at the scorecard of the current economic recession and review the “players” on the field when the downturn picked up speed, I find myself scratching my head. Many of these “players” were thought to be mighty superstars of the game……….. Fannie Mae, Freddie Mac, Citigroup, Washington Mutual, JP Morgan Chase, Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs, Wachovia, and AIG. Confidence in the financial services game was bolstered by their participation. But as the final stanza in the definitive baseball poem Casey at the Bat tells us,
Oh, somewhere in this favored land the sun is shining bright
The band is playing somewhere, and somewhere hearts are light
And somewhere men are laughing, and somewhere children shout
But there is no joy in Mudville – Mighty Casey has struck out.
“Casey” striking out has left a cloud over the field of play. Those of us still going to the park everyday and playing in the pick up games in Anytown, USA are the ones who must reestablish the confidence in our economy and in our business of banking. We must distinguish “our banks,” the traditional banks, from those that the national media and political pundits continue to harp on, the former superstars that dramatically “struck out.” Yankee great Babe Ruth stated with authority, “the way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.” His reference to money in emphasizing the value of teamwork should not go unnoticed by bankers. It is important for us to come together as a team through our Arkansas Bankers Association and its affiliation with the American Bankers Association so that our unified message is clearly delivered. Our traditional banks are healthy and vibrant, we stand ready to lend money responsibly to support our customers and build our communities. I urge you to be alert to our Association sponsored visit to Washington, DC in September. Your voices and team spirit are needed.
As I scribble out these thoughts it is Opening Day of baseball season, a time that never ceases to excite me. A youthful enthusiasm for life returns to me each year on this day. It also marks the time to change pitchers at the Arkansas Bankers Association.
It has been an enlightening experience to serve as your ABA Chairman. What a banking season this past year has been! Representing our state at national and regional meetings alongside my wife, Kathryn, and other able bankers has made me acutely aware that we have an excellent team composed of our ABA staff, the Executive Committee of the Association, and its Board of Directors on whom we can readily depend. While the banking season is on a continuous loop, the annual convention of the ABA symbolizes Opening Day for me. On April 30 I will hand the ball over to Reynie Rutledge and take my place in the bullpen always on the ready to assist in any way beneficial to this business of banking that I find so fascinating. I want to express sincere appreciation to Danny Williams and the other outstanding bankers at First National Bank & Trust Company in Mountain Home for pinch-hitting for me throughout the year when absent from my “day job.” This appreciation also extends to members of my bank family at the Bank of Pocahontas and Integrity First Bank in Jonesboro. Thank you all for allowing me to take my swings on behalf of our Arkansas banks. Let’s play ball!!!
From around the state and across the Miles…………there is work to be done. Let’s go have some fun!
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