Academic journal article ABA Banking Journal

Total Engagement: At ABA GR Summit, Bankers Give as Good as They Get

Academic journal article ABA Banking Journal

Total Engagement: At ABA GR Summit, Bankers Give as Good as They Get

Article excerpt

There were many good "applause lines" during ABA's two-day Government Relations Summit in Washington, but ABA Chairman Matt Williams had one of the biggest. Right after a panel discussion in which the subject of credit unions' tax exemption was discussed in the context of the country's enormous budget deficit, Williams, CEO of Gothenburg (Neb.) State Bank, ad-libbed, "We should create a pathway to citizenship for credit unions."

Credit union taxation was one of the primary topics bankers carried to the Hill. As long-time tax expert Ken Kies, managing director, Federal Policy Group, Washington, D.C., observed regarding the environment for changing the exemption, "I have not seen better conditions in the last 30 to 40 years."

Other primary messages included: support for reintroduction of the Examination Fairness bills (H.R. 1553 and S. 727--both were reintroduced shortly after the summit); support for a Basel III "stop and study" bill (S. 731) introduced by Senators Joe Manchin III (D-W.Va.) and Dean Heller (R-Nev.) that would require an empirical impact study before the proposed capital rules are put into effect; support for the Municipal Advisors Bill (S. 710) introduced by Senators Mark Warner (D-Va.) and Patrick Toomey (R-Pa.) that would fully exempt banks from Dodd-Frank rules in this area; and discussion of capital ratios and the "too-big-to-fail" issue.

The capital ratio issue is focused on the fact that higher capital, beyond a certain point, will force most small and midsized banks to shrink, cut their lending, and devote scarce resources to raising capital.

The 2013 summit drew 1,100 bankers and state association executives, equaling last year's record turnout. The speaker list reflected the impressive numbers and included Senate Minority Leader Mitch McConnell (R-Ky.); House Financial Services Committee Chairman Jeb Hensarling (R-Tex.); Sen. Jon Tester (D-Mont.); Alan Krueger, chairman of the White House Council of Economic Advisors; and representatives of four federal regulatory agencies, including FDIC Chairman Martin Gruenberg; Federal Reserve Board Governor Elizabeth Duke, and Steven Antonakes, acting deputy director of the Consumer Financial Protection Bureau. What follows are highlights of the conference.

* At the "Meet the Regulator" session with the Office of the Comptroller of the Currency, Senior Deputy Comptroller Jennifer Kelly addressed a banker's concerns about Basel III. "We're still working through" the thousands of comment letters, she said, adding that all the letters are being read and considered. Her prediction for a revised proposal was "late spring."

One community banker asked her, "Why do we need Basel III? It's intended for the largest banks."

"I wish we didn't call it that," Kelly responded, referring to the "Basel III" label. "We tried to separate out what would apply to community banks."

In related summit remarks, ABA President Frank Keating said, "We need to inform members of Congress and regulators how bad Basel III is--not just to go back and revisit it, but to kill it."

* Alan Krueger gave an overview of economic conditions saying that he was particularly optimistic about the impact of immigration reform, which he described as "an economic imperative. …

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