Momentum. Momentum is the word we use to describe that unknown impetus driving thought or action in a certain direction. It can be either good or bad direction, or sometimes both. Currently the banking business appears to have plenty of momentum driving it in a good direction. As I speak with bankers across Indiana and throughout the nation, I am regularly told that they are seeing an increase in high-quality loan demand ‒ more than they have seen in quite a while. That is a very good direction.
The Federal Reserve Open Market Committee, which sets interest rates, seems to be prepared to soon increase those rates, allowing banks to increase the interest margin between loans and deposits, and thus helping improve net earnings. Even Congress appears to be moving some legislation that would provide much-needed regulatory relief. The recently concluded session of the Indiana General Assembly passed a few bills that will help banks operate more efficiently in Indiana.
Last week the Indiana Bankers Association hosted its annual Mega Conference, an intense two-day educational program covering many disciplines of banking in nearly 50 sessions. Speakers and bankers were more positive about the future than they have been in several years. This conference is an effective barometer, because it attracts directors and officers from all levels of their banks, and those banks are of all sizes and geographic locations. In other words, Mega this year provided a representative cross section of 1,276 attendees who are either bankers, or purveyors of bank products and services.
Momentum is funny, though. It can change quickly, or it may slog along for years and years. No one person or group of people can make momentum continue or stop, but an event or a widespread shift in group opinion can change it in a day. We can facilitate desirable momentum by maintaining a positive attitude about those factors that are driving it. Another way to move that needle is through grassroots efforts. For example, invite a U.S. Congressman, state representative or state senator to your bank to show firsthand the regulatory burden involved in making a loan or opening a new account. Maintain that legislative relationship by providing input on issues you care about and are expert in. A simple email, postcard, letter or tweet from a constituent can go a long way toward influencing how our elected officials vote.
Obviously, there also are momentum changers that we have no control over. The recent financial crisis that tarnished banker reputations, sent numerous banks into default, and cost many consumers their jobs and homes is a sad example of how quickly momentum can change. We should never lose sight of the lessons learned during this damaging episode of our history.
Please continue to press the current positive momentum forward. Let us unite our efforts behind that which is in our control. We must continue to move forward in the right direction, so that our communities, customers, staffs and shareholders are fairly and comprehensively served. We have had enough bad momentum in recent years, so let’s work to sustain the present positive direction for years to come!
– S. Joe DeHaven