April 20, 2011
Thus far, the Indiana Bankers Association and, more importantly, the member bankers have been engaged in a battle at the Indiana General Assembly over $300 million that is in the Public Deposit Insurance Fund (PDIF). I have marveled at the masterful grassroots effort of hundreds, if not thousands, of Hoosier bankers. They clearly understand the importance of the PDIF to protect taxpayers in every municipal, county or state taxing authority. Should a bank fail that has dollars on deposit from a taxing authority, the PDIF steps in after the Federal Deposit Insurance Corp. (FDIC) has paid depositor insured fund claims.
Regretfully, Gov. Mitch Daniels has included in the state budget a provision to take $200 million from the PDIF in order to balance the budget. The General Assembly has already “borrowed” $50 million of the fund, with repayment due in 2013. The IBA Government Relations Team and those many bankers have worked diligently to explain to every state legislator that the fund is important and necessary. Furthermore the money does not belong to the State of Indiana. Any borrowings that are not repaid, or acting as if the segregated money is owned by the State to move around at its pleasure, amounts to pure theft. If an individual or private company were to act in this manner, lengthy jail time would ensue.
This past week, it has struck me that these thousands of bankers have been focused on this issue because of principle. Bankers play by the rules and believe that others should, too. During the nearly 75 years that the PDIF has been in existence—funded by commercial banks and the income from those funds—bankers have never suggested that those funds be used in any manner to benefit their own institutions. Many others have sought benefit from the PDIF, but never bankers. Bankers have been offered the opportunity to use the money for some other reason, but declined. The real purpose still exists. No trading, no using and no agreeing for others to take PDIF money has ever been contemplated by these highly principled bankers. A deal is a deal!
During the next several days, the pressure will mount for bankers and legislators to agree to the theft of some of this money. Fortunately the Indiana General Assembly has many elected officials who share our banker principles. While we may lose, I will bet that we do not waver.
I am very proud of these highly principled men and women. It is an honor to work with and for them.
– S. Joe DeHaven