Leveling the Playing Fields and Reducing Regulatory Burden

Amid dual tragic news stories last week — deadly mudslides in Washington state and the continuing ordeal of the crashed Malaysian flight 370 — Amber Van Til from IBA’s GR Team and I participated in the American Bankers Association Government Relations Summit in Washington, DC. For this annual event, bankers and state banking association leadership from throughout the nation gather to discuss the state of the industry and to call upon elected officials to espouse our views on issues affecting the business of banking and the overall economy. This year’s summit brought together a record number of nearly 1,100 attendees. Various meetings covered an array of subject matters, and general sessions featured messages from key congressmen on regulatory burden, secondary mortgage market and housing government-sponsored enterprise reform, and plans for strengthening our economy.

The Indiana delegation was able to visit with the offices of all but two of the 11 U.S. senators and representatives from Indiana. In all but two of those offices, we were privileged to meet with the actual elected officials. Our consistent messages were that overregulation is devastating to our banks, communities and customers; that community banks suffer innate disadvantages compared to credit unions, particularly regarding the unjust credit union tax exemption; and that unfair government-backed competition from the farm credit banks allows them to provide unrealistic pricing and terms for loans, many of which are unrelated to agriculture. We also asked for opinions on the recently released versions of suggested reform of the housing government-sponsored enterprises and, thus, access to the secondary mortgage markets.

While we received little encouragement regarding leveling of the playing fields with either credit unions or the farm credit banks, we were encouraged by what appears to be a growing recognition that the pendulum has swung too far toward regulatory burden on the banking industry, particularly on the community bank sector. Significantly, this regulatory burden sympathy seems to be shared by both Republicans and Democrats. Many Democrats are showing a growing concern about the effect of regulatory burden, not only on banks, but also on job-creating businesses in general. Message breakthrough is precisely why we invest so much time to call upon these influential people regularly. And we certainly are not alone. While banking remains at the forefront of regulatory burden, the message is being driven home by all businesses. Most Republicans get it, and now more Democrats are getting it, too.

Another issue is that, in addition to being overburdened with the endless minutia demanded by our federal government, U.S. businesses are the highest taxed in the world. Congressmen on both sides of the aisle seem to grasp that, consequently, the United States is losing economic leadership worldwide. Regardless, be aware that Congress moves at a glacial pace. Even if a majority of legislators agree, the system is structured to allow individual roadblocks, particularly in the Senate, that can drag out the simplest of measures. Nevertheless, it is encouraging that our problems are being recognized — the first step toward change.

We will continue our messaging about all of the aforementioned issues in the hope that fairness and logic will eventually prevail and will dictate an agenda that allows all parties to compete on level playing fields in an environment of reduced regulatory burden. The United States must retain its position as economic leader of the world. It is a gift we should pass on to our children and grandchildren, just as it was passed on to us. Indeed it is a gift for the entire world, as this great experiment called democracy must prevail. That, ultimately, is what we are fighting for, and we thank you for standing with us.

S. Joe DeHaven

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