Reg Relief Fails Again


One of the more frustrating experiences in life is to spend hours and hours working on a project, but failing to get it finished. Even if there are valid reasons for the incomplete, it still chalks up as a failure. The barriers to success may be out of your control, yet the failing leaves an indelible mark. Sports brings these lessons to all of us by the basketsful.

These failings take much time to heal. Such an event occurred last week. After working countless hours, days and weeks over the course of several years, this was supposed to be the year that we would finally gain meaningful regulatory relief for banks. It seemed the stars had aligned to make it happen, and stayed lined up just to watch us celebrate. But there is no joy in Mudville. The might Casey has struck out. Despite the diligent efforts of thousands of bankers and industry lobbyists working their grassroots networks, regulatory relief did not pass Congress. I could hardly believe that all we got was a study for Basel III and the few important, but minor, relief items that came at a high price in the transportation bill a couple of weeks ago. The high price was the confiscation of about $20 billion of Federal Reserve funds and the reduction in the interest paid on mandatory reserves held by banks over $10 billion in assets at the Federal Reserve. Effectively, this is an additional tax on banks, while credit unions remain tax-exempt, and the Farm Credit System continues to enjoy significant tax advantages.

Throughout the year, we were confident that 2015 would be our year. Sen. Richard Shelby, chairman of the U.S. Senate Committee on Banking, Housing & Urban Affairs, passed a bill out of his committee that provided the desired regulatory relief that the banking industry had been crying out for the past several years. We believed we had finally persuaded Congress that banks have become unable to satisfactorily serve their customers. In other words, the problem is how Congress’ continued burdening of banks is affecting customers, who are also voters. This was not some slick PR campaign. It was real stories from real bankers from throughout the country.

In all fairness, Sen. Shelby’s bill was not popular among many Democrats. However, four Democrat senators understood the reality that banks are being hamstrung from serving customers. Among those statesmen was our own Sen. Joe Donnelly who, along with like-minded Democrat senators, worked closely with many Republicans, from Memorial Day until a week ago. While we deeply appreciate the huge efforts made, particularly by those four Senate Democrats, we are left with a hollow feeling of failure. Why can’t all of the Democrats see that many of these regulations are holding back the full potential of economic recovery? Why can’t the Republicans take half a loaf, rather than hold out for the whole thing? Did we, as leaders of the effort to get regulatory relief for our members, leave some stones unturned? Where did we fail, and why?

So far the answers to these questions are unclear. Over time we will find some answers and adjust our strategy to go back into the ring for yet another fight. One thing that is clear is that those of us who lobby on behalf of banks and bankers sincerely feel for those banks and bankers. Our understanding and appreciation for what bankers do every day for their customers and communities make us want to to pick up the sword and go back to battle. We share your frustration and will keep giving 100 percent of our efforts until you are once again able to serve your customers and communities appropriately.

– S. Joe DeHaven

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