The TAILOR Act and Other Examples of Waylaid Messages

That great American philosopher, Yogi Berra, passed away last September at the age of 90. I have often quoted him through the years, and I am saddened that we have no more keen observations by this incredible man. Thankfully, during his 90 years on earth, he left a treasure trove of quotes.

As the congressional session has gotten underway, one of Mr. Berra’s best-known quotes aptly nails the perspective of bankers: “It’s like déjà vu all over again.” The House Financial Services Committee last week passed a bill known as the TAILOR Act* out of committee by a 34-22 margin. The TAILOR Act simply requires bank regulatory agencies to ensure that regulations are tailored to meet the size and business plan of community banks and credit unions. It was introduced last year by Rep. Scott Tipton, a Republican from Colorado.

While a couple of Democrats voted for this measure in the committee hearing, all 22 opponents were Democrats. Their reason for voting against this measure is best summed up by the committee Ranking Democrat Member, Rep. Maxine Waters, who said: “The TAILOR Act, I believe, is a bold attack on the Dodd-Frank financial reform law. This bill would allow every bank and financial institution overseen by agencies like the Federal Deposit Insurance Corp. or the Consumer Financial Protection Bureau to challenge rulemakings in court if they felt a regulation was not uniquely tailored to their business needs.” It is very frustrating to hear the Democrats defend the Dodd-Frank Act as if it were the perfect legislation. It is not; furthermore, the TAILOR Act does not do what Rep. Waters states.

The TAILOR Act should easily pass the House of Representatives and be sent to the Senate. The next question will be how Sen. Richard Shelby, chairman of the Senate Committee on Banking, Housing & Urban Affairs, will proceed with this bill. Last year his big regulatory relief bill was caught in partisan politics, and a few Democrat members ‒ including Sen. Joe Donnelly from Indiana ‒ worked tirelessly to negotiate with Shelby, only to have him refute those efforts at the last minute. Will the TAILOR Act, which is only a tiny part of the bill from last year, be doomed to the same fate? Will those brave Democrats be willing to negotiate again on behalf of banking? Will Shelby be more willing to pass legislation? The answers to these questions will determine the fate of the TAILOR Act.

I think it is important that we, as bankers and lobbyists for bankers, also question our approach to participating in the legislative process. Bankers nationwide work hard to develop and sustain relationships with congressmen, and banking lobbyists across the country dedicate their talents to drafting and sharing clear messages about complex issues. Yet we see little regulatory relief. What do we need to do differently? Super PACs are the new trend, and the national bank trade associations are beginning to focus more attention here. Perhaps the super PACs will make our message heard, but I am not sure that throwing more money at the problem is the answer.

We need to work on this for a while. We seem to need a hammer that we have not yet identified. As Yogi Berra said, “You can observe a lot by watching.” Perhaps we need to watch what other industries are doing to be successful. Lastly, keep in mind Yogi’s telling words: “It ain’t over ‘til it’s over.” We will win in the end, but will it be soon enough?

– S. Joe DeHaven

*”Taking Account of Institutions with Low Operation Risk”

One Response to The TAILOR Act and Other Examples of Waylaid Messages

  1. Doug Bennett says:

    The hammer you mention will only be effective once banks (and other industries) are willing to use it. Most comments I hear are that people are afraid to speak up/criticize politicians because they fear it will be held against them and legislation may get even worse. Totally understandable but means change will not happen unless there is a willingness to take some heat.

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