‘Fair and Right’ in Sports and in Banking

Evansville native, Indiana University student and now Olympic gold medalist Lilly King has grabbed headlines worldwide for her comments describing her Olympic win on Monday as “a victory for clean sport.” Her primary competition in the event, the 100-meter breaststroke, was Russian swimmer Yulia Efimova, who previously had tested positively, twice, for use of performance-enhancing drugs. In fact Efimova was cleared to participate in the Olympics just days prior to Monday’s event. Lilly, who at age 19 shows confidence beyond her years, has stated that she did not believe Efimova should be allowed to compete, given her past offences. Now many are questioning why any known drug cheaters should be allowed into the Olympics.

This question of fairness extends far beyond the sports arena. Bankers, for instance, regularly compete for customers with shadow banking system players who do not have to abide by the same requirements that bankers face. This is not a matter of cheating ‒ the shadow bankers are not officially breaking rules ‒ but instead a question of fairness. Why should shadow banks be allowed to play by an advantaged set of rules? Credit unions, too, enjoy significant regulatory advantages over banks (e.g., no Community Reinvestment Act requirements), plus are exempt from federal and often state taxes. How is that fair and right?

Another example is the Farm Credit System, a quasi-private/public government-sponsored enterprise that pays federal taxes only on a small percentage of its business. Additionally the FCS profits from funding advantages through an implicit federal government guarantee, and it continues to liberalize its lending reach well beyond farming and ranching. How is that fair and right?

There are other examples that I could delve into regarding ATMs, mortgage companies and, more recently, fintech companies. All have regulatory advantages not shared by banks.

Fortunately the banking industry does have its champions, like Lilly King in swimming, who are willing to call out unfair advantages. The Independent Community Bankers of America, American Bankers Association, Indiana Bankers Association and other state bank trade associations ‒ with grassroots support from bankers across the nation ‒ regularly point out to legislators and regulators the inequity of an uneven playing field. Though it can be frustrating to have to continually deliver the same message, the more we speak out, the more our voices are heard.

Back to Lilly King, I applaud her efforts to bring clean competition to sports, and I wish her continued success in pursuit of Olympic medals, earned the fair and right way. My wish for banking is that our continued efforts prevail in bringing parity to competition, ultimately to the benefit of consumers, who deserve the best of products and services delivered in a free market environment. And that would be fair and right for all.

– S. Joe DeHaven

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