Pub. 3 2015 Issue 4

18 The Community Banker www.mibonline.org Fine Points WORKING THE LEVERS By Camden Fine, President and CEO of ICBA I n Washington, the levers of power are continually pushed and pulled. Sometimes they’re conspicuously controlled for everyone to see. More often they’re quietly worked, or nudged in one direction or an- other, behind closed doors. And how those levers are operated, for better or worse, is greatly influenced by the ingrained mindsets and biases of those maneuvering them. For far too long Wall Street chieftains appointed to the highest unelected positions of financial policymaking have exercised—quietly, subtly and out of public view—far too much one-sided thinking and action in Washington. Certain- ly, in Washington, a naively permissive and misplaced trust in wheeling-dealing financial mega-institutions was a major factor of the Wall Street financial crisis. And having someone with firsthand community banking knowledge at Treasury’s highest levels would have avoided the cavalierly dismissive approach the agency took toward strug- gling community banks during its initial emergency response to the crisis. For years ICBA has warned about this hazardous Wall Street bias in the agency hierarchies. But the financial crisis and the costly regulatory reaction heaped upon blameless but already overburdened com- munity banks have raised the stakes. Then last fall the Obama administration named a Wall Street investment banker to become the Treasury’s under- secretary for domestic finance, and ICBA loudly said—enough is enough! Throughout Wash- ington policymakers are hearing our message—that too many people who only see, know and serve Wall Street are working the levers of power here. Wheth- er intentionally or inadvertently, continuing to disregard commu- nity banks on Main Street harms the public interest and muzzles an important policy voice. After all, it’s community banks that are truly the indispensible heart of Main Street and rural America. So for more than two years, as part of our broad regulatory burden relief efforts for commu- nity banks, ICBA has consistently sought more assurances that community banks and Main Street will be served when de- cisions are being made behind closed doors in Washington. As part of this effort, ICBA has specifically promoted legislation to establish an undersecretary post for community financial institutions at Treasury. And, in recent years, we began pushing legislation to require the Federal Reserve Board to always have a governor there with direct community banking knowledge and experience. Then in a widely bipartisan push in December, marking what would have been a huge victory for generations to come, Congress came very close to passing that legislation as part of the Terrorism Risk In- surance Act, which was blocked for unrelated reasons by a last-minute protest by a single retiring senator. The Federal Reserve Board bill has an excellence chance of passing the Congress this year, signaling a seismic and concrete shift in thinking in Washington that acknowledges community banking’s essential financial role. Such legislation to bring greater community bank perspective to Washington’s everyday deci- sion-making is long overdue. That community banks are drowning in regulations proves that tiered regulation that ICBA has long advocated that properly considers a financial institution’s size, activities and business model must be more widely expanded and fully ap- plied—and soon. But Congress’s action last month shows we can get all of this done. Just as important, thanks to ICBA and community bankers, Washington is now focusing more fully on the needs of the nation’s community banks and Main Street. Wall Street has had its say for years. Now, it’s com- munity banking’s turn.