Since my blog is still very new, I thought I would remind everyone that each week I will be sharing some of my thoughts with you on an informal basis. These are intended to be just my off the cuff thoughts about issues of the day impacting the community banking industry and the financial services industry overall.
I don’t yet know if it’s safe to blog when your blood is boiling, but I guess I’ll find out. Two recently published articles echo themes that ICBA has been hitting on for years: the unequal treatment in Washington between too-big-to-fail Wall Street financial firms and “too-small-to-save” Main Street community banks. This inequity is shocking and thinking about it always makes my blood run hot.
Yet every time ICBA speaks out on behalf of community banks, we’re accused of being “divisive”—or worse. In a game as old as Washington, the big banks and their hired guns stack the deck, then turn around and accuse us of playing unfairly.
One of the articles in The Hill newspaper reports that the Wall Street megafirms are ramping up their Washington lobbying. The other article, in the Chicago Tribune, details how Wall Street is spending heavily to fund political campaigns to make sure it keeps its favored status.
Everyone knows that the lobbying machines of the Wall Street banks are many times larger and their pockets much deeper than ICBA’s, so how is it possible that the little community banks are the ones destroying unity?
For years the voice of the big banks has been the only one heard. These giant Wall Street firms not only have their own individual lobby shops, but they have their own associations – the Financial Services Roundtable (only the 100 largest financial firms can belong) and the Financial Services Forum (again, only the largest can belong) that represent only their own interests. In addition, they are members of the American Bankers Association and several other national financial trade groups in Washington.
Now that community banks are finally being listened to, instead of making room for the kind of diversity that fuels our two-tiered banking system, there’s an all-out effort to silence us.
If the very largest megabanks can have their own lobbying machines and voice, the small community banks deserve their own lobbying force and voice. Believe me; community banks need it a lot more than the megabanks, which already have their alumni running Treasury and other government agencies.
Community banks are already suffering mightily from Wall Street’s sins. Yet, when ICBA calls for laws that will allow the breakup of the TBTF institutions, or for a more fair FDIC assessment system, or for the systemically dangerous firms to prefund their own bailouts so community banks don’t get hit by the next meltdown, we find opposition at every turn.
Time and again, we have reached out to other groups to join us in removing regulatory burden from community banks and shifting it where it belongs – on the shadow industry and the megabanks. We have asked to no avail.
But we’ll keep trying. ICBA stands for community banks and only community banks, in the same way the Financial Services Roundtable stands for the megabanks. We will continue to fight without compromise for having an equal voice at the financial table and equal treatment under law.