“Lies, Damn Lies and Statistics” and the Truth about the CFPA

My fellow Missourian Mark Twain made the following observations about lies:

“There are lies, damned lies and statistics.”

“A lie can travel halfway round the world while the truth is putting on its shoes.”

I was raised in a Southern household. In the South there is a big difference between a “lie” and a “damn lie.” A “damn lie” is a grievous thing. In Washington a damn lie is sometimes referred to as the ol’ Potomac Two Step. The objective of the Potomac Two Step (like a damn lie) is to deceive—either by getting the subject of your deception to focus on the wrong thing or by having the subject run off in the wrong direction. Since this is Super Bowl season, the NFL equivalent would be the misdirection play.

Well, these days it seems that there’s a damn lie going around about ICBA supporting the Consumer Financial Protection Agency. And to paraphrase Mark Twain, that lie has traveled halfway round the world while the truth is putting on its shoes.

Whether in Washington, D.C., or in Missouri, or anywhere else for that matter, such damn lies are fighting words. The truth is this—ICBA has never supported the creation of a CFPA over the community banking industry or any FDIC-insured banks for that matter. And anyone who says different is telling a damn lie.

Ponder this: Who has the most to lose in the current versions of financial reform? Answer: Wall Street and the unregulated financial firms. Who has the most to gain? Answer: community banks.

Now ask this question: Who are the only groups that exclusively represent community bank interests without compromise? Answer: ICBA and state community banking groups. Now ask: Who represents a broad range of financial interests including Wall Street megafirms and some nonbank financial firms? Answer: many state and national financial trade groups.

Finally, what trade group has been universally recognized among Washington, D.C., policymakers, the national and international trade press and major national newspapers and publications as having fought hardest and gained the most for the community banking industry? Answer: ICBA.

The truth is that ICBA is fighting hard to have Congress bring balanced competition to our financial-services system by requiring that all financial firms that grant credit comply with the same consumer-compliance laws that all our members stagger under on a daily basis. In other words, require the nonbank financial firms that caused the great bulk of consumer abuses to comply with the current laws we are all burdened by. ICBA wants to make sure that community banks don’t suffer under new and very onerous consumer laws (whether or not there is a CFPA) while the unregulated financial firms get a pass.

Some in Washington and elsewhere want to spin the ICBA position to their benefit, so they spread the damn lie that we support CFPA. These damn lies are mainly spread by those who have a vested interest in maintaining the status quo—the status quo that has so crippled the community banking industry and forced community banks and our nation’s taxpayers to pay dearly for the reckless and irresponsible sins of Wall Street and their allied nonbank financial firms.

Last week I came across an American Banker article titled “Lawmakers Dealing on Consumer Protection,” with a quote from Douglas Elliot of the Brookings Institution.  

Elliot says, “I’m confident that the administration proposal [CFPA] won’t be what we end up with. There will be some significant compromise. The bankers, in particular the community bankers, have made a lot of headway in pushing against the Consumer Financial Protection Agency.”

That quote struck me for a couple of reasons. First, it’s a recognition of ICBA’s growing political clout coming from someone who clearly doesn’t have a dog in this fight. Second, it underscores the value of staying at the table rather than just walking away and leaving policymakers free to restructure the regulatory system without any input from community bankers.

ICBA chose to stay at the table so that we could get policymakers to recognize that community banks should NOT have a new regulatory agency imposing its burdens, enforcement or examinations on us.

We will continue to stay at the table, even though our success isn’t sitting well with the megabanks on Wall Street, because without the independent voice of ICBA speaking out on community bank issues, the voice of community bankers would be lost in the ever-growing chorus of Wall Street megavoices storming Capitol Hill.

There would not have been a CFPA proposal in the first place had the nonbank subsidiaries of the Wall Street firms and other “shadow banking” firms not abused customers so grievously. The CFPA proposal was not born out of abuses in the community banking industry—we all know who was responsible for spawning it.

When I came to Washington from Missouri, I found out the hard way that nothing is what it seems. Damn lies are everywhere. For a Missouri community banker like me, that’s a hard reality to adjust to. Evidently, those who want to defeat the ICBA pro-community bank agenda have seized on the CFPA as a way to spin and misrepresent the ICBA position. They want to make it look like we’re losing ground, and it’s a damn lie—we’re the ones who are winning.


On June 20, 2009, while cohosting CNBC’s Squawk Box, I responded to a question about CFPA by host Becky Quick. I stated that creating a separate consumer-protection agency was a “bad, bad, bad idea because the very delicate balance between safety and soundness and consumer protection would be lost.” I went on to state, “Examinations are more marble cake than layer cake. Safety and soundness and consumer protections must be blended together for an effective examination. One cannot have domination over the other without causing harm both to the bank and the consumers.”

ICBA opposes new consumer statutes imposed on community banks and will fight to bring ALL nonbank financial firms under the same consumer regulations that community banks must labor under now. We have enough consumer protections on the books. Now let’s protect community banks and the nation’s taxpayers from too-big-to-fail.


3 thoughts on ““Lies, Damn Lies and Statistics” and the Truth about the CFPA

  1. Cam,

    Well said. If they thought you would let something like this pass they haven’t been paying attention.

    Thanks for your ever diligent efforts and leading the way for us. You are greatly respected and appreciated.

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