A Matter of Responsibility

20130920 Another Day Another Fine

A hallmark of community banking is accountability. Community bankers are held accountable to their customers because they live and work in the same neighborhoods. As locally based institutions with a stake in the prosperity of their communities, community bankers simply can’t afford to take advantage of their customers.

So Wells Fargo’s failure to take responsibility for fraudulently opening 2 million unwanted consumer bank accounts has been particularly disturbing for the community banking industry.

The megabank’s leadership has repeatedly blamed the widespread fraud on the 5,300 employees it fired as its $185 million settlement was announced—a fine that is nothing more than a rounding error for the $2 trillion-asset institution. Chairman and CEO John Stumpf refuses to concede that the scandal stemmed from failed leadership and a poisoned corporate culture. And even fellow banking industry representatives have responded by merely condemning dishonest or unethical behavior at “any bank, anywhere, any time.”

Any bank? Suddenly this massive breach of trust isn’t about Wells Fargo, but the banking industry in its entirety? Absolutely Not! No! This isn’t about “any” bank or all banks. This isn’t about universal condemnations of wrongdoing. And this certainly isn’t about community banks, who remain, as always, accountable for their actions.

What this whole sordid mess is about, however, is the massive negative consequences not just on American consumers, but the local banks that had nothing to do with it. Community bankers have seen time and time again how the consequences of megabank misdeeds rain down hardest not on the perpetrators, but on us!

Again and again, Washington responds to the largest banks’ bad behavior by rolling out new regulations that fall disproportionately hard on the smallest banks. While we fight and scrap and claw for exemptions and carve-outs, the truth is that community banks always get roped in to new regulatory burdens that take our attention away from our customers and toward red tape. Meanwhile, the large banks that incited the response have the resources to hire teams of lawyers to manage their compliance.

No, no, no—not again. We WILL NOT get dragged into this mess! Community banks are NOT Wells Fargo!

ICBA is doing its utmost to ensure Washington and the American public make a clear distinction between community banks and systemically risky institutions. We take responsibility for exclusively representing community banks, not the megabanks that make our members’ lives more difficult. Therefore, we will be with you—the community banker—every step of the way, ensuring that your name is not tarnished by this scandal. Because #WeAreNotWells!

As we’ve told Congress again and again, we need a system of tiered and proportional regulation based on size and risk, which will ensure appropriate standards on the largest banks while allowing local banks to continue serving their communities. In doing so, we can fix what’s wrong with our banking system by strengthening what’s right with it—community banks.

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