There is a whimsical atmosphere in Washington when spring arrives. While the cherry blossoms are the main draw, the tomes of history permeate every street, building and monument as you walk the stately roads leading to an impressive US Capitol building which towers over the majestic city.
For all of the magnificence that is our nation’s capital there is a sight nearly as spectacular that comes with the culmination of each April; nearly 1,000 community bankers from every walk of life descending upon the city to plead for Main Street America.
The ICBA Washington Policy Summit has catapulted the influence of the nation’s community banks for the past half-decade through common sense proposals aimed to jump start our economy and get this country back to work. The summit draws bankers from every corner of the country, from Maine to Florida and Hawaii to Alaska, and everywhere in between. There is something to be said about so many passionate leaders, motivated about helping their communities thrive, taking their message straight to the policy makers and elected officials and making significant strides.
This year was no different as PACB members comprised the largest delegation in the state’s history with bankers representing nearly every congressional district. More than two dozen community bankers from Pennsylvania participated in this advocacy effort to tell Congress regulatory relief can no longer be an abstract goal but that immediate action is needed now without any more delay.
Preparing for the Summit
Prior to storming the Hill with the message of pro-growth regulatory relief measures, community bankers received a pep-talk from ICBA President/CEO Cam Fine. Fine, filled with a Midwestern passion that resonated throughout the standing room only ballroom, affirmed the message of community banking and the different it is making in policy decisions. Talking about the various financial services trade associations, nearly two dozen at last count, he spoke of ICBA being the lone ship in the storm that has consistently advocated for community banks and the good that they do in the community. If there were any bankers in the room filled with trepidation about meeting with their Congressperson, Fine’s heart-check speech made sure to put a fire in the belly that would ignite spirited reasoning for community banks’ role as the backbone of economic vitality.
Perhaps the most watched person by the media and politicos when it comes to the prospect of rolling back Dodd-Frank, Senate Banking Chairman Richard Shelby of Alabama, took the stage next to talk about the work the committee would be doing in the coming weeks. Now a month removed from the summit, we have a better understanding that policies he is promoting for community banks include safe harbor for loans in portfolio, elimination of privacy notices, short form call reports, and other common sense reform measures that don’t jeopardize the safety and soundness of our institutions, but rather, helps get bankers out of the business of 24/7 compliance and back into the business of lending.
Shelby spoke of the importance of getting the wheels moving on relief targeted for community banks and not allowing Wall Street to torpedo efforts or slow down the process of progress. He encouraged attendees to take their hometown messages to the offices of Senators and Representatives so that they could fully understand the relief advocated by community banks would make a difference for those institutions truly invested in their communities.
By now the coffee was coursing through the veins of the community bankers and the air was thick with anecdotes of bankers trying to do right by their customers, but being stymied by overzealous “one size fits all” regulation that benefited no individual. The room filled with 1,000 community bankers represented an armada prepared to descend on Capitol Hill with an armament to match any interest group or foe determined to spread misconceptions about the relief so badly needed. And thus it was that wave after wave of community bankers traveled the two miles via subway, cab, Uber, and bus to the US Capitol grounds where the warm springtime air welcomed all of the private citizen advocates.
House Financial Services
For first time attendees, the prospect of meeting with their Congressman in a setting outside of their hometown can seem like a daunting task. Inside the district they are known as a community leader, happy to show up for parades and ribbon cuttings, but would they be the same in the marbled hallways, surrounded by high powered lobbyists and different interest groups competing for a sliver of their attention? Fortunately for the citizens of Pennsylvania, the Congressmen of our state are the same back home as they are in Washington.
Following meetings with Senate staff in the morning to elicit support for bi-partisan relief measures, a significant contingent of community bankers from the southeastern region of the state met with three term Congressman Mike Fitzpatrick who sits on the powerful House Financial Services Committee; the committee that oversees banking related issues in the House. An advocate of community banks, before it was trendy, Rep. Fitzpatrick has been a stalwart voice in the wind calling for sensible and right-sized regulation that allows small businesses to grow but prevents the abuses of Wall Street from incapacitating our small towns and boroughs.
Our major agenda item of the day was support for the comprehensive CLEAR Relief Act, HR 1233. The bill was aimed at providing whole-sale relief for community financial institutions that, while not a panacea, offered hope that Washington could promote bi-partisan measures like the ones mentioned in Sen. Shelby’s bill. Last year, Pennsylvania had nearly all of its Congressional delegation support the bill but it was never brought for a full vote. The stakes are higher for this year with the shrinking window for legislative action and so it was important to solicit support early and gauge where our elected leaders stood on this bill. A co-sponsor of the bill from last year, Rep. Fitzpatrick gave his enthusiastic support for the legislation and agreed to be a co-sponsor again this year. Having a member of the committee with jurisdiction of the bill as a co-sponsor sends an incredibly strong message to the other members of the delegation.
On the other side of the state, also sitting on the House Financial Services Committee is two term Congressman Keith Rothfus. Another defender of the business model of community banking Rep. Rothfus was the first member of the Pennsylvania delegation to support HR 1233 and encourage colleagues to co-sponsor the bill. Not only has he been a strong supporter of the entire community banking industry but he has become possibly the strongest advocate for mutual institutions and this year sponsored two bills aimed to preserve the role of mutual institutions in the marketplace. HR 1660 establishes a simple election process for an institution to become a newly-created Covered Savings Association, and it includes important safeguards to prevent fire sales of assets and subsidiaries during the transition process while also preserving the ability of the OCC to enforce the law and prevent evasion1.
Because of the environment where banks are required to hold additional capital, Rep. Rothfus acknowledges the difficulty some mutuals can have in meeting that threshold due to their limitations in raising capital in a manner that a commercial or stock bank could. HR 1661 attempts to address this by creating a Mutual Capital Certificate that these institutions can issue to raise additional capital without sacrificing their structure. PACB has endorsed and supports both of these bills and has been working with other members of the Pennsylvania delegation to support this legislation.
The Policy Summit is always a good opportunity for bankers to reconnect with their elected official since schedules can be difficult to coordinate. Nearly every meeting is a cordial catch up opportunity to discuss the relevant topics of the day while allowing the bankers the time to provide an update on the most pressing issues. Typically the Congressman will have a sense of the problems plaguing the industry through constant contact back in the district, yet it is still important to reinforce these concepts and understand the concerns of the member if he/she has given pause to support a bill.
Other meetings can be beneficial for when there is turnover in the Congress and new faces and personalities ascend to the US House or Senate. This past election cycle longtime serving Representatives Jim Gerlach and Allyson Schwartz declined to run for their seat and so the 6th and 13th Congressional districts were respectively thrown into open-season for aspiring politicians. The 6th Congressional District, covering a wide spread of Berks, Lebanon, Montgomery and Chester County, would now be represented by Ryan Costello, a former Montgomery County Commissioner. The 13th Congressional District, representing Northeastern Philadelphia, and following a bruising primary battle, would have Brenden Boyle take the reins after serving a stint in the State House of Representatives.
Despite having different letters after their names, both Congressmen understand the importance of local financial institutions that are deeply rooted in their communities and understand the value of the services they provide. Meeting with these Congressmen in the Washington setting offered an opportunity to build relationships with the bankers in their district so that they could have an expert to query when bills of importance are put on their desk. This type of relationship with an elected official can be the difference between having bad policy forced through the legislative making process, or having well informed leaders asking serious questions about the potential for unintended consequences.
Advocates and Allies
Pennsylvania is a tremendously diverse state swinging from the inner-city neighborhoods of Philadelphia, to the coal region of the Northeast, to the rolling hills of Central PA, sweeping to the industrial streetscape of Pittsburgh’s days of yore. Pennsylvania’s community banking industry is fortunate to have many allies in Congress that despite varying backgrounds and professional experience, understand the value community banks play in the communities they represent.
Allies like businessman and former Hazelton Mayor Lou Barletta, and business owner Tom Marino, now serving alongside each other in Congress, who understand the devastating impact of onerous regulatory burden on small businesses. Longtime Congressman Joe Pitts from Lancaster and Chester sees the difference community banks play and the niche role they serve having the honor of representing the newest de novo bank, Bank of Bird-in-Hand.
Pittsburgh Congressman Mike Doyle is another example of an individual that recognizes the partnerships that exist in low to moderate income neighborhoods thanks in large part to the community banks working alongside affordable housing groups and supporting their efforts to create a better economic climate for all Pennsylvanians.
Having these allies in Congress allows banks to express the goodwill they are doing back home, and show a real cause for why policies that support their business are beneficial to the community. When bankers can demonstrate and show the tangible benefits they are providing to the community it not only helps the community but it reinforces how public policy can either encourage that to continue and thrive or flounder under oppressive regulation that handcuffs banks’ ability to serve their communities in a way they know best.
Coffee with Senator Casey
Wrapping up the final day of the summit, a few community bankers were able to spend quality time interacting with the state’s senior Senator, Robert Casey, at a coffee event held by the Senator. Having met with his staff the previous day, this meeting served to reinforce the policies community banks are promoting and the ways that he can stand alongside them and help to secure success for legislative initiatives.
This one on one interaction serves as the catalyst for follow up conversation and dialogue to encourage a growing knowledge about the industry and the importance of community banks in areas like financial literacy, first time homebuyers, and protecting the privacy of customers.
For many, it did not seem that long ago when we found ourselves at the voting booth wondering about the candidates for office that would lead us to prosperity. Though we may only be seven months removed from the last general election, the political realities of the day mean that eyes are turning, or have already turned, to the presidential election of 2016. That reality means a very short window for legislative action by the Congress for fear of offending significant voting blocs of constituents with controversial votes. With each passing day on the calendar, the window closes on the opportunity to accomplish even the most non-controversial issues facing our country.
The Policy Summit is a great exercise in advocating for the issues that are needed but it is not a final step. Advocacy requires going beyond the meeting and pressing the issue several times moreover. It isn’t enough for your elected officials to tell you they don’t support an initiative, rather it is imperative that you understand what is giving them concern and speak directly to those issues to assuage concerns and dispel inaccurate information that may be distorting the record.
While we recognize not everyone may be able to trek to Washington, it is an easy endeavor to invite your elected officials into your bank and tell your message of community banking. You may be surprised just how receptive they are to listening to your story and better understanding your struggles as a small business promoting jobs and economic strength for the community.
This article can be found featured in the June 2015 issue of Transactions. Not a subscriber? Visit the Transactions page on this website or call PACB at 717-231-7447 to start receiving the magazine.