32 Hoosier Banker June 2015 FEATURE A stay-at-home mom in Massachusetts goes through the pain of a divorce, resolved to provide as much stability for her kids as possible. She sets out to re-enter the work force and applies for a loan to purchase the family home, so her kids can remain in the same schools. The bank wants to help, but because the woman cannot meet the ability to repay/qualified mortgage rule requirements, the loan is declined. An experienced doctor in Oklahoma with a substantial income wants to move his family to a neighborhood with better schools. Though he has been practicing for several years, he just purchased his own practice. Now, without a two-year history of self-employment income, he can’t qualify for long-term mortgage financing. Another homeownership dream dashed by inflexible regulation. There are plenty more stories where those came from. In fact when the American Bankers Association recently asked bankers to share examples of the most troublesome regulations, with an emphasis on how the rules affected their customers, bankers did not disappoint. A bank in New Mexico has stopped offering mobile home secured loans, because its customers would not observe the homeownership counseling requirement. An Idaho banker reported the frustration of ag customers who are being told they must purchase flood insurance on low-value sheds and barns located on their property. A Colorado banker noted how his bank worked with a recently retired engineer with substantial liquidity and a generous, albeit time-limited pension. A good credit risk yet, thanks to overly prescriptive rules, the man had to ask his 75-year-old father to cosign the loan. These are powerful stories. In fact, most stories are powerful. That’s because, despite the tremendous advancements in communications technologies, storytelling remains the most effective way to make a point. Members of Congress believe it, too. In fact, three VIPs speaking at ABA’s Government Relations Summit in March ‒ Rep. Jeb Hensarling (RTexas), who chairs the House Financial Services Committee, Sen. Sherrod Brown (D-Ohio), ranking member of the Senate Banking Committee, and Rep. Kevin McCarthy (R-Calif.), who holds the second most powerful post in the House ‒ all advised bankers seeking regulatory relief to “tell their stories” to their lawmakers. Hensarling and McCarthy also stressed the importance of talking with members of both parties. The legislative solutions we seek require bipartisan support to be enacted. Rather than telling your story to an official who already knows you and appreciates what you do, tell it to the freshman representative or to the legislator who fears one or two practical legislative fixes could lead to the unraveling of the Dodd-Frank Act. Our first instinct when asked to talk about our industry’s regulatory burden might be to talk about how much time and money compliance is costing banks. That’s a legitimate grievance that reveals an essential economic truth: Money spent on paperwork is money that can’t be spent in loans that bring growth and prosperity. But dry economic arguments don’t pack nearly as much punch as stories about how a customer couldn’t buy a home or expand her business. Analogies help, too. I have tried to explain banks’ regulatory burden to reporters by telling them if restaurants had to expend as much human and financial resources on compliance as banks do, the food you eat wouldn’t taste very good. Colorful analogies and anecdotes resonate more than plain facts. Narratives are more memorable than PowerPoint slides. If you’ve heard me speak, you know that I believe this. I practice what this column is preaching. If you want to see meaningful regulatory relief ‒ or a level playing field with credit unions and the Farm Credit System, or more accountability for retailers involved in data breaches ‒ share your stories with your lawmakers when you write or meet with them. Communicating effectively and memorably about our policy priorities will help us achieve them. t The Value of Telling Stories About the Author Frank Keating was named president and chief executive officer of the American Bankers Association in 2011. His appointment followed seven years of service as president and CEO of the American Council of Life Insurers and after serving two terms as governor of Oklahoma. Keating’s 30-year career in law enforcement and public service included stints as an FBI agent, U.S. attorney and state prosecutor, and Oklahoma House and Senate member. Author of three award-winning children’s biographies, he earned an undergraduate degree from Georgetown University, a law degree from the University of Oklahoma and is the recipient of five honorary degrees. The author can be reached at: fkeating@aba.com.
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