20 Hoosier Banker February 2016 FEATURE You know that when Congress turns our industry into a piggy bank to pay another industry’s costs and then ignores bankers’ pleas for relief from stifling, ill-fitting regulations, something is wrong ‒ not just with our political system, but also with our industry’s political firepower. I’m referring, of course, to the twin insults Congress lodged in its waning days of its 2015 session. First, to cover the costs of the five-year highway spending bill, lawmakers chose not to raise the gas tax or find some other related source of funds. Instead it opted to dramatically decrease the dividend the Fed pays member banks with more than $10 billion in assets, while simultaneously raiding the Fed’s capital surplus account. Perhaps to soften the blow, Congress also included a handful of regulatory relief items that bankers, the American Bankers Association and state bankers associations have been advocating, in some cases for years. But the presence of modest reg relief in the bill does not make up for the dangerous precedent it set by using banks to pay for highways and bridges. After all, the relief provisions, such as eliminating annual privacy notices for banks that don’t change their policies, had strong bipartisan support. Congress could have ‒ and should have ‒ passed on its own, not as a quid pro quo. But Congress is so plagued by dysfunction that it can pass little but spending bills. Which leads me to insult No. 2. After months ‒ years, even ‒ of bankers explaining how outdated and poorly tailored rules were choking credit and making things harder for bank customers, leaders in Congress had a chance to do something about it. They could have attached meaningful regulatory relief provisions ‒ ones that had already been vetted by both the Senate and House banking committees ‒ to its omnibus spending bill. But they chose not to. While the reasons are many, including the need to woo votes from staunch defenders of Dodd-Frank, one should be enough to startle all of us into a new way of thinking about political engagement: Congress saw no downside in kicking banks around. That has to change. Banking is a hugely consequential industry. We fuel the economy by About the Author Robert S. Nichols is president and chief executive officer of the American Bankers Association. He joined the ABA in August 2015, following 10 years of service as president and CEO of the Financial Services Forum, a non-partisan financial and economic policy organization. Prior to joining the Forum, Nichols was assistant secretary of the Treasury for Public Affairs, a position requiring confirmation by the U.S. Senate, and he also oversaw the Office of Public Liaison. Nichols is a recipient of the Alexander Hamilton Award, the highest honor of the U.S. Department of the Treasury. Previously Nichols’ career highlights included service as communications director for the Electronic Industries Alliance; as a senior aide on Capitol Hill, where he was communications director to U.S. Sen. Slade Gorton and Press Secretary to the late Congresswoman Jennifer Dunn; and in the West Wing as an aide in the Office of the Chief of Staff in the George H.W. Bush administration. Nichols serves as a member of the board of trustees of the National Presbyterian School and as vice chair of the board of directors of Food Allergy Research & Education (FARE). He is a graduate of The George Washington University. The author can be reached at: nichols@aba.com. Time for Political MuscleBuilding
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