20 Hoosier Banker April 2016 This past December, after years of waiting by bankers, members of the House Agriculture Committee finally brought in representatives from the Farm Credit Administration for the agency’s first oversight hearing in more than a decade. It was a chance to ask some long-overdue questions about the Farm Credit System’s abuse of taxpayer benefits in financing such non-farm-related activities as loans to telecom giants and chain restaurants. The hearing was held after FEATURE repeated calls from the American Bankers Association and the state associations for more responsible management of a governmentsponsored enterprise that has far exceeded the intended scope of its mission for far too long. While we rightfully counted this hearing among our year-end victories, we also acknowledged that this is just one step in an ongoing battle to achieve a fair and level playing field for banks. It’s a battle that extends beyond 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. From Farm Credit to Fintech: The Case for Leveling the Playing Field the Farm Credit System to other competitors that are getting a leg up from the government. The National Credit Union Administration, for example, continues to confuse its role as regulator with that of a cheerleader. In recent months, it has approved a dramatic expansion of credit unions’ business lending powers and issued a wildly expansive membership proposal that, combined, make credit unions tax-exempt banks. The agency’s actions are nothing short of an end-run around Congress, where bankers have succeeded in making credit unions’ legislative wish list too controversial to touch. Other competitors may be getting a less visible, but almost as powerful, boost from regulators’ passivity, not activity. I’m referring to the fact that our regulatory structure and rules have not kept pace with the rapid emergence of financial technology products, or “fintech.” Fintech has dominated headlines in almost every major financial publication in recent months as countless new payment, lending and investment innovations have flooded the market, backed by billions of dollars of venture capital. It represents an area of great opportunity for us ‒ already, we’re seeing banks beginning to partner with these providers in new and innovative ways. But we must be mindful that the emergence of this
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