Rob Nichols Forward-looking leader of the ABA HB HOOSIER BANKER MAGAZINE indianabankers.org PLUS! FLD Focuses on the Future MAY / JUNE 2018
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Help Us Tell Your Story Examples of Stories to Tell – • Programs that support nonprofits • Financial literacy outreach • Scholarships and other educational opportunities How the Campaign Works – • Contact Laura Wilson at 317-333-7146, lwilson@indianabankers.org • Arrange filming with IBA, or send in your own video (production guidelines available) • Share with the community through IBA social media and other communications The story of banking is a good-news story of caring and commitment. Please join in this inaugural IBA Community Commitment Campaign, and help us tell your story! The Indiana Bankers Association is launching an IBA Community Commitment Campaign to help share the news of member banks’ commitment to community. This video campaign is your opportunity to “tell your story” of banking. 8425 Woodfield Crossing Blvd., Suite 155E, Indianapolis IN 46240-7321 / indianabankers.org / @indianabankers IBA Community Commitment Campaign
4 MAY / JUNE 2018 MISSION To advocate for and sustain an environment in which banks can succeed. VISION To provide exemplary service to members as the premier state bank trade association in the country. VALUES In fulfilling our mission, we will: n Maintain the highest ethics, integrity and respect for others; n Serve with professionalism, innovation and resourcefulness; n Instill passion, positive attitude and enthusiasm; n Remain mindful that the success of the IBA is judged by the success of its members. Publication Disclaimer Hoosier Banker (ISSN 0018 473X) is published bimonthly by the IBA Service Corp., a subsidiary of IBA Holding Company Inc., that is a wholly owned subsidiary of the Indiana Bankers Association. All material published in Hoosier Banker or on the IBA website is the property of the Indiana Bankers Association. Contact Us To contact any team member of the Indiana Bankers Association staff, either send an email or call 317-387-9380. Email addresses are the first initial of the staff person’s first name, plus last name, plus “@indianabankers.org.” Example: jdoe@ indianabankers.org. For Hoosier Banker article submissions, advertising or other magazine needs, please send emails to HB@indianabankers.org. IBA BOARD OF DIRECTORS IBA Officers Chairman ............................................................................ Clay W. Ewing, German American, Jasper First Vice Chairman........................................................................Andrew J. Briggs, Bank of Geneva Second Vice Chairman..................................... Lucas White, The Fountain Trust Company, Covington Immediate Past Chair ........................Annette M. Russell, Security Federal Savings Bank, Logansport President and CEO ......................................................Amber R. Van Til, Indiana Bankers Association Constituent Directors ICBA State Director ........................................Michael H. Head, First Federal Savings Bank, Evansville ABA Membership Council ..........................................Michael K. Bauer, WesBanco Bank, New Albany Future Leadership Division President ..........................................................Kirby Drey, Kentland Bank Non-Indiana Headquartered Bank Director....................... Tim Massey, BMO Harris Bank, Indianapolis Northeast Region Directors Jeffrey W. Gump ........................................................................Farmers and Merchants Bank, Laotto Michael C. Rechin ................................................................................First Merchants Bank, Muncie Michael S. Zahn .....................................................................First Federal Savings Bank, Huntington Northwest Region Directors Benjamin J. Bochnowski ................................................................................Peoples Bank, Munster Joseph D. Carlson ..................................................................... Community State Bank, Royal Center Arden L. Cramer ......................................................................................... Logansport Savings Bank Southeast Region Directors Archie M. Brown Jr. ............................................................................ First Financial Bank, Cincinnati George W. Ferriell ......................................................................................................Bath State Bank Gregory Inman ...................................................................Scottsburg Building and Loan Association Southwest Region Directors Matthew W. Howrey .......................................................................................North Salem State Bank Kent L. Parisien ................................................................................ The First National Bank of Odon Jamie R. Shinabarger ...................................................Springs Valley Bank & Trust Company, Jasper FUTURE LEADERSHIP DIVISION BOARD Kirby Drey, President .................................................................................................... Kentland Bank Melodie K. Yarnell, Vice President......................................................Jackson County Bank, Seymour Emily Boardman ........................................................................................ Crossroads Bank, Wabash Scott Carr .............................................................................................First Savings Bank, Clarksville Jessica Carroll ............................................................The New Washington State Bank, Charlestown Michael J. Clampitt .......................................................................................North Salem State Bank Jason L. Ernst ............................................................................First Financial Bank, NA, Terre Haute Brock C. Goggins ........................................................................................German American, Jasper Ryan Hart ......................................................................................................Lake City Bank, Warsaw J. Daniel Maddox ...............................................................................Citizens State Bank, New Castle Kristin Marcuccilli ..........................................................................................STAR Bank, Fort Wayne Jon-Myckle D. Price .........................................................Security Federal Savings Bank, Logansport Jeremy Siegle ...........................................................................................................Bank of Wolcott Crystal Taylor-Baker ..............................................................................Old National Bank, Evansville Billy Winter ..........................................................................................Bippus State Bank, Huntington IBA STAFF President and CEO ................................................................................................... Amber R. Van Til Executive Vice President ..................................................................................Paul W. Freeman, CAE Senior Vice President - Government Relations ...................................................................Dax Denton Vice President - Meetings & Events ...........................................................Christina M. Bennett, CMP Vice President - Products & Services ................................................................................. Rod Lasley Vice President - Education & Training ...........................................................................Laurie A. Rees Vice President - Communications................................................................................... Laura Wilson Executive & Government Relations Coordinator ........................................................ Joshua A. Myers Events & Products/Services Assistant..............................................................................Susan Clark Education Meeting Coordinator .....................................................................................Marcy Borden Education Meeting Coordinator .................................................................................... Elizabeth Kilty Staff Accountant..............................................................................................................Timothy Fry Technology Manager ....................................................................................................... Tracy Kubly Administrative Assistant ...............................................................................................Michelle Long DIRECTORS & STAFF
Hoosier Banker 5 CONTENTS Vol. 102 No. 3 8425 Woodfield Crossing Blvd., Suite 155E Indianapolis IN 46240-7321 317-387-9380 @indianabankers Publisher: Amber R. Van Til Editor: Laura Wilson Advertising: Rod Lasley Submit materials to: HB@indianabankers.org Copy deadline: First of the month preceding publication. Advertising: Rates available at indianabankers.org. Advertisers should reserve space by the first day of the month preceding publication, and submit artwork by the fifth of the month preceding. Hoosier Banker advertising is available to members and associate members of the Indiana Bankers Association only. Subscriptions: Hoosier Banker subscriptions are provided free of charge to members and associate members of the Indiana Bankers Association. Public access to HB Digital is available at indianabankers.org. About Hoosier Banker: Award-winning Hoosier Banker magazine is the flagship publication of the Indiana Bankers Association. Its subscriber base includes all banks and thrifts headquartered in Indiana, IBA-member banks headquartered out-of-state, and IBA associate members. HOOSIER BANKER MAGAZINE indianabankers.org Robert S. Nichols is president and CEO of the American Bankers Association. The July/August Hoosier Banker is to feature Rebeca Romero Rainey, president and CEO of the Independent Community Bankers of America. COVER STORY 10 Rob Nichols Forward-looking Leader of the ABA ARTICLE SPOTLIGHT 16 FLD Focuses on the Future Joshua A. Myers, IBA FEATURES 6 Vantage Viewpoints Amber R. Van Til, IBA 7 Chairman’s Report Clay W. Ewing, German American Bancorp Inc. 8 Board Review Gregory Inman, Scottsburg Building and Loan Association 9 IBA Calendar of Events 18 Goodbye, Farewell and Thank You Camden R. Fine, ICBA GR SUMMIT 17 2018 Legislative Session Dax Denton, IBA PSP SHOWCASE 20 Knowledge Is Power Rod Lasley, IBA 22 Group Health Benefit Options Stephen James, IBA Group Insurance Trust INDIANA BANK & THRIFT STOCK UPDATE 24 Review as of March 31, 2018 Michael A. Renninger, Renninger & Associates LLC COMPLIANCE CONNECTION 27 Safe Deposit Box Acess Priority Brett J. Ashton, Krieg DeVault LLP DIRECTORS / SENIOR MANAGEMENT 28 Can Your Portfolio Play Defense? Lester Murray, The Baker Group 32 Deposit Strategy Steve Kinner, Promontory Interfinancial Network; Scott Hildebrand, Sandler O’Neill + Partners; and Dave Koch, Farin & Associates HUMAN RESOURCES 30 Sexual Harassment Debra A. Mastrian, SmithAdmundsen LLC 40 Bringing New Grads on Board Jeff Kelly, OnCourse Learning OPERATIONS / TECHNOLOGY 44 Payments Disruption Robert Jarosinski, Bankers’ Bank DEPARTMENTS 21 Anniversary Milestones 25 In Memory of 25 IBA Employees of the Month 25 Taking It Easy 26 From the Board Room 33 Banking Center News 34 Associate Members’ Corner 36 Banking on Community 42 Honorable Mentions 46 Bankers on the Move 50 Advertisers Index
6 MAY / JUNE 2018 Amber R. Van Til President and CEO Indiana Bankers Association avantil@indianabankers.org @grbanker VANTAGE VIEWPOINTS Finally, we’ve made it to the month of May! It’s been a long wait, but often the best things in life are worth waiting for. They’re also worth preparing for, and preparation is very much a theme these days at the Indiana Bankers Association. As I’ve been writing about recently, your IBA team has been working diligently on a new strategic plan for the next three years. And what a plan it is. In my most recent column, I indicated that our new strategic plan has five pillars. Bit by bit, we’ve been shaping the details of these pillars to convert them from lofty ideas into robust action plans. Below is a quick recap, but I invite you to click on the icon at right in HB Digital to access a detailed brochure, or visit the web link provided: 1. Tell the Story – We will “tell the story” of banking through traditional and social media to raise public awareness of banks’ good deeds in support of the communities they serve. 2. Fiscal Strength –We will enhance IBA fiscal strength through efficiency, transparency, establishment of clear fiscal policies, and exploration of new streams of revenue. 3. Education – We will expand educational opportunities by engaging in new delivery channels and leveraging technology to meet the diverse needs of IBA members. 4. Government Relations – We will strengthen our collective voice by enhancing grassroots lobbying outreach and by increasing member support of the Indiana BANKPAC. 5. Next-Gen Bankers – We will engage with the next generation to invite the best and the brightest into the industry, and to retain top talent in Indiana banking. These are only starting points. The real effort comes from mapped-out action plans complete with goals, measures, timeframes and accountability. I have been cautioned that the full, detailed version of this plan borders on being overly ambitious, but consider this: The IBA has 100 percent participation of Indiana-based banks, substantial reserves, continued advocacy victories, unparalleled educational offerings, and a talented and tenured staff. Anything less than ambitious would be inconsistent with what our members have come to know and expect. I am confident that we can and will uphold the high standards of our new strategic plan, thanks to capable professionals in the Indiana banking community. From member bankers to service providers to elected officials, we are surrounded by quality in every direction. We also have the benefit of support from both national bank trade associations. You’ll note that our cover story in this issue features Rob Nichols, president and CEO of the American Bankers Association. In the next issue, we plan to feature Rebeca Romero Rainey, new president and CEO of the Independent Community Bankers of America. Additionally I’d like to guide your attention to a touching farewell column on page 18, authored by Cam Fine, retired ICBA president and CEO. He has led the industry to many victories during his tenure, and we thank him for his able leadership. One final note on the topic of leadership. Recently I served on a leadership panel at a women’s conference, hosted by the Indiana Society of Association Executives. A question I was asked was, who is a female leader I admire? My answer was simple: my mother. Throughout my life, my mother has led by example through her fortitude, confidence and professionalism. She has also consistently modeled the equally important traits of kindness, caring and compassion. This May, as we celebrate Mother’s Day, I’ll enjoy the day as a mom, blessed with healthy, happy sons. But I’ll treasure the day as the lucky daughter of Mrs. Judy Moore, who I am honored to call my mother. HB To view a brochure detailing the IBA Strategic Plan, click on the hand icon in HB Digital, or go to: indianabankers.org/about. IBA Strategic Plan Annual Washington Trip Sept. 30-Oct. 2 Join the chorus, and make your voice heard at our nation’s capital. FLD Leadership Conference Oct. 15-16 Emerging bank leaders come together for networking, leadership-building and inspiration. Banking on Women Conference Nov. 13-14 Women in banking gather to unlock potential, build confidence and own the future. Don’t Miss Out! Save the Dates for These IBA Events
Hoosier Banker 7 Clay W. Ewing Chairman Indiana Bankers Association President, Chief Banking Officer and Secretary to the Board of Directors German American Bancorp Inc., Jasper CHAIRMAN’S REPORT The winds of change have been blowing, and they’ve been blowing in the right direction. Think back to where we were, legislatively, just a couple of years ago, and look where we are now. Not so long ago, we were being stymied with excessive regulations enacted in response to the financial crisis of 2008. The “fix” of the Dodd-Frank Act placed undue regulatory restrictions on the depository, tax-paying banking industry, which had become the scapegoat for problems caused by non-depository institutions. The Dodd-Frank Act, 2,300 pages in length, resulted in 400 new rules and mandates, placing disproportionate regulatory burden on small-town community banks. As a result, from the time period of July 2010 to January 2017, the number of U.S. banks fell by nearly 2,000, according to the American Bankers Association. Within that same time span, only seven new banks were chartered in the entire United States. But times are changing. S. 2155 – the Economic Growth, Regulatory Relief, and Consumer Protection Act – passed the Senate in a stunning example of bipartisanship. The Indiana banking community thanks Senators Joe Donnelly and Todd Young for their support of this important legislation. At this writing, S. 2155 is poised for a House vote. While this legislation doesn’t erase all ills of the Dodd-Frank Act, the majority of its provisions are directed toward community banks by reducing cost-prohibitive rules that never were intended for them. This is critical, as the Independent Community Bankers of America estimates that 98 percent of banks nationwide are community banks, with assets under $10 billion. These institutions are critical to our economy, funding more than 60 percent of small-business loans and over 80 percent of agricultural loans. Another development on the Dodd-Frank front: House Speaker Paul Ryan made news on April 12, when he announced that he will not be seeking re-election. He made news again the next day, when he pledged to see through the repeal and replacement of the Dodd-Frank Act. It remains to be seen whether his intent becomes reality, but the talk alone is indicative of a changing political landscape. Another sign of shifting winds is that Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, has been calling on Congress to make changes to the Dodd-Frank Act that would establish accountability for the bureau. His recommendations include subjecting the CFPB to the congressional appropriations process, giving Congress the power to approve major rules, making the director position answerable to the president, and creating an independent inspector general for the bureau. On the state level, our IBA Government Relations Team experienced another successful year at the Statehouse. Though our short-session year was extended by Gov. Holcomb to include a special session, preceding the original March 14 deadline, the banking community saw the passage of several bills helpful to the industry. Your GR Team also was instrumental in helping to implement amendments to bills as needed, and in helping to prevent the passage of bills that would have been harmful to the economic wellbeing of Indiana. See Dax Denton’s column on page 17 for details, and be sure to attend at least one regional meeting this summer for updates. Finally, though times are good, let’s be sure to be ready to speak up when needed. As my fellow IBA board member Greg Inman notes on page 8, “Everything can be reversed in due time.” That’s why advocacy never stops. HB IBA-member bankers provided helpful testimony about the value of S. 2155. Below is a sampling of quotes provided: “Many houses in rural Indiana are modestly priced, and we have had to deny several loans because they fell below our minimum loan amount. Consumers who wanted to buy those houses were forced to buy the properties on contract or seek financing from unregulated entities, denying them the protections they would have had if they borrowed money from a community bank.” - Lucas White, president of The Fountain Trust Company, Covington “Our bank received a mortgage request from a client who recently sold his business on contract. Since the cash flow history from this contract sale was less than two years old, we could not count this as income. Because of the QM rules, approving this loan under these conditions would have exposed the bank. We had to decline the loan. Prior to the QM rules, this deal would have been approved, without question.” - Larry W. Myers, president and CEO of First Savings Bank, Clarksville “Presently we find ourselves spending more time in the office, reviewing regulations, than out in the field with customers. We are losing potential revenue, while adding to our costs to remain compliant. Worse, our agricultural community is missing out on potential growth opportunities, because our loan officers are spending more time in the office than out with potential new customers.” - George W. Ferriell, president and CEO of Bath State Bank NOTABLE QUOTES
8 MAY / JUNE 2018 Thank you for the opportunity to serve on the board of directors of the Indiana Bankers Association. It is an honor. My banking career officially began fairly recently – five years ago, when I joined Scottsburg Building and Loan Association as a vice president. Two years later, I was named CEO and president. Prior to banking, I had been an attorney, practicing law for 17 years. Additionally I served as a county chief deputy prosecutor during a majority of my legal career. It is not a standard career path for a banker. I first gained accounting experience as an undergraduate at Indiana University. After graduation, I moved to Chicago to work for the former Arthur Andersen. As a 22-year-old, it was fun to live and work in downtown Chicago, but I was eager to go to law school. After about a year I moved to Indianapolis to attend the IU Robert H. McKinney School of Law. Law school was a bit of a diversion for me, since I’m more of a math person, but I did enjoy it. The law degree led me into the general practice of law initially, then into working as a deputy prosecutor. My position was more quasi-political, because I was appointed, not elected. Even so, my appointment did hinge on whatever party was in control at the time. It was never a major concern, but it was nice when I left that field to not have to think about it every four years. I’ve always liked math and finance, so I decided to continue my education and get an MBA at IU-Southeast, attending evening classes while working. After earning that degree in 2004, I continued practicing law. In 2010, I joined the board of directors of the Scottsburg Building and Loan Association as an associate member. Though I wasn’t a voting board member, the experience gave me a chance to observe and learn about banking. My background in both accounting and law made me comfortable in that role, particularly with regard to the regulatory environment. In 2013, when I was asked to join the bank full-time, I was ready to welcome a career change. By that time I had practiced law long enough to be willing to take a chance, so I joined the bank. I had the good fortune to work under Wayne Deveary, my predecessor, for almost two years, as he transitioned into retirement. The other inducement to join the bank was the staff in place. We have experienced very low turnover through the years, and with a small staff that produces many benefits. They never cease to amaze me with the knowledge they have accumulated with experience and their ability to adjust to a changing banking environment. Needless to say, they have made the transition much easier for me. The responsibilities as CEO in today’s banking environment can be challenging, as the business/regulatory framework seems to be under continual change. I am not sure if it is my age, or the lawyer that still resides in me, but I enjoy the challenge. When I was asked to join the IBA board, I was honored to accept. Over the past few years, I’ve gotten to know several bankers who served at the board level, and I thought it would be a chance to become more involved and broaden my horizons. I also wanted to learn more about the Association and how it operates. With the IBA, I feel I always have somebody to call. Having the IBA staff available to learn about options, whether product-related or training, is a valuable asset for a small community bank. The IBA and the avenue it creates to allow bankers throughout the state to develop relationships is something that is invaluable. I have found other bankers to be more than willing to answer questions and provide guidance. On the political front, I appreciate the expertise of the IBA Government Relations Team. We currently are enjoying an environment that favors regulatory relief, but we are all well aware that everything can be reversed in due time. There will always be a need to be vigilant. Growing up 15 miles from the IU-Bloomington campus, I had the good fortune of many positive influences. My mother worked at the IU Foundation for 27 years, so the campus was just a normal part of life and made my undergraduate choice rather simple. My maternal grandparents lived nearby, and I was fortunate to have the opportunity to spend a lot of time with them, as well. I was blessed with a wonderful family who taught me the value of hard work and the importance of an education. My grandfather loved math and economics, and he took every opportunity to take the time and have the patience to share. He always stressed the importance of an education and the doors it could open and, just as important, he would gently remind me on occasion, “If you are going to spend your time doing something, spend your time doing it right.” Being part of the IBA board has been another bright spot in a fulfilling life and career path. I work with a great team, and I have pastimes I enjoy, including golf, reading and travel. I look forward to the experience of serving on the IBA board and the years I will spend sharing the banking journey with the people of Scottsburg Building and Loan. HB BOARD REVIEW Gregory Inman Southeast Region Director Indiana Bankers Association CEO, President and Secretary Scottsburg Building and Loan Association IBA Cybersecurity Conference This annual conference is ideal for bank associates responsible for cybersecurity, fraud, IT planning, information security, budgeting and compliance. Click on the icon at left in HB Digital to register, or go to indianabankers.org/education-events. Carmel OCT. 45
Hoosier Banker 9 View full calendar and register online at indianabankers.org/education-events, or click on the icons above in HB Digital. IBA Center for Professional Development | 8425 Woodfield Crossing Blvd., Suite 155E | Indianapolis, IN 46240 | 317-387-9380 & EVENTS CONFERENCES CLASSROOM INSTRUCTION ONLINE LEARNING Convene and connect at signature IBA events. Build knowledge via webinars or on-demand. Learn with peers in a classroom setting. Calendar of Events CALENDAR UPDATE Community Bankers for Compliance Series - Regulation Z: TRID, Including Changes Effective Aug. 1, 2018 May 14 • The Landmark Center • Fort Wayne May 15 • IBA Center May 16 • IBA Center Risk Management Officer Forum May 17 • IBA Center Senior Retail Banking Forum May 17 • IBA Center Regulation Z University May 30-June 1 • IBA Center 2018 HMDA Essentials June 5 • IBA Center Chief Financial Officer Forum June 5 • IBA Center • Group 1 June 8 • IBA Center • Group 2 CRA Essentials June 6 • IBA Center Senior Lender Forum June 6 • IBA Center • Group 1 June 7 • IBA Center • Group 2 IBA Leadership Development Program: Session 2 - Do Something That Scares You June 6-8 • Wooded Glen Retreat and Conference Center • Henryville Commercial Lending School June 11-15 • IBA Center Workshop for Loan Assistants June 14 • IBA Center Essentials of Banking: Session 2 - Business Operations and Management June 19 • IBA Center BSA/AML Compliance School June 20-21 • IBA Center Marketing Directors Forum June 26 • IBA Center IT and Operations Officer Forum June 27 • IBA Center • Group 1 June 28 • IBA Center • Group 2 HR Directors Forum July 17 • IBA Center Lenders Comprehensive Guide to Mortgage Lending July 18-19 • IBA Center Cybersecurity Basics for Non-Technical Bank Management July 19 • IBA Center Analyzing Personal Financial Statements and Tax Returns July 24 • IBA Center Community Bankers for Compliance Series - Session 3 Aug. 6 • The Landmark Center • Fort Wayne Aug. 7 • IBA Center Aug. 8 • IBA Center Bank Directors Workshop Aug. 13 • The Landmark Center • Fort Wayne Aug. 14 • Wooded Glen Conference and Retreat Center • Henryville Aug. 15 • IBA Center Compliance for Mortgage Loan Processors Aug. 14 • IBA Center IBA Leadership Development Program: Session 3 - Limitations Are Self-Imposed Aug. 15-17 • Wooded Glen Retreat and Conference Center • Henryville Branch Management Series: Session 3 - Growing the Retail Branch Aug. 21 • IBA Center BSA Officer Forum Aug. 22 • IBA Center Advanced Branch Management Aug. 23 • IBA Center Essentials of Banking: Session 3 - Safeguarding the Bank and Customer Service Aug. 23 • IBA Center CECL Workshop Aug. 27 • Landmark Center • Fort Wayne Aug. 28 • Huntingburg Event Center Aug. 29 • IBA Center Deposit Account Administration Sept. 5-6 • IBA Center Advanced Agricultural Credit Conference Sept. 5-6 • Location TBD Call Report Update Sept. 6-7 • IBA Center IBA Annual Convention Sept. 9-11 • French Lick Resort Risk Management Officer Forum Sept. 13 • IBA Center Advanced Credit Analysis School Sept. 13-14 • IBA Center Mortgage Lending School Sept. 18-20 • IBA Center Certified Banking Cybersecurity Manager Certification Class Sept. 19-20 • IBA Center Flood Insurance Essentials Sept. 23 • IBA Center IBA Annual Washington Trip Sept. 30-Oct. 2 • Washington, D.C. BSA/AML Compliance Seminar Oct. 3 • IBA Center Senior Retail Banking Forum Oct. 4 • IBA Center IBA Cybersecurity Conference Oct. 4-5 • IBA Center Chief Financial Officer Forum Oct. 9 • IBA Center • Group 1 Oct. 12 • IBA Center • Group 2 Senior Leader Forum Oct. 10 • IBA Center • Group 1 Oct. 11 • IBA Center • Group 2 FLD Leadership Conference Oct. 15-16 • The Alexander • Indianapolis Community Bankers for Compliance School Oct. 15-19 • IBA Center
10 MAY / JUNE 2018 COVER STORY Rob Nichols Forward-looking leader of the ABA On Jan. 1, 2016, Robert S. Nichols became president and CEO of the American Bankers Association. His predecessor, Frank Keating, had been at the helm of the ABA for five years. In Keating’s farewell magazine column, which ran in Hoosier Banker in December 2015, he wrote of Nichols: “I have known Rob for several years and can vouch for his stellar credentials, policy background and established relationships with policymakers – all of which will serve you and our industry well.” In the two-plus years since being named ABA president and CEO, Rob Nichols has consistently provided much-admired leadership. On the political front, from tax reform to regulatory relief to bipartisanship in a competitive environment, the legislative tone has been improving for the industry. Some shifting of policy has been allowing banks opportunity to more fully serve their customers and communities. Nichols is well versed in legislative issues, from a variety of viewpoints. Before joining the ABA, he served for 10 years as the head of the Financial Services Forum, a nonpartisan financial and economic policy organization. Prior to that experience, he was assistant secretary of the Treasury for Public Affairs, a position requiring confirmation by the U.S. Senate. Other career highlights include service as communications director for the Electronic Industries Alliance; as communications director to a U.S. senator and as press secretary to a U.S. congresswoman; and in the West Wing as an aide in the office of the chief of staff in the George H.W. Bush administration. Outside of the ABA, Nichols dedicates his leadership skills as vice chair of the board of directors of Food Allergy Research & Education. He also has been named a recipient of the Alexander Hamilton Award, the highest honor of the U.S. Department of the Treasury. Nichols is a graduate of The George Washington University, and he claims salmon fishing as a favorite pastime. In the following Q&A, Nichols contributes his views and insights to the readers of Hoosier Banker: What are your responsibilities as president and CEO of the American Bankers Association? “My role is to ensure that ABA continues to provide the resources and advocacy banks need to remain competitive – as the financial services provider of choice – well into the future. That means looking around corners This issue’s cover story featuring Robert S. Nichols, president and CEO of the American Bankers Association, is the first in a two-part series highlighting leadership at the national bank trade associations. The upcoming July/August issue of Hoosier Banker is to feature Rebeca Romero Rainey, president and CEO of the Independent Community Bankers of America.
Hoosier Banker 11 and putting on our high beams to see what’s down the road, and then preparing for those challenges, whether it’s fintech innovations, demographic shifts or regulatory demands. “At ABA, we do that by both engaging with, and listening to, our members who represent all sizes of banks and a variety of organizational forms and business models. Many of those bankers serve on our committees and councils, and they help inform our very deep bench of talented staff members about key industry issues. Our diverse banker membership and our staff – together – drive the development of ABA’s advocacy and solutions. “In this regard, our goal is deceptively simple and singular in focus. We’re here to help banks of all sizes – and by extension their customers and communities – to thrive.” What are recent legislative victories on Capitol Hill? “We’ve been part of a number of industry advocacy wins. We responded swiftly to the Consumer Financial Protection Bureau’s anti-consumer arbitration rule, urging Congress to use its powers to negate the rule, while also filing a lawsuit with others to stop it in court. Three months later, the rule was successfully overturned in Congress, and I was honored to attend the White House signing ceremony. “The tax reform law reflected ABA’s persistent advocacy for lower business tax rates that would be good for PHOTO CAPTION: Rob Nichols joined the American Bankers Association in 2015, shortly before transitioning to president and CEO.
12 MAY / JUNE 2018 our members, the communities they serve and the broader economy. Just as important, ABA aggressively opposed provisions that would have harmed the industry and our customers, while seeking improvements in provisions of concern to our members. “Changes to deferred compensation plans, the complete elimination of net interest deductibility and a bank tax did not make it into the bill, thanks to ABA efforts. And improvements to provisions on pass-through organizations – affecting about one-third of all banks – resulted in more favorable rate levels. “Before the ink was dry on the new law, we were working with regulators and FASB to address some of the tax accounting consequences of the law, while simultaneously promoting the ways banks of all sizes were planning to share the benefits of their reduced tax rates with employees, customers and communities. “Of course, more recently, bipartisan regulatory reform has advanced through the Senate and, at this time, we’re hopeful the House will also enact targeted, commonsense reforms. This has long been an industry-advocated goal.” Where is future progress needed? “We need more action – both legislative and regulatory – that moves us toward ‘tailored regulation.’ ABA believes that government policies should recognize the industry’s diversity. “That means laws and regulations should be tailored to correspond to a bank’s charter, business model, hometown markets and risk profile. This is a policymaking approach that avoids the negative economic consequences of burdensome, unsuitable and inefficient bank regulation. “We also will continue to highlight the disparity between tax-paying banks and the tax-advantaged credit union industry and the Farm Credit System. On credit unions, we’ve just won on two of four counts in our lawsuit challenging the National Credit Union Administration’s expansive field of membership rule adopted in 2016. We’re pursuing a level playing field outside the courts, as well. “The letter Sen. Orrin Hatch (R-Utah) sent to NCUA in January was groundbreaking. He questioned whether credit union activities were in keeping with their federal tax exemption, and ABA and the state associations continue to draw attention to it. “We also continue to be very pleased that numerous tax experts are weighing in on the relevance – or lack thereof – of credit unions’ tax exemption. “Regarding the Farm Credit System, we will continue to point out the significant tax and funding advantages those institutions continue to enjoy – advantages that should be reconsidered, given the system’s mammoth size and loss of mission focus. “It’s important to note that the recent $1.3 trillion spending legislation, which funds the government through the end of the fiscal year on Sept. 30, among other things, addressed the so-called ‘grain glitch.’ This tax reform provision would have tilted the playing field toward grain cooperatives over investor-owned companies, and might have expanded Farm Credit System market share, if not corrected. “There’s much more that we’re working on. Take a look at our ‘Blueprint for Growth’ that’s on aba.com/Blueprint. It’s our plan for sustained, industry-led economic growth and prosperity that was developed by bankers for America’s banks.” How can bankers engage effectively in grassroots advocacy? “It begins with that first step, which is contacting lawmakers, whether it’s a letter, email or phone call. Admittedly, this can be a big step for some, but the more you engage, the easier it can and does become. “The worry for someone who doesn’t know their representative or senators may be that they won’t want or have the time to talk with you, or that they won’t agree with you. But here’s the thing: Lawmakers are there because they were elected to serve their constituents. They want to hear from bankers, who are indeed leaders in their communities and states, because you know what can help their district or state thrive. “What bankers do and what they know makes their opinions and support highly valued. Start with a phone call; follow up with an invitation for the lawmaker to come to the bank and meet employees, customers or both. The relationship will grow organically from there. “At ABA, we’re looking to continue to grow bankers’ political engagement at all levels of the industry. That’s why we hired Rob Engstrom as our chief political strategist. “Rob has extensive experience in political operations, and he now oversees the critical components of ABA’s political engagement operations: the Voter Education Fund, BankPac, grassroots and the critically important ABA-State Association Alliance. He is working with his team, as well as with the state bankers association executives, on an overarching political strategy aimed at improving the policy environment for America’s banks.” What are upcoming opportunities in banking? “Banking is undergoing rapid change. Fintech innovations are helping banks – and our industry’s competitors – do more and reach more customers. Traveling to Indiana for the occasion, Rob Nichols spoke at a dinner honoring Joe DeHaven (left), retired CEO of the Indiana Bankers Association. Continued on page 14.
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14 MAY / JUNE 2018 “We are focused on providing banks with strategic insights and solutions through resources like our Fintech Playbook, which analyzes digital technologies at all levels and in all areas of the business: channels, lines of business, and bank platforms and processes. We’ve supplemented that with several white papers on topics like blockchain, regtech APIs and Zelle.” What do you most enjoy about your work? “This is a fascinating, challenging time for America’s banks. On the political side, we’re beginning to see the return of bipartisanship to banking policy issues. That, along with the engagement and leadership of bankers, the state bankers associations and our national trade associations, has pushed commonsense regulatory reform almost over the goal line. “The bipartisanship required to do that has been remarkable, and reassuring. Working together, we can and will get things done. “Our industry – made up of banks in “The opportunity for banks is to pair such innovations with traditional bank strengths: knowing their customers and providing personable service. Millennials and future generations who grew up in the era of Venmo and Uber have different expectations of their banks – and may even need to be persuaded that a bank is necessary. That’s both a challenge and an opportunity. Well versed in advocacy, Rob Nichols is passionate in supporting the banking industry. Indiana and other states across the nation – is enormously consequential. Banks are at the center of commerce, the center of economic growth and the means by which people reach important financial goals. That makes the work we do on behalf of banks incredibly meaningful. “It also means we have a great story to tell, and I appreciate the chance to help share it and change some of the misconceptions and myths about banks.” What influences guided your career development? “I’ve always had an interest in public policy, so I’m a long-time student of how Washington works. It’s important to have a variety of experiences, so I’ve benefited greatly from having worked on the Hill and in the executive branch under President George W. Bush as a Treasury assistant secretary. Each job prepares you for the next, if you listen and learn.” What was key leadership advice that you received? “It’s hard to think of one single, über piece of advice that answers this question, but there are three sentiments that have stuck with me for years. “First, be thick-skinned and mission-focused. That means keep the long game in mind, and don’t get distracted by ‘noise’ from your opponents. “Second, just like the title of the Tim McGraw song, always be humble and kind. Life is too short to deal with prima donnas. Don’t be one. “Finally, help those coming up. Today’s intern is tomorrow’s boss. Take time to mentor the next generation of leaders.” HB F C I Floodplain Consultants Inc. "We visit the site!" www.floodplain.com TM PREFERRED SERVICE PROVIDER OF THE IBA. Serving Indiana lenders since 1991 HOW IS YOUR FLOOD ZONE DETERMINATION PROVIDER HANDLING BORDERLINE CASES? Flood Zone Determinations LOMA/LOMR Assistance Flood Insurance Guidance Interfacing with: Encompass 360, Calyx Point, Byte Pro & Fis-Serv We take pride in our industry leading accuracy and customer service. Find our what a true “community bank” minded company we are. Craig Callahan 800-945-0246 ccallahan@ oodplain.com Rebeca Romero Rainey, president and CEO of the Independent Community Bankers of America is the scheduled cover story profile of the July/August Hoosier Banker. She was named to the ICBA leadership position effective May 5, upon the retirement of Camden R. Fine. In the Next Hoosier Banker –
KEEP MOVING FORWARD 2018 SHAREHOLDER SYMPOSIUM Grand Rapids Michigan August 28, 2018 Indianapolis Indiana August 21, 2018 Our members are the center of everything we do, and we are fully invested in your success. That’s why, each year, we strive to keep you updated and informed on what’s happening in our changing marketplace. Our symposiums are an opportunity to join colleagues, FHLBank Indianapolis staff, and industry professionals to discuss key topics affecting your business. Success results from understanding the current business environment and identifying opportunities to help you Keep Moving Forward. Our three keynote speakers will focus on opportunities within: THE ECONOMY BLOCKCHAIN TECHNOLOGY CHANGING DEMOGRAPHICS Learn more about this year’s Shareholder Symposium and registration information, including our early bird special and group rate discount, at fhlbi.com/symposium. JOIN US AT THIS YEAR’S SHAREHOLDER SYMPOSIUM
16 MAY / JUNE 2018 The Indiana Bankers Association is in the thick of a strategic planning mission, as IBA staff works jointly with the board of directors to formulate a three-year plan to further elevate the Association’s offerings for members. This strategic planning process has involved much discussion and debate, as every IBA function is evaluated to determine how to achieve maximum effectiveness into the future. Throughout the last several months of discussion, one key concept that has continuously emerged is how the IBA will serve the needs of the next generation of bankers. As current bank leaders near retirement age, the need for up-and-coming bank leadership is vital to the long-term health of the banking industry. This is one of the most important influences on the successful future of the banking industry, and the IBA board recognizes this. As a result, emphasis has been placed on developing future leaders within all areas of banking, instead of focusing only on future bank presidents and C-suite employees. With this goal in mind, several concepts have been discussed to develop all levels of the next generation of banking. Several years ago, the IBA created the Future Leadership Division, a section of the Association, to cultivate emerging professionals within the Indiana banking industry by providing networking, volunteer and educational opportunities. Today, more than ever, the IBA Future Leadership Division is a vital component of the Indiana banking community and a major force in the Association’s future. The IBA is fortunate to have a group of young bankers who have stepped up to serve on the IBA Future Leadership Division board. These bankers are providing valuable input on the needs of future bank leaders. Their ideas are also helping to shape the strategic plans of the IBA. With over 200 members, the Future Leadership Division will be instrumental in coming years to assist in various IBA initiatives, such as promoting the story of banking to the general public, recruiting high school and college students to banking internships, advocating for banking initiatives in legislative arenas, and more. While the Association works to strengthen Indiana’s banking community for the future, please note that the IBA Future Leadership Division is available to all IBA members who are personally motivated to be a leader and who have a drive for a long-term career in banking. Because leadership is vital in every level of the bank, the FLD is not exclusively for the next bank president or CEO, but for any banking professional in any department of the bank. Bankers are encouraged to apply for membership in the FLD to take advantage of networking opportunities, educational offerings and a chance to become an active part of banking’s future. The IBA, with the assistance of the Future Leadership Division board, is currently working to enhance FLD offerings to provide structure for emerging bank leaders and opportunities to grow in today’s banking environment. FLD events include networking lunches, scheduled to take place during the month of August in Fort Wayne, Jasper, Lafayette and Columbus. In addition, the FLD’s marquee event, the FLD Leadership Conference, is scheduled for Oct. 15-16 at The Alexander hotel in Indianapolis. Sign up for the FLD, mark your calendars for these upcoming FLD events, and become a leader at any level of Indiana banking. HB FLD Focuses on the Future By developing future bank leaders Article author Joshua A. Myers Executive & Government Relations Coordinator Indiana Bankers Association jmyers@indianabankers.org @joshmyersIN About the FLD To learn more about the IBA Future Leadership Division, click on the hand icon in HB Digital for details – including a membership list and online application – or go to: indianabankers.org/future-leadership-division. ARTICLE SPOTLIGHT
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