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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