Pub. 11 2014 Issue 1

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S 10 “ Don’t hesitate to share your thoughts on what rules work, what don’t and what can be done to make things better as we move ahead. ” A Case Study in Effective Advocacy Gov. Frank Keating, PRESIDENT and CEO American Bankers Association L ife in the post-Dodd-Frank era has left many a banker feeling helpless. The 2010 law continues to spew new regulations, and the most a bank compliance officer dares hope for is a month or week without a new rule, addendum or guidance. Few, I ’m guessing, would imagine that any k ind of rule reversal is possible in the current environment. But what ABA and others learned during one long month this winter is that with effective ad- vocacy, positive change can happen. Regulators are, indeed, willing to change their minds – and their rules – when presented with a compelling case. The experience I am referring to is the battle over the final Volcker Rule regulation’s treat - ment of trust preferred securities. The Volcker Rule may not have been on community banks’ radar screen when the reg- ulations were under development. They were, after all, intended to ban proprietary trading – something that most smaller institutions do not engage in. But ABA has long been concerned that all banks suffer collateral damage when Wash- ington takes aim at large banks. That concern proved valid in December when final Volcker regulations came out that would have forced many banks – large and small – to suddenly write downmillions in trust preferred securities held in collateralized debt obligations and take severe hits to capital. Bank investments in TruPS CDOs do not pose a systemic threat and had no business being WASHINGTON UPDATE