consider myself very blessed to grow up as a third-generation community banker. Around my house growing up, we could never plan a family vacation over the second Tuesday of the month because that was the day of the board meeting. As a young teenager, I learned how to run the proof machine, be a teller, file checks, clerk farm sales and even repo vehicles and equipment (I’m sure no child labor laws were violated!). I got used to hearing the old timers say, “I got my very first loan from your grandpa …,” etc. According to KBA records, at one time, there were over 1,300 bank charters in Kansas. Of course, many banks did not survive the Great Depression, and after branch banking laws came into existence in the 1980s-1990s, that number declined to around 625 bank charters. As mergers and acquisitions have continued to take place, combined with a significant increase in regulatory burden, the number of Kansas bank charters has now decreased to 206. Back in my grandfather’s day, banker engagement with legislators and regulators was predominately limited to the bank President. Federal and State politics, with respect to banking, were not as highly partisan and polarized as they are today. Grandpa’s legislative engagement typically consisted of enjoying a cigar while barbecuing chicken with his U.S. or state representative when they were in town, where they would discuss issues related to banking. Numerous trips to Washington, D.C. or Topeka were not typical. Although community banks did face significant regulatory and legislative challenges, such as regulation of deposit interest rates, anti-competition and insider laws, the heads of the bank regulatory agencies were not highly political, and their CHAIRMAN’S MESSAGE Mark Schifferdecker, KBA Chairman REDEFINING ENGAGEMENT AKA “This Ain’t Your Grandfather’s Engagement!” efforts primarily focused on bank safety and soundness. Acronyms such as BSA, CRA, HMDA and DFA were not a thing. The Production Credit Association and Farm & Home Administration (aka Farm Credit) pretty much stayed in their lane as a lender of last resort. Of course, the average community bank in Kansas back in my grandfather’s day looked much different than today. For instance, in 1960, GNBank’s (aka The Girard National Bank) total assets were $2.7 million, which consisted of $1.2 million in total loans and $1.6 million in non-interest bearing demand deposits. The most complex technology in the bank was a two-pocket proof machine, and all transactions were manually posted to ledger sheets. Just as our community banks have significantly evolved since my grandfather’s day, so must our engagement and advocacy for community banks! We cannot be passive, assuming it is solely the bank CEO, the KBA or ABA’s job to be engaged on the issues. Rather we need to have all of our bank officers, staff, board and even our customers actively engaged in order to ensure our country continues to enjoy the most dynamic and diverse banking system in the world. I believe the stakes have never been higher. The polarization of our political system seems to be rapidly growing. Wellmeaning legislators on both ends of the political spectrum might react to an issue like ESG by introducing bank legislation that results in significant unintended consequences damaging small businesses, farmers and our state and national economy. The heads of federal banking agencies seem to approach the duties of their office in somewhat of an “activist” role to accomplish specific agendas of the administration by which they were appointed. I 6
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