I read with interest the perspectives offered to the membership of the Texas Bankers Association by its chief paid executive, “Someone has to be lying!”, and 2010 volunteer Chairman, “Did you get a carve out?”, in the current issue of Texas Banking magazine (August 2010). Both offered rather dramatic observations of the recently passed Dodd/Frank bill and its likely effect on community banks and the industry as a whole. More specifically, the authors elected to confuse bankers with the notion that the Independent Community Bankers Association of America (ICBA) and (by inference) its state affiliates (including IBAT) were to blame for the bill’s harmful provisions by engaging and negotiating in the political process rather than standing with TBA in total opposition to the bill.
Assertions were made that the final bill was made worse by the industry being divided relative to positions important to community banks, and had the industry only spoken clearly with “one voice” a far better outcome would have likely been achieved. To both I say, “hogwash.”
Big banks and community banks aren’t a house divided; they are two different houses. However, when placed under the same roof, they do become the proverbial house divided.
No one would argue the fact that the final bill that passed contained many harmful provisions to banks both large and small. But to suggest that the best strategy for the entire industry was to disengage and oppose does a disservice to the very bank members they purportedly represent, and hides the true issue of the very real dilemma that any conflicted membership trade association has today…that is, it is impossible to serve two masters. The truth is that many community bank friendly provisions of the measure could not be supported by these organizations lest they be seen as favoring one contingency of their membership over another.
This industry conflict was not newly discovered with the introduction of the Dodd/Frank financial reform bill. It was recognized some thirty-six years ago when 254 forward looking, progressive community bankers organized the Independent Bankers Association of Texas. They realized that, as the industry continued to evolve, the political and regulatory interests of the community banker would not be fairly represented, yielding instead to policy positions of the large national and regional banks. After all, they concluded, the day would come when some large dues paying financial institution votes would be more equal than others.
And boy, were they spot on. It has been played out hundreds of times in the halls of the Texas Legislature and United States Congress since that time and it will again.
I for one am proud to work for an organization where black is black and white is white. We don’t have to second-guess positions on important pieces of legislation. We do not have to look over our shoulder and wonder if we are picking winners and losers in our own ranks or disengage from the process because of conflicted interests. We do speak forcefully with a single voice…the community bank voice.
IBAT’s founding fathers did not create this organization to sit idly by and watch the community bank franchise erode over time. That commitment is shared by the many IBAT volunteer leaders who give selflessly of their time and talents and it is the cornerstone of the principles we embrace today and tomorrow.
I am not one to tear down someone else’s house to make mine look bigger. I don’t have to. A house divided cannot sustain itself over time. It will collapse on its own.
