* Community bankers urged to remain politically involved
* Told Dodd-Frank not set in stone
By Dave Clarke
BOSTON, Oct 20 U.S. community bank executives,
fearing a loss of influence in Washington, will start pressing
members of Congress personally rather than relying on their
The tactic is part of an industry effort to roll back parts
of the recently enacted Wall Street reform law, known as
Dodd-Frank -- legislation that overhauled regulation of the
banking industry after a financial crisis that drove the global
economy into recession.
"Political engagement is a job requirement for every
banker," Arthur Johnson, chairman and CEO of United Bank of
Michigan, told fellow bankers gathered for the American Bankers
Association's annual meeting. "Political advocacy is not a
Bankers from across the country gathered in Boston for a
conference that was part pep rally and part therapy session for
an industry reeling from the economic downturn and fearing new
requirements under Dodd-Frank.
Community bankers and their lobbying groups hardly sat on
the sidelines during consideration of the Dodd-Frank Act,
signed into law in July. They were able to blunt its impact in
several areas by securing exemptions from some requirements for
institutions with $10 billion or less in assets.
But executives of these smaller banks said their influence
has waned, due in large part to the public relations beating
the industry as a whole took during the crisis. Bank bosses,
not just lobbyists, now need to get involved with Washington
and counteract what they call unfair attacks against industry.
"The danger is -- and the reason we must be engaged is --
that it is so easy to put more regulations on the regulated and
the regulated are such a small part today of the full delivery
of financial services," said Stephen Wilson, chairman and chief
executive officer of LCNB National Bank in Lebanon, Ohio, and
the new ABA chairman.
Wilson, in an interview, said bankers' goals on Dodd-Frank
should be to "strengthen those parts we like, roll back those
parts we don't like, roll back those parts that are harmful to
REPUBLICANS 'GET IT'
That's a message that will likely have more currency in
Washington after the November elections, in which political
handicappers increasingly see Republicans taking control of the
House and making solid gains in the Senate.
Wilson may find himself in a particularly good spot since
one of the representatives from the area served by his bank is
John Boehner, who is poised to lead the House of
Representatives should Republican take control of that chamber
of Congress. Wilson noted another representative from his area
is conservative Jean Schmidt.
"The good news is they get it, but they did not have the
ability to make as much of an impact as we had hoped," he said,
referring to the Dodd-Frank Act.
The ABA, which represents both large and small institutions
in the $13 trillion banking industry, tried to ease executives'
worries, telling them that the fight over Dodd-Frank is not
"Rule number one with regard to anything Washington is
nothing is ever finished there, nothing is ever permanent,"
Wayne Abernathy, executive director for financial institutions
policy at ABA, told a small group of bankers.
"Rest assured the Dodd-Frank Act is not done. It will be
reformed and reformed and reformed again as the years go
forward," he said.
Bankers expressed concern about the new Consumer Financial
Protection Bureau, curtailment of the Office of the Comptroller
of the Currency's ability to preempt state banking laws, and a
mandate for the Federal Reserve to crack down on how much banks
can receive in fees each time a debit card is used.
During consideration of Dodd-Frank, Congress did take steps
to ease its impact on banks with $10 billion or less in assets.
For instance, the crackdown on debit card fees as well as many
of the new powers given to the Consumer Financial Protection
Bureau would not apply to smaller banks.
But bankers at the conference were skeptical about how much
that exemption would be worth, arguing rules for big banks will
affect them as well. For example, it would be difficult to have
a debit card system that allows smaller banks to charge
retailers more per transaction than larger banks, they said.
(Editing by Gerald E. McCormick)