Inside Financial Services

From the Head of the ICBA, More Crazy Talk

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ICBA head Cam Fine, railing yet again about the big banks:

Financial meltdowns and taxpayer bailouts, imprudent lending and operational practices, and regulatory indifference from too-big-to-manage and too-big-to-jail managements are all symptoms of the too-big-to-fail disease. And we certainly can’t overlook unnecessary and counterproductive regulatory burdens that fall disproportionately on community banks. [Emph. added]

That’s rich. The “unnecessary and counterproductive regulatory burdens” that has Fine so addled largely came about as a result of Dodd-Frank, a law that Fine and the ICBA supported. In return, he got some exemptions for community banks related to the CARD Act and CFPB oversight. That’s some brilliant legislative strategizing, as now scores of Fine’s own members are under such a severe regulatory burden that they’re essentially no longer viable over the long term.

I’ve long been puzzled about why Fine has it in for the big banks the way he does.  There are many policy areas where the interests of the big banks and community banks align. Lobbying over Dodd-Frank is a good example. You’d think he’d spend more time denouncing what’s a much more ominous threat to community banks’ natural turf: credit unions. I may be wrong, but I can’t recall an instance that he’s ever had a bad word to say about them.

Memo to Cam: your campaign against the megabanks is entirely wrong-headed. Even if the big banks were broken up as you’ve been lobbying for, foreign banks would step in to serve the needs of large global customers. Community banks would gain little. For the sake of your members, you ought to be aiming your fire elsewhere.  I have a suggestion.

What do you think? Let me know!

One Response to “From the Head of the ICBA, More Crazy Talk”

  1. ringleader

    Fine’s position regarding the big banks is more of a bad hangover from the days when the big guys decided to steal market share from the community banks by taking a scorched earth approach to retail banking. Going away from predictable monthly service fee income to “free” checking, nailing everyone who overdrafts and causing the little guys to have to follow. Then, the big guys decided to give away financial technology tools like internet and mobile banking, making it nearly impossible for small banks to recoup their comparatively huge investments to deliver these services. Then, the largest banks brought down the ire of Congress and the likes of Elizabeth Warren, resulting in Dodd-Frank, the CFPB and a hyper-critical FDIC regulatory crew. While I believe you are right that the proper fight would be to level the playing field with credit unions on the taxation field, I can understand – to a certain extent – the ICBA’s fixation on its larger brethren.

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