Fine Points: Ready to Rumble
By Camden R. Fine, President and CEO of ICBA
Life is unpredictable. It’s constantly throwing wicked curveballsand generating random bounces. Here in Washington,everyone competes in a free-for-all scrum, operating from different playbooks—and occasionally from different rulebooks written on the run.Almost anything can happen.
As the new 113thCongress gets underway this month,ICBA, predictably,has another full and varied agenda it’s pursuing for the nation’s community banks. But that agenda can’t include the unforeseeable events that inevitably happen. That’s how our industry’s emergency over the Basel III capital standards erupted early last summer.
Back then the Consumer Financial Protection Bureau’s mortgage-lending proposals were keeping ICBA extremely busy. Congress also had ICBA running as it considered extending the Transaction Account Guarantee program, held hearings on the Wall Street Reform Act, tried to pass a farm bill, and toyedtoo carelessly with legislation to greatly expand credit-union business-lending authority.
Then,literally overnight,everything dramatically changed. Regulators announced a major policy twist—that their Basel III capital standard proposals would apply to all banks, not just to the largest, internationally active megabanks at which the proposals had been originally and always aimed before.Without warning, the guidelines morphed from a nonissue into one of the most grievous threats to the nation’s community banks in recent memory.
But recognizing the emergency, ICBA and community bankers mobilized. Stressing how Basel III was designed through and through to address megabank risks, ICBA set out to exempt community banks with $50 billion or less in assetsfrom the Basel III rules altogether. Responding to ICBA’s alerts, you flooded regulators with urgent emails and letters explaining the seriousbut overlooked repercussions that the one-size-fits-all proposals would unnecessarily create. ICBA leaders and staff also appealed directly to regulators in one-on-one meetings.
To gain powerful support, wemade Congress take notice. Through your emails, phone calls and meetings, we prompted a bipartisan response of lawmakerswriting to regulators as well as holding hearings. Using every pressure point available, we also energetically reached out to the local and national press and the public. We tweeted and wrote letters, op-edsand columns. Weconducted reporter briefings and interviews, and placed targeted ads in Capitol Hill publications.
Finally, as a big exclamation mark to an overwhelming number of comment letters filed by community bankers, ICBA delivered to regulators a petition signed by nearly 15,000 community bankers supporting our call for a community-bank exemption from Basel III.
Without question, we made our point. On Nov. 12, the regulators announced they were postponing a planned Jan. 1 implementation of Basel III due to the overwhelming number of comment letters they received. Some top regulators have publicly conceded some of our key arguments. Consensus in Washington says the community-bank exemption has a strong chance and,at a minimum,regulators should at least modify their proposals to significantly address community bankers’ concerns. Time will tell.
Regardless of who says what, ICBA and community bankers achieved results no one thought possible.Time and again, community bankershave beaten extremely long political odds in Washington. The word is out—no matter the odds, the momentary score or the time on the clock, don’t count community bankers out.
ICBA knows the unexpected can happen at any time. We’re prepared to mobilize, we even expect it. That’s how life works in Washington, but working together we’ll always be ready to rumble.