A Word On Behalf Of Your Oppressed, Neighborhood Banker

Campaign fundraising literature can be fun to read, particularly if you belong to the wrong audience for the message. I absconded with a message meant for bankers:

The banking industry continues to be under assault in both Sacramento and Washington, D.C. Bankers need a voice in the political process. This is especially critical in the current economic and political environment.

That's where California Bankers Association's Political Action Committee (CBA Federal PAC - formerly known as CALBANKPAC - and CBA State PAC) come in - to protect us from misguided public policies and unfair laws that not only affect the way [we] conduct business, but the extent to which our business and community grow and prosper.

CBA PAC's act as the collective voice of hundreds of California bankers - combining small and large contributions from banks and bankers and allocating these contributions to carefully chosen candidates who support our banking system.

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Credit union members and consumer activists are mobilizing their powerful grassroots organizations to advance their interests. The banking industry is their target, and we need to fight back.

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With your support, the banking industry can have an even greater voice in today's critical public policy debates.

Well, bankers DO have some clout in our governmental capitals. All that TARP money, for example, went into their coffers. Still, bankers feel invisible, under appreciated, perhaps even a bit powerless. There are sharks on every side.

There was some accompanying literature to the fundraising letter:

The stresses and strains placed on the banking industry in California by federal decision makers are increasing in dramatic fashion. All these decisions are taking their toll and the future of the industry hangs in the balance. More must be done to educate decision makers on your industry's concerns and perspectives, but few are answering the call. California's bankers must understand that getting more involved, whether that is through developing relationships with key lawmakers through California Bankers Association's grassroots program or supporting appropriate candidates through contributions, it is not about doing the right thing or pitching in to help your industry. It is about the survival of our industry from the political and regulatory storm that threatens its vitality.

Make no mistake: Getting more involved in the political arena is a business necessity. Each and every year, our political opponents work long and hard to put the banking industry on the chopping block. Every year, a non-bank competitor seeks to take away part of our market; a politician proposes a way to make banks pay more than their fair share; and every year more and more burdensome regulations are proposed under the guise of "consumer protection."

For a greater understanding of where banks rank in the political landscape consider that the banking industry is consistently outspent by other major industries when it comes to PAC money spent on California congressional and Senate races.

There was a bar graph on the pamphlet showing that while banks contributed almost $4 million in 2008 PAC contributions to California representatives, insurers contributed $8 million and realtors more than $10 million. So, if the phone system in a typical California representative's office lights up, with a realtor on line 1, an insurer on line 2, and a banker on line 3, guess whose calls go directly to voicemail? No wonder bankers feel so isolated!

So what do bankers feel is so wrong with things these days?

In the last several years, Congress has proposed to:

• Restrict the way creditors use consumer credit reports or credit scores when making a decision about setting an individual's annual percentage rate;
• Increase notification requirements and prohibit change in terms to a customer credit card contract;
• Impose price controls and regulate the terms for electronic payment system contracts;
• Prohibit financial institutions from assessing an overdraft protection fee to cover any check or debit for which there are insufficient funds, unless the consumer gives his/her specific written consent and the fee is separately and conspicuously disclosed each time the fee is imposed, even at ATM and point of sale terminals.
• Also is a concern is the interest in changing existing pre-emption authority. Efforts to end federal pre-emption are likely to continue. If pre-emption is overturned, national banks would be subject to hundreds of consumer protection laws in California and differing laws in other states, which would triple current compliance costs.

But the real coup d'grace is:

• Astonishingly, regulatory costs account for 12 to 15 percent of banks' non-interest expense. The American Bankers Association estimated that bank CEOs (in the aggregate) spend more than 5.5 million hours per year on compliance.

Now, I thought that maybe since many banks these days are doing little more than sit on their TARP money, rather than lending it out to small businesses, that maybe the CEOs had plenty of time for other things, like preparing quarterly reports for regulators. But what do I know?

So, say a small prayer for your oppressed, harrassed neighborhood banker: your undervalued, overridden, outspent, overworked, outhustled neighborhood banker. May they once again command the heights of the economy, and steal away those precious seconds of California-representative time from realtors and insurers (whom I'm sure have no real problems of their own).