A One-Two Punch


Banding together, ICBA and state community banking associations are delivering a broad-based grassroots advocacy message to Congress

By James Richter and Tim Cook

It was a valuable opportunity, and a request from an influential lawmaker. Rep. Maxine Waters (D-Calif.), the new ranking Democratic member on the U.S. House Financial Services Committee, approached ICBA this past spring to organize an informal sit-down meeting to talk with community bankers in her home state.

Waters, a veteran, liberal Democratic lawmaker with a long history of bellicose confrontations with big-bank executives, said she wants to reach out as part of her new leadership post on the committee. She wants to learn more about the everyday operations and concerns from the Main Street side of the banking world. Recognizing the Golden State’s opportunity—with a powerful legislator in Washington—to shine a light of more understanding, ICBA turned to its grassroots expert in the field, the California Independent Bankers, for help.

David Haithcock, CIB’s executive director, helped organize the meeting. An informal roundtable gathering with 10 community bankers from around the area was scheduled at Malaga Bank in Water’s Los Angeles district. A bit gingerly at first, the bankers shared real-world stories about how community banks continue to invigorate their local economies and support the financial dreams of families and small businesses. But the bankers also spoke honestly about formidable obstacles emanating from Washington, including costly and micromanaged regulatory red tape and hypercritical bank examinations.

Open and sympathetic to community bankers’ personal stories and viewpoints, Waters pledged to use her new position in Washington—when she could—to speak out for and support Main Street community banks. The meeting was successful, Haithcock says; Waters and the community bankers developed lots of common ground and mutual understanding.

“One of the [bankers] I was kind of worried about in the beginning actually stood up at the end and said, ‘You being here gives us hope that something can be done,’” Haithcock recalls.

While ICBA is involved in ongoing, daily advocacy for community banks at the federal level, ICBA’s State and Regional Partner banking associations are working with ICBA to play an important advocacy role in engaging and educating policymakers in Washington as well. Combined with the direct, personal efforts of community bankers, the combination of federal and state association representation is part of the grassroots groundswell that is most effective in reaching all of the diverse power players on Capitol Hill and throughout Washington, says Joe Schneider, ICBA’s vice president, state relations.

From Maine to Texas to Ohio to Florida and all the states in between, those State and Regional Partners associations have successfully been rallying their congressional delegations this year to support pro-community bank legislation that ICBA has been promoting. Efforts by those state associations have generated greater awareness and support on Capitol Hill for the game-changing legislation that ICBA has backed to impose stricter equity capital requirements on the largest financial firms, the Terminating Bailouts for Taxpayer Fairness Act of 2013 (the TBTF Act). Their home-state efforts have been instrumental in gaining key congressional sponsors for bills that are part of ICBA’s legislative platform to provide community banks target regulatory relief, dubbed the Plan for Prosperity.

In a joint message issued in June, ICBA and 46 state and regional community banking associations called on Congress to advance various Plan for Prosperity bills to ease excessive regulatory burdens on community banks, which would promote a regulatory environment that will help community banks fully serve their communities.

“It’s crucial to articulate a clear, common-sense message to lawmakers and regulators in Washington,” Schneider says. “Community bankers speaking out on issues are a vital part of ICBA’s advocacy effort, but ICBA’s work with 39 State and Regional Partner associations across the country remains important in amplifying that national message.”

Going to the statehouse

The industry’s national message is being carried successfully to Washington directly from the grassroots of Oklahoma. Whenever representatives of the Community Bankers Association of Oklahoma (CBAO) call on Rep. Frank Lucas (R-Okla.), chairman for the House Agriculture Committee and a member of the House Financial Services Committee, the congressman is always ready to hear them out.

“He’s a good friend,” Craig Buford, CBAO’s president and CEO says of Lucas. “When we’re in his office, the key thing is we may be taking him the national message, but we also have his constituents sitting there in his office looking at him and asking for his support.”

For the past three years, Buford and community bankers at the CBAO brought the state’s banking commissioner, Mick Thompson, with them on their advocacy trips to Washington. Thompson was a longtime community banker and a former Oklahoma state representative. He also sits on the board of the Conference of State Bank Supervisors. Accompanying Oklahoma community bankers to the ICBA Washington Policy Summit this past spring, he provided a powerful personal endorsement of both the TBTF Act and the Plan for Prosperity to the Sooner State’s congressional delegation members.

“When you’ve got a bunch of community bankers saying we’re overregulated, that can be looked at one way,” Buford says. “But when you’ve got one of the top regulators in your state sitting there saying that our community banks are overregulated, that adds a whole new level of credibility to our discussion.”

Another powerful statement was made by CBAO and its members when Oklahoma’s community bankers returned home from Washington: CBAO’s board of directors promptly met and passed a resolution endorsing the TBTF Act and the Plan for Prosperity. Going a step further, the association asked state Rep. Charles McCall, former CBAO chairman, to introduce a resolution in Oklahoma’s state legislature expressing support of the TBTF Act and its regulatory relief provisions for community banks.

The resolutions from CBAO’s board and the Oklahoma statehouse were forwarded to Oklahoma’s two Republication U.S. senators, Tom Coburn and James Inhofe, to focus their attention on the Senate-born legislation. “This type of action sends a powerful message that this issue has received broad support from state-level legislators, many of whom are part of the core leadership of the political party within the state,” Schneider says. “This has helped capture the attention of those senators.”

Over in the neighboring Lone Star State, Chris Williston, president and CEO of the Independent Bankers Association of Texas (IBAT), also understands the importance of state banking associations working with ICBA to promote community-banking issues in Washington. “We really rely on ICBA to quarterback all of the issues for us in D.C.,” he says.

Since Congress enacted sweeping Wall Street reform legislation three years ago, Williston and IBAT have been working with ICBA to promote a range of legislation for community banks to Texas lawmakers, including most recently the TBTF Act and Plan for Prosperity bills. “We spend a lot of time [in Washington], because we have so many Texans in positions of leadership,” Williston explains. “It really has helped, I think, the efforts of ICBA.”

One of those Lone Star State leaders is Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee. “Jeb has been a great friend, someone whom we can talk the issues through with and debate the issues and ask his help,” Williston says. “He’s historically been enormously helpful, and now that he’s in a position of leadership we feel like we play a pivotal role in moving not only a lot of the regulatory relief provisions and the Plan for Prosperity, but also a solution to too-big-to-fail.”

That local perspective that all state community banking associations bring to Washington is invaluable to ICBA’s national advocacy efforts. “It sends a message to their representatives of what their constituents feel and believe,” Schneider says.

Citing dual associations

Some creative community bankers have been leveraging their affiliations with both ICBA and their state’s community banking association to more effectively share the community banking message with their members of Congress in Washington.

Tom Borner, president and CEO of Putnam Bank in Putnam, Conn., makes a point to meet with his state’s federal lawmakers often when they’re back home in Connecticut. He enjoys holding fundraisers for his state’s elected officials in his home. When he does, Borner, a member of ICBA’s Large Community Bank Council, says he reminds his lawmakers of his leadership with both ICBA and the Connecticut Community Bankers Association (CCBA).

“All politics is local,” Borner says, repeating the famous phrase from Tip O’Neill, the late longtime Boston congressman and one-time speaker of the House.

Borner hosted a fundraiser this summer for Sen. Chris Murphy (D-Conn.), and, as always, he invited other community bankers, including his friends at the CCBA. Such district events provide an opportunity to communicate the industry’s solidarity at the local and national level, he says. “We talked about independent community banking needs—the fact that we need a voice in Washington—and how Sen. Murphy can be an advocate for community banks,” Borner says. “I had my ICBA talking points with me.”

When community bankers unite and gather together in a lawmaker’s home district in a personal, informal setting, the community banking message tends to resonate more effectively, Borner says. District gatherings sometimes get more advocacy dual punch with CCBA and ICBA, he adds.

“Nobody out there I’ve seen is really against community banks,” Borner says. “They all see the important roles we play in our communities. The more we have that message out there as to how these various regulations affect us as community banks, the better. And keeping that [unified national and state] message out there on a constant basis can only build the relationships from there.”

Taking it the people

Some creative community banking associations have been taking community banking’s story to venues outside of bank offices and lawmaker’s conference rooms, too. Don Hole, executive vice president and CEO of the Community Bankers of Iowa (CBI), embraced such an opportunity at the Iowa State Fair.

Last year, the CBI hosted the first-ever State Fair Conference. It attracted more than 100 community bankers and their directors, who were given tickets to the Iowa State Fair—a nice incentive for those bringing their families. Four out of the five Iowa representatives in Congress attended the conference, at one point sitting together on a discussion panel of banking issues that covered regulatory burden, congressional gridlock, spending deficits and too-big-to-fail—all in response to questions from community bankers. Breakout sessions included regulator panels, director focused sessions and a presentation by a representative from the Consumer Financial Protection Bureau.

The Iowa State Fair, Hole points out, “is a major piece of Iowa culture” that draws over a million people every year. It also happens to take place in August, when members of Congress are back home on recess. “Here was an opportunity to gather an entire delegation and give our membership an opportunity to visit with them.”

Other featured guests participating in the conference included Iowa Gov. Terry Branstad, Iowa state lawmakers and Paul Merski, ICBA’s executive vice president for congressional relations and chief economist.

The second annual State Fair Conference sponsored by the CBI takes place Aug. 13. Hole has already received commitments from Branstad and Iowa’s lieutenant governor, Kim Reynolds, as well as several congressional members and state lawmakers. Ron Haynie, executive vice president–mortgage policy at ICBA, is slated to speak this year as well.

“We think the combination of a state association and a national association like ICBA is the most powerful combination for focused advocacy for community banks,” Hole says.

James Richter is a writer in Chicago. Tim Cook (tim.cook@icba.org) is ICBA senior vice president, publications.x