The following is from Rob Barrett, chairman of the Missouri Bankers Association. This column appeared in the September 2017 issue of The Missouri Banker.
I had hoped to write something about the start of football and Mizzou’s great start, but that isn’t happening. So, I’ll jump in with some thoughts on our upcoming Washington visit and regulatory burden, which is best summed up by President Ronald Reagan.
I have wondered at times what the Ten Commandments would have looked like if Moses had run them through the U.S. Congress.
Before I dive too deep, let me first say thank you to all who attended our regional meetings and participated in our programs. I do appreciate the time and effort each of our regulators took and their candor in the responses to our questions. I’m also very grateful for each of our sponsors and their ongoing support of our association and our programs. But particularly, I’m indebted to Chuck Brazealle who took the time and effort to attend every meeting. But, there’s more to that story. The truth is that because Chuck is kinda retired, Ina Rae can only put up with him underfoot so much, so she kicked him out. He had to go somewhere! Thank you, Chuck!
There were several quality topics discussed in our meetings, and our whole world is watching our congressional leadership, so I’ll continue to dwell on some of Max Cook’s points on his federal update. I don’t disagree with his “3P” approach because dealing with our legislators can be so frustrating. It is essential that we continue to be Passionate as we work toward some regulatory reform. If we don’t, quite frankly, our elected officials will “fight bigger fires” or “grease squeakier wheels.” Only with Persistence will we Prevail (That’s my fourth P; don’t let Max claim it.). The battle does require Patience, I know. But, let’s not let them Procrastinate and allow their Pace to be an excuse. Their Performance in this session is Preferred. That’s enough.
On another point, we’ve spoken before about added HMDA data fields and even some HMDA-like data to be gathered on small business loans. It took me five regional meetings, but this legislator speaking point finally hit me. Before we take the time and effort and expense to provide Washington with any more data, how about them making use of the facts already available to them?
Consider and remember these four examples.
- CFPB Proposed Disclosure of Overdraft Fees
“The bureau also published a report on ‘frequent’ overdraft users, which was found to be a low percentage of consumers. The report concluded, unsurprisingly, that frequent overdraft users have lower credit scores and opt-in to overdraft protection at a rate 2.5 times higher than for other consumers.”
- CFPB Arbitration Rule
The bureau’s own study found arbitration has significant benefits over litigation for the consumer. Consumers receive, on average, $5,389 in arbitration as compared to $32.35 in litigation. Cost of resolution is dramatically decreased over litigation, keeping costs down for all consumers.
- Credit Unions
Nearly 75 percent of the tax subsidy goes to fewer than 5 percent of credit unions — the 281 credit unions above $1 billion in assets. These large, aggressive credit unions operate well outside the original congressional intent and directly compete with tax-paying banks, which distort the markets. Banks are now serving a higher number
of low to moderate-income households than credit unions, and only 8 percent of credit union mortgages go to low-income borrowers. The required common bonds of membership to a credit union have loosened so much so that 10 million new members were added in the last four years alone.
- Farm Credit System
In 2015, less than 12 percent of all FCS loans went to young farmers, less than 15 percent to small farmers and less than 16 percent to entry-level farmers and ranchers.
As we speak to our legislators on the Washington trip or back home in our districts, I believe we should deliver this message.
We’ll provide more data, more statistics, more information if we are required to do so. But understand this — analyze it, study it, digest it until Chuck’s cows come home, but you better use it. When you do, better decisions will become obvious.