Thursday, December 8, 2022

Executive News: Well, now what?

As this issue of the Oklahoma Banker goes to press, the November elections are over. Sort of. But I still want to see some key numbers and results that will help me have a better understanding of the lay of the (new) political landscape.

Photo of Roger M. Beverage
Roger Beverage, OBA President and CEO

At the state level, we know most of our key new players – almost all of whom are going to be generally friendly with and supportive of your business.

Governor-Elect Stitt has some great, new ideas for our state, and I’ve been one of his biggest supporters. Additionally, he recently purchased a bank in Cherokee.

Lt. Governor-Elect Matt Pinnell is also a good friend of your industry.

AG Mike Hunter, Insurance Commissioner Glen Mulready and our new treasurer (and former House Banking Committee chair), Randy McDaniel, have all been friends of your industry in the past. I see no reason to think that these relationships are about to change.

We also know – generally – about the 116th Congress with which we’ll have to deal for the next two years. Democrats gained a majority in the House of Representatives with a net gain of 27 seats so far, with 21 additional House races yet to be finalized.

Republicans gained at least a net-two seats because of flips to Republicans in Indiana (Democrat Joe Donnelly lost), Missouri (Democrat Claire McCaskill lost) and North Dakota (Democrat Heidi Heitkamp lost). Republican Sen. Dean Heller lost his race in Nevada to Jacky Rosen by 3.7 points.

At a minimum, Republicans will have a 51-49 majority. But there are still four more races to be called – and Republicans have slim leads in Florida (Sen. Bill Nelson is demanding a recount), Arizona and Montana. All of these races are too close to call as this issue goes to press.

The fourth Senate seat is dependent on a run-off in Mississippi next month. although the races remained too close to call this morning, and a race in Mississippi will go to a runoff later this month in which the Republican is favored.

We gained a big supporter in Kevin Hern, the congressman from the 1st Congressional District. He clearly understands your business because he’s part-owner and director of one. That’s a huge positive for us.

But we lost one of your industry’s supporters, Rep. Steve Russell, who has represented the 5th District in a superb manner. We’ll work hard to establish a good relationship with our newest 5th District representative, Kendra Horn.

The change of control of the House agenda brings with it a huge concern that many of my colleagues share: who will be the chair of the House Financial Services Committee? The Committee has jurisdiction over banking industry issues, and it’s very likely that it will be chaired by Rep. Maxine Waters (D-Calif), who basically hates banks.

A case in point was made a few weeks ago. Rep. Waters made the following statement:

“I have not forgotten you foreclosed on our houses. I have not forgotten that you undermined our communities. I have not forgotten that you sold us those exotic products, had us sign on the line for junk and for mess that we could not afford,” she said. “And for doing that, I have people who are homeless who have never gotten back into a home. What am I going to do to you? What I’m going to do to you is fair. I’m going to do to you what you did to us.”

That’s just GREAT! 🙁

There’s another question to which I don’t know the answer: How will the House conduct itself in the final two years of the Trump administration’s first term.

Will the president be impeached?

Will Justice Kavanaugh be impeached or his reputation be further tarnished?

Will there be more time-consuming “investigation” activities?

Will the president run again in two years?

And these are the issues that will likely dominate most of the news outlets beginning on Nov. 7.

Why am I concerned? Because issues of this magnitude and the Washington-based media will suck all of the energy out of the Capitol.

Marvelous.

Republicans increased their net margin in the Senate, something that will bode well for your industry. At least we have a friendlier audience with whom to make our case for additional regulatory relief measures.

Moreover, there are still lots of judges who have yet to be confirmed. The likelihood is the president will continue to fill vacancies with conservative judges who will be on the bench for at least a generation. In my view that will result in good things for your industry.

And even though the House will be controlled by Democrats, I’m optimistic reasonable banking proposals – like establishing a new examination appeals process – can make it through the political gauntlet with the right amount of encouragement.

There are a lot of community bank supporters in both parties, as evidenced by the passage of S. 2155 earlier this year. Even though we’ll be spending more time on regulatory matters, I think we’ll be able to get something done to help relieve the regulatory overkill that surrounds today’s banking environment.

I am also optimistic Congress will address the growing pressure to change the Controlled Substances Act and move “marijuana” from Schedule I (illegal) to another schedule. Three more states have approved marijuana use (Utah, Missouri and Michigan) and more proposals are pending as the issue moves up on the congressional agenda.

We’re still waiting for final numbers, but I continue to believe our new hovernor/lt. governor combination will stand us in good stead as we make a collective effort to bring Oklahoma to a better place across the board.

Stay tuned. The fun is just about to begin.