Happy new year and welcome to 2022! I would encourage you to buckle up, as it looks like it’s going to be a busy year.
I expect Washington to be as crazy as ever with possibly the most significant midterm election that we’ve seen in decades.
Let’s not lose sight of everything that you as an industry accomplished in 2021. You continued to be there for your customers and communities, as you always have, and you’d be hard-pressed to find another year where your customers relied so heavily on you for guidance and support.
The 2022 midterm elections are going to be here before you know it – although November is 11 months away, in some ways it’s actually already here. The attack ads will be plentiful and the amount of money spent on federal races is most likely going to be record setting.
Lets take a look at the U.S. Senate and what folks are predicting. As you know, the Senate is tied 50-50, and whichever party picks up one seat will control the upper body in Washington. There will be 34 seats up for election in November, 14 of those are currently held by Democrats and 20 are held by Republicans.
I gleaned the information from several different political insiders and came up with what I believe to be a consensus among the different resources. Of the 14 Democratic seats, 10 are believed to be safe, while the race in New Hampshire is leaning Democratic and there are three races that are toss ups.
The races in Arizona, Georgia and Nevada are up for grabs. If you ask 10 different experts about these races, five will tell you they’re flipping to Republicans and five will tell you it’s staying with the Democrats.
On the Republican side, you have 20 seats that are currently held by Republicans. Fifteen of those races are considered safe, two races lean Republican and, just like the Democrats, three are considered toss ups.
North Carolina, Pennsylvania and Wisconsin are the races to watch for the Republicans. My guess is control of the Senate is going to come down to these six races. As we all know, the information and circumstances are going to change weekly, if not daily. We’ll keep you posted every month should there be any significant changes in any of these races that could possibly shift the potential for power in the U.S. Senate.
Control of the U.S. House of Representatives is up for grabs just like the Senate. Democrats currently have the majority by a razor-thin margin. The Republicans only need to pick up five seats to take control of the House.
Everything you read or hear will tell you it could be a great night for Republicans, especially with what happened in Virginia and New Jersey a couple of weeks ago. History will also tell you in the first midterm of a presidency, the minority party in the House usually picks up a significant amount of seats.
One statistic I find interesting is the number of incumbents who have announced they aren’t seeing re-election to the House. As of today, there 34 House members who aren’t returning: 23 Democrats and 11 Republicans. Of those 23 Democratic seats, 15 are likely to stay Democratic, three are predicted to flip Republican and five are considered toss ups.
On the Republican side, seven are predicted to stay in Republican hands, four are toss ups and none are expected to be flipped to the Democrats.
Just like the Senate, the House is going to come down to a handful of races to decide who controls the agenda in Congress.
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While there were numerous issues being discussed in the latter half of 2021, there were three that made the most noise from an industry’s perspective, and just like that they all seemingly came to a conclusion at the end of the year.
We have been working for a couple of years to get something passed that would allow Oklahoma banks to bank the cannabis industry. The SAFE Act has passed the House on three occasions and we truly felt we were as close as ever in getting this language across the finish line.
Early last year, the SAFE Act was attached to the National Defense Authorization Act and made it through the House and was scheduled to be heard in the Senate. At the last minute, a handful of senators didn’t feel this was the appropriate vehicle for this language and removed it from the NDAA bill.
We were definitely disappointed with this result, but we’ll keep fighting to get this language to the president. As more and more states legalize marijuana, either recreational or medical, there will be more bankers asking for legislative assistance to bank the industry.
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President Biden’s Build Back Better plan was at the heart of every discussion in Washington for the last half of 2021. It was definitely on our radar as we, and the majority of bankers across the state, got involved in this piece of legislation.
The actual bill itself wasn’t the main topic – it was the proposed IRS provision that would require all financial institutions to report additional customer information to the IRS.
I can’t remember the last time we had a grassroots effort like was directed at this proposal. Not only were the bankers at all levels involved, their customers were equally involved in defeating this proposal.
When the Build Back Better plan passed the House on Nov. 19, the IRS proposal was not part of the bill, and this was a huge victory for the banking industry.
We them shifted our attention to the Senate to make sure the same IRS language wouldn’t be added to its version. We all knew that it was going to be difficult for this plan to ever get Senate approval, mainly because of Sen. Joe Manchin (D-W.V.) and Sen. Kyrsten Sinema (D-Ariz.) who were opposed to the plan from the beginning. On Sunday, Dec. 19, Sen. Manchin released a statement he would not be able to support the Build Back Better plan, thus making it nearly impossible for the plan to pass the Senate. The following was his statement:
“For five and a half months, I have worked as diligently as possible meeting with President Biden, Leader Schumer, Speaker Pelosi and my colleagues on every end of the political spectrum to determine the best path forward despite my serious reservation. I have made my concerns clear thru public statements, op-eds and private conversations. My concerns have only increased as the pandemic surges on, inflation rises and geopolitical uncertainty increases around the world. I have always said, if I can’t go back home and explain it, I can’t vote for it. Despite my best efforts, I cannot explain the sweeping Build Back Better Act in West Virginia and I cannot vote to move forward on this mammoth piece of legislation.”
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Toward the end of 2021 Biden submitted his nominee to lead the OCC. Dr. Saule Omarova wasn’t well received from the beginning by many, if not all, sectors of the financial industry.
The main concern was comments Omarova had made either in public or in published papers as to how she wanted to make sweeping changes to the country’s financial system. She went through a contentious confirmation hearing where both Democrats and Republicans indicated they wouldn’t support her nomination.
A few weeks after the hearing, Omarova withdrew her name from consideration to the OCC. As of press time of this issue of Oklahoma Banker, the White House hasn’t released any information as to whom the next nominee will be.
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We are just about one month away from the start of the Second Session of the 58th State Legislature.
It’s going to be a fun year as there are 3,020 bills filed for this year and 2,490 carryover bills from last year.
We will be reviewing all these bills prior to session to make sure there aren’t any land mines out there for the banking industry. The majority of the carryover bills will go away after the first deadline, but we track them until their death as they are a live round and can move at any time.
It’s still early in the process and we can only see about 100 of the newly filed bills – but this time next month we’ll know exactly what we are working with.
In the next few weeks you’ll be receiving information about our Contact Banker Program. This is the program where you join us at the Capitol during the legislative session to see how the process works and also meeting with your personal senator and representative. Please consider joining us or sending someone from your bank. There is no cost to attend other than your time.
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The OBA wants to thank all of our member banks and strategic members for all you did for us in 2021. We had a great year and it is a result of all our members.
We are excited for 2022 and look forward to working with all of you. Should you ever need anything please don’t hesitate to contact us.