Monday, February 6, 2023

Executive News: Washington Visit positive for Oklahoma banks

It’s been almost three years, but it felt great to get the band back together.

At the end of September, more than 60 Oklahoma bankers descended on Washington, D.C., for our Annual Washington Visit. It’s been two years since we last took a group to D.C. and I’ll say we definitely made up for lost time.

Adrian Beverage, OBA President and CEO

While there were lots of laughs, fellowship and catching up being done on the trip, we were still there to accomplish our goals. The main reason for this outing is to meet with our federal regulators, agencies and members of our delegation. We have very limited time with each to make our case, but I believe we accomplished our mission.

The discussion we made were persuasive with numerous examples of how proposals wouldn’t just impact a bank, but, more importantly, how it would impact our bank customers.

In addition to the discussions, the leaders of these agencies also saw more than 60 bankers took the time and expense to travel to Washington to make their points heard. We hear it all the time in Washington: numbers matter! I would say our group took that to heart.

If you weren’t able to join us this year, please consider joining us in 2023, the dates for next year are September 24-26.

Our agenda in Washington was packed, below you will find a brief summary of each meeting.

Federal Reserve — Gov. Miki Bowman

We had a great discussion and covered a lot of ground with Gov. Bowman. Bowman spent a long time discussing the labor market and different trends. Inflation was top of mind for everyone in attendance. The governor walked us through the process as to how we got where we are and what steps the Federal Reserve is taking to not only slow inflation but ultimately lowering the inflation rate.

One question that spurred a lot of conversation and questions from our bankers was where does the Fed stand regarding central bank digigal currency or CBDC. We told Gov. Bowman the implementation of a CBDC would change the nature of our industry, financial system and the economy. Also, the issuance of a CBDC would set the Fed up as a direct competitor to the banking industry.

Gov. Bowman was well aware of our concerns and reassured us all of our issues are being considered and taken seriously. Bowman is a former community banker; she’s always been an advocate for our industry and I don’t have any reason to think she won’t be supportive on this issue.

FDIC — Acting Chairman Marty Gruenberg
We had a very lively discussion with the chairman of the FDIC, he was as engaging and open to questions moreso than I’ve ever seen him before.

He spent a good amount of time explaining why banks should be prepared and are already prepared for climate change risk.

He reiterated bankers have always been good at judging risk and those who are in areas with temperamental weather already have the experience necessary.

We spent the last few minutes with Chairman Gruenberg talking about the FDIC’s proposal to replenish the DIF (Deposit Insurance Fund). Gruenberg explained the history of the DIF and why he felt their proposal was necessary.

As you are hopefully aware, the DIF has fallen to 1.23% which is well below the statutory level of 1.35%. There are two reasons for the drop: The incredible amount of pandemic money deposited into insured account and the loss of funds due to the losses in securities.

Multiple bankers explained to the chairman those pandemic deposits are starting to leave the banks, and we just need more time. The chairman was happy to hear that and he said they would continue to monitor the numbers and look for strong trends.

CFPB — Director Rohit Chopra
We were warned well in advance of our meeting with the director that he will talk the entire time and not give you the opportunity to discuss issues unless you interrupt him, which is exactly what happened.

The director spent most of his time talking about Section 1071 and Data Aggregation (1033). In regards to 1071 we stressed to him the cost of implementing these proposed changes would cost a lot more to the bank than the CFPB believes.

We also tried to convince him this proposal would most likely discourage bank lending to small businesses instead of increasing it, which is what the Bureau wants.

In the last few minutes we had with the director, we discussed NSFs and re-presentments. We were able to make a point the bank’s CORE providers aren’t doing anything to help with the issue. They’ve also shown no sign they are willing to help resolve the issue as, for now, it looks like banks are on their own.

The other issue we tried to hammer home with the director is the role that merchants play in re-presentments. We asked if there was anything the Bureau could do to prevent or slow down the process of these retailers continuously running these insufficient payments through the system after they’ve already been flagged for being insufficient. He didn’t seem to really care about that particular side of the situation, but would see what he or his staff could do.

OCC — Comptroller Michael Hsu
We had a great meeting with Comptroller Hsu, he is a excellent speaker and is always looking for feedback and questions from the group.

He spent the beginning of his remarks laying out some of the agency’s priorities and what’s important to him. The amount of de novo banks in the last 10 years is concerning to him and we need to see more in the near future. He realizes the rules and regulations currently in place make it difficult and a daunting task.

The OCC has recently reduced their assessments and have worked hard to bring them in line with state-chartered banks. It wants to level the playing field in terms of these fees to not make it so cost prohibitive to be a national bank. There has been a movement nationwide by state bank commissioners to lower their cost of assessments, and I’m happy to know that Oklahoma Commissioner Mick Thompson started the movement.

We spent a little bit of time talking about overdrafts – The one thing Comptroller Hsu mentioned is he doesn’t believe a blanket policy for all banks is the best approach. He said there needs to be three categories: large banks, midsize banks and everyone else.

He didn’t mention anything about what size banks he was thinking when he mentioned these groups.

• • •
While in Washington, you can see we had great meetings with our regulators and agencies, but this is only half of the work we have to do while there.

The other half is spent meeting with members of the Oklahoma delegation to make sure they are aware of our issues. We have found over the years the best way to make sure all our bankers see everyone is for our delegation to come to us.

One blessing we have is it would be impossible to take this size group of bankers to each individual office. We had a meeting room at the Capitol Hill Club, which is close to the Capitol and easy to access for the members. Every single member of the delegation came by to talk with the group. We reminded them what our issues are, but we gave them the freedom to talk about what they wanted.

Each member gave their election predictions and they are all about the same: Republicans will take the House, the only question is by how many. They all also felt Republicans would likely take the Senate, but it would only be by one or two seats.

One member received a little more attention than the others. Since it would be the last time Sen. Inhofe would meet with a group from the OBA, we turned it into a big “thank you” moment. I know every Oklahoma banker has a personal opinion on the senator and some like him and some don’t. But, Sen. Inhofe would be the first to tell you that if everyone likes you, you clearly aren’t doing you job.

The one thing about the senator every Oklahoma banker can agree with is he was good to the banking industry. He was always willing to hear our side of the issue and, at the end of the day, he supported us, and that’s why we all wanted to tell him “thank you.”

• • •
On a personal note, it was great to see how many bankers brought kids and grandkids on the visit. While none of the youngsters attended the agency meetings – and I don’t blame them – they all came to the meeting with the delegation.

I think it great to see them getting involved at a young age, and I love the fact they are using this event to have an opportunity to personally meet them.

• • •
As you can see it was a great visit, and we hope you will be able to join us next year as we want to be the first state bankers association to bring 100-plus bankers to Washington for their annual visit.

• • •
Next month is the issue of this newspaper I’ve been waiting to write on for over a year: ELECTION RESULTS!

The November issue of the Oklahoma Banker will have all your statewide and federal results, and we will also talk a lot about what 2023 is going to look like as a result of the elections.

Please make sure you vote and encourage everyone you know to vote – there is a lot on the line this year and we need to make sure that everyone’s voice is heard!