A lobbyist for community banks privately urged his industry not to oppose the U.S. regulatory overhaul, warning that smaller lenders are being used by Wall Street to derail the legislation.
In an e-mail sent in late June to state bank trade association executives, Camden Fine, head of the Independent Community Bankers of America, said his group wouldn’t publicly take a position on the bill. Still, he said small bankers would lose important exclusions they fought for and “are turning the gun on themselves” if they work to defeat the legislation ahead of a final Senate vote this month.
“Do you really think Wall Street mega firms give a rat’s ass about small banks? Hell no,” wrote Fine, who represents about 5,000 community lenders. “They only care about the credibility small banks can wield on Capitol Hill to get them out from under this rock.”
Fine’s e-mail highlights a fissure emerging in the banking world over the legislation, which is the largest re-write of financial rules since the 1930s. Other groups that represent financial institutions, including the American Bankers Association, continue to lobby against the bill, which they say is too burdensome on firms of all sizes.
The legislation, pushed by President Barack Obama’s administration for more than a year in response to the credit crisis, was approved by the House on June 30. Passage isn’t assured in the Senate, where 60 votes are needed to prevent the bill from being blocked.
Fine, in an interview yesterday, said he sent the memo to point out some merits of the legislation and to remind fellow community bank trade group leaders what is at stake. Several state associations have come out in opposition to the bill.
In his e-mail sent June 29, Fine wrote that the legislation does have some “stink bombs” that the group will continue to fight against at federal agencies and by pushing for additional legislation. Those policies include regulation of debit card swipe fees, he said.
Small firms were treated better by Congress during the legislative debate, winning exemptions from some regulation and getting curbs enacted on large banks that would level the competitive playing field, he said. If the bill fails, community lenders may not be able to count on such protection again.
“Those that don’t like banking in general, and small bank carve outs in particular, have not just faded away into the dark,” he wrote. “They are desperate to get another shot at us.”
Fine, 59, became president and chief executive officer of the trade association in 2004, according to the group’s website. Before coming to Washington, Fine ran Midwest Independent Bank of Jefferson City, Missouri, for almost 20 years. He also owned Mainstreet Bank of Ashland, Missouri.
The community bankers association was active in the regulatory debate, successfully advocating for the Federal Reserve to keep its supervision of smaller lenders. The group also won changes to how the Federal Deposit Insurance Corp. assesses banks for deposit insurance, shifting more of the burden to large institutions.
In his e-mail, Fine touted exclusions for small banks from rules governing mortgage lending and increased capital requirements, as well as from the new consumer protection bureau’s examination and enforcement authority.
‘Wrath’ of Obama
“If this bill goes down by our own hand, our goodwill will be gone,” the trade association chief wrote. Friendly lawmakers would feel “like we stabbed them in the back” and relations with the Obama administration would turn sour, he said.
Obama is likely to remain president for six and a half more years, and he will have appointed every head of the financial regulatory agencies and most Fed governors by this time next year, Fine said. Those officials will have sway over the industry.
“If the conference report goes down it will be a pyrrhic victory, because the wrath of the Obama administration will also fall down on us hard,” he wrote. “There won’t be any meetings with community bankers at the WH, I will guarantee you that,” he said, referring to the White House.