The latest chapter in contrasts

When I read American Bankers Association President and CEO Rob Nichols’ recent email to bankers, these two paragraphs jumped off the page:??

We need to stand together in challenging the FDIC to do everything it can to reduce the price tag of any special assessment to cover the cost of the SVB and Signature failures, recognizing that the industry will have to foot some of the bill.

We fully recognize that no bank is happy about covering the cost of another bank’s mistakes, but I have been struck by the many bank leaders in recent days who have acknowledged the shared benefit the DIF provides the entire industry.

As the ABA takes the position that the entire industry is responsible for footing the bill for the SVB and Signature Bank failures, I say no.

ICBA would never advocate for community banks to pay the price for these failures, and this is just another example of why?it’s essential that community bankers have an association in Washington that is dedicated to serving one mission rather than one voice.?

This is nothing new.??

As a community bank CEO from Taos, New Mexico, I was invited to sit on the FDIC’s Advisory Committee on Community Banking?in 2009 .?During one of our regularly scheduled meetings in 2010, I was having breakfast with fellow bankers and FDIC senior staff when the topic of the DIF assessment base came up. . The question was this: Should it be based on assets instead of deposits?

As a community banker, this was a very simple question for me to answer immediately: It should be changed to be based on assets. But, as I thought that, I saw another banker at the table was contemplating the question and struggling to answer it. He was from a small community bank in the rural Midwest, so I was surprised when he went to great lengths to finally explain that, while it was not in the best interest of his bank, it was in the best interest of the industry to leave the assessment base as it was—tied to deposits. His attempts at answering this question in defense of the industry left me perplexed, until I realized that he was speaking not on behalf of his bank, but rather on behalf of banks both large, small and midsized, and fully representing the American Bankers Association as an ABA leadership banker.

It was then and there I realized the defining line between ICBA and ABA. Even though I had just started my volunteer service for ICBA, it was clear that ICBA took a position on what was in the best interest of community banks and the customers and communities they served. ICBA had no reason to cave to the influence of the too-big-to-fail and too-big-to-manage banks, while those who represented all banks had to walk a fine line—often giving in to the larger banks that paid a higher percentage of the membership dues. At that moment, my passion for community bank advocacy at the national level was ignited.

Which brings me back to today. From the moment Treasury announced the bailout of the depositors of SVB and Signature on March 12, ICBA said?community banks should not have to pay a penny to cover the cost of the special assessment.

We then went into overdrive making sure the agencies, Capitol Hill, and the administration knew our position and why. On March 30, the White House?issued a statement?that encouraged the regulators to “ensure that the costs of replenishing the Deposit Insurance Fund after these recent bank failures are not borne by community banks.” That had everything to do with our advocacy and the advocacy of the community bankers who recognize the power of ensuring their individual voices are heard loud and clear on behalf of the community banking industry and the customers and communities they serve.???

I am proud of what ICBA has accomplished on behalf of community banks and will stand by every decision that protects the franchise value of our nation's nearly 5,000 community banks. Our individual voices remain as important as ever, and I’m looking forward to carrying my voice and hearing every community banker’s voice when we meet with policymakers in Washington at our?ICBA Capital Summit?in May.?

If you are a community banker and have not yet registered, I encourage you to do so. We must continue to level the playing field for community banks and, above all, continue to differentiate ourselves from those who do not have our best interests at heart.?

Community bankers: know that ICBA continues to have your back and will continue steadfast in our mission—holding true to that same philosophy I held in my early days as an ICBA volunteer community banker. I was there in the room to represent community banks. That remains true today—whether it’s in a room with policymakers, the president, or the media, I’m there for one reason and that is you, your community bank, and the community you so proudly and effectively serve.