Pub. 2 2014 Issue 1

www.uba.org 4 I n fact, the argument made by many bankers that federal regulators are actively pruning the ranks of bank char- ters, just got much more credible. In what was clearly one of the most arro- gant displays of unbridled power I have witnessed, the federal banking agencies blindly pushed forward with what may be the most complex rule associated with the Dodd-Frank Act without any input from traditional bankers. When confronted with the consequences of their actions, the agencies attempted to reassure bankers by insisting that this out- come was completely unintentional. But that may have been more offensive than the rule itself. It reconfirms the fact that they aren’t even thinking about traditional banks when they issue these rules. Days later, when it was confirmed that their misguided rule will unintentional- ly suck billions of dollars of capital out of banks across the country, rather than admit their mistake and take action to mit- igate it, they covered their trail (and tails) by issuing a meaningless FAQ document. But what happened next gives credibility to those who claim the regulators have a hidden agenda to prune the ranks of banks in America. Accounting rules would have required an almost immediate hit to capital because the rule had been issued just three weeks before year-end. So the ABA filed for a temporary restraining order in order to at least push whatever financial impact the Volcker Rule might have into the next calendar year. But instead of viewing this as a potential solution to prevent an immediate, unintended loss of capital, the agencies asked the court for a two-week delay in the TRO hearing! So in summary, not only did our regula- tors NOT correct their mistake and pre- vent the unintended loss of capital, they actively fought to speed it up. This is a wake-up call! Most banks in Utah won’t be impacted by the Volcker rule, but every banker (and every Amer- ican for that matter) should be horrified by what just happened. The Volcker rule was inserted into Dodd-Frank to deal with proprietary trading, but the rule adopted had a far broader reach than anyone could have anticipated. This could happen with any rule, but the agencies’ complete indifference to what was clearly a mistake and subsequent hostility is a frightening prospect given the fact that there are literally hundreds of rules associated with Dodd-Frank yet to be issued. It is time for traditional banks to rise up and draw a line in the sand. Traditional banks in America did not cause the eco- nomic crisis, and they should not continue to be punished for it. In a desperate act of political self-preservation, certain mem- bers of Congress have been incredibly aggressive in pointing blame at anyone but themselves. They don’t care who is affected as long as they win re-election. As a result, they stand silent as traditional banks get blasted with the fallout from Dodd-Frank for no justifiable reason. We have to be bold. We have to demand a broad, activity-based (not asset-based) exemption from the avalanche of new reg- ulations pouring out of Dodd-Frank. We cannot fight this battle one rule at a time. We have to help Americans understand that when you kick the banking industry, you kick the American economy and every American that needs a job or is pursuing their economic dream. Americans need to stop falling for the excuses and fin- ger-pointing coming out of Washington D.C. and demand jobs and real economic growth. At that point, members of Con- gress interested in getting re-elected will tell banking regulators to get their boots off the throats of America’s traditional banks so we can focus all of our attention on the business of building our local com- munities and economies. n T he B ottom L ine By Howard Headlee, President, Utah Bankers Association Accounting rules would have required an almost immediate hit to capital because the rule had been issued just three weeks before year-end. If there was any doubt that federal bank regulators are completely indifferent to what is happening to traditional banks in America, it was removed with their issuance of the Volcker rule. Enough Already!