Pub. 3 2015 Issue 1

www.uba.org 4 W hen I arrived in California, I rented a car and drove to my hotel. Oh my goodness, it was like driving in a video game. Most of the drivers were lawful and well behaved, but every so often someone would come out of nowhere driving as if the traffic laws didn’t apply to them. Thankfully, we arrived safely at our hotel and spent the next day riding the rides. That's when I had my revelation about Elizabeth Warren’s comment. It occurred to me that every ride, no matter what the illusion of thrills and danger, is safely and securely locked into a track (even the sub- marine ride! - sorry to ruin it for everyone.) The best example is the car ride named "Autopia". I remember as a child, I was so thrilled to drive a car without any help from my dad! But I quickly realized that the car was locked onto a metal track in the middle of the road. It prevented my car from going more than about 6 inches in either direction. The thrill was gone. Everybody, regardless of experience or skill, successfully maneuvered at the same speed down the middle of the road - never an accident, never an issue. That's exactly how Elizabeth Warren would like our banking system to operate. That is why she so steadfastly defends the metal track Congress installed down the middle of our economic freeway (Dodd- Frank). Sure there were some drivers who acted as if the rules didn’t apply to them, and they caused a massive economic accident that shut down our freeway system. But really! Is the answer to lock every driver onto a track in an effort to prevent any violations or accidents ever again? Because of the reckless actions of a few lawless drivers, bankers who have safely changed lanes and speeds for the last 100 years in order to meet the needs of their customers have been locked onto a track in the middle of the road. Under Dodd-Frank, if your financial needs are in the middle of the road, you are all set. Now, every bank in the country is fighting for your business. But if you need something a little different, some- thing near the outside of the lane, or heav- en forbid your bank used to have to change lanes or even pull over to the shoulder to meet your needs, you are just out of luck. No matter how you slice it, there is not enough economic business in the middle of the road for all our banks and credit unions to survive. So the consolidation of the industry accelerates. We are losing hundreds of banks and credit unions every year. And this will function like a permanent limit on the speed at which our economy can grow. But it’s going to be extremely hard to fix Dodd Frank, because bankers are not whiners. It's not in their nature to com- plain because even if they do, people don't pay much attention to them. (Everyone ignored them when they raised concerns about who was getting mortgages.) In- stead, bankers adjust. They adapt to the new rules. They find ways to successfully and safely leverage their capital and earn an appropriate return. If they can't, they sell their capital to a larger institution, with better economies of scale, and they comfortably retire. The individual bankers are going to be just fine no matter what Senator Warren does. When Elizabeth Warren defends every last regulation in Dodd-Frank, the people she hurts are the same people she claims to protect. It's the people and communi- ties banks serve that Senator Warren is punishing. Look at the number of people who have given up looking for a job! Look at poverty rates! It's time to start making changes to Dodd- Frank. The American economy cannot operate on a metal track running down the middle of the road. We are losing community banks. These are banks we need, and they won't just come back when we finally figure it out and fix the law. The fact that Elizabeth Warren appears committed to fight any and all changes to Dodd-Frank undermines her credibility and shows how politically motivated she is. Does any normal human being outside the beltway really believe that Congress can pass a 2,300 page, partisan bill and get every provision right? Disneyland is great and all, but at some point everyone has to head home and deal with reality. It’s time for Senator Warren to check out of Fantasyland and start lis- tening to her former colleagues at Harvard when they tell her Dodd-Frank is killing community banks. n T he B ottom L ine By Howard Headlee, President, Utah Bankers Association I had just been to Disneyland, when I heard Senator Warren’s claim that Dodd Frank has been good for community banks. Maybe you just have to spend time in Fantasyland in order to understand her logic, but it all makes sense to me now. It’s Time to Start Making Changes to Dodd-Frank