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Community Bankers Association of Illinois
Bank
notes
CBAI’s annual Call on Washington
provides a great opportunity for
community bankers to meet with
elected officials while they are in session.
Attendance at fundraisers and town-hall
meetings in the district also helps build
relationships. Personal invitations to
lawmakers to tour the bank and meet
with staff can reinforce positions on
issues as well.
CBAI also maintains two political action
committees, Community BancPAC at
the state level and CBAI FedPAC at
the federal level, to provide financial
support to candidates for elective office.
All community bankers are encouraged
to contribute to these PACs each year
which is essential for an effective
grassroots lobbying program.
Main Street Banks and Wall Street
Firms Have Different Agendas
CBAI’s Federal Policy Priorities (see
sidebar for summary) include the
need to implement a tiered regulatory
structure based on size and complexity
(risk), require credit unions and Farm
Credit System banks to pay taxes
on their profits, and end the double
standard of bailing out troubled mega
banks. Most banks, regardless of size,
agree that credit unions and FCS banks
should pay income taxes. However,
mega banks and community banks have
widely divergent positions on tiered
regulations and resolving too-big-to-fail.
Credit unions have grown to control
a significant share of the banking-
services market. They have abandoned
their founding purpose of serving
individuals of modest means and with
a common bond. Credit unions now
provide the same financial services as
community banks, and their federal
tax-exempt status, granted in exchange
for serving their original purpose, is no
longer justified. CBAI urges Congress
to end this discrimination against
community banks. Credit unions must
pay their fair share.
CBAI opposes the Farm Credit System’s
(FCS) expansionist agenda which has
allowed FCS lenders to become the
virtual equivalent of commercial banks
while retaining the benefits of their
Government Sponsored Enterprise
(GSE) status. The funding and tax
advantages of the FCS discriminate
against community banks. The FCS is
the only GSE that directly competes
with community banks. Fannie Mae,
Freddie Mac, and the Federal Home
Loan Bank System all work cooperatively
with community banks. It’s the epitome
of unfair competition when the public
sector (multi-billion dollar GSE)
competes directly with the private
sector (Main Street community banks).
If the FCS chooses not to follow its
narrow historic mission, then it should
be abolished or subjected to taxation
and rigorous oversight and regulation.
A tragic result of the financial crisis
that exploded in 2008 is that the mega
banks have only grown larger, more
complex and interconnected, and
remain candidates for future bailouts.
Too-big-to-fail banks, not community
banks, caused the mortgage meltdown
and financial crisis, and our nation and
banking profession must be protected
from another massive financial crisis.
These mega banks have demonstrated
that they cannot be effectively managed,
supervised, disciplined, or resolved.
They must be downsized, and no
community bank should ever again be
judged by banking regulators as too-
small-to-matter.
CBAI continues to urge Congress
and banking regulators to reform
the financial system to reduce,
to the greatest extent possible,
the probability and severity of a
another financial crisis. Taxpayer
bailouts of mega banks must never
happen again!
The risks taken by mega banks are
very different from those assumed
Mike Kelley (CBSC);
Bill Wubben (Apple
River State Bank);
Kathleen Cook
(Village Bank,
St. Libory); Mary
Sulser (Buena Vista
National Bank,
Chester); Tom
Marantz (Bank
of Springfield);
Senator Mark Kirk;
Douglas Dove
(Shelby County
State Bank,
Shelbyville); Dianna
Torman (Prairie
Community Bank,
Marengo); Doug
Parrott (State Bank
of Toulon)
