ABA Banking Journal - January 2011 - (Page 30)
feature story | washington outlook that gets all of it right,” says Davis. “It’s hard to imagine a sweeping bill that gets most of it right.” Deliberate, gradual, piecemeal moves may be how it goes, rather than any “magic bullet,” Davis suggests. He says ABA believes it’s critical that Washington find the means to move the two giants through their conservatorships; evolve the system towards its new form; remove much of the federal support for the mortgage market; and set up private-sector replacements to meet America’s housing credit needs. That’s a big gulp. “Interestingly,” Davis continues, “the Treasury Department has begun to speak in terms not about a plan that can be implemented in some sweeping way, but a ‘path.’ We think they’re talking about a path that we want to follow.” Historically, Treasury Departments labor to produce huge blueprints of “the world according to us.” Some never emerge from the land of the wonks. This anticipated difference in approach is notable. “Congress is going to chew on this,” says Stoner. “It is probably going to chew on this for two years.” “That’s not a bad thing,” sug- gests Abernathy. “You want to make sure that whatever you do makes a lot of sense.” Stoner points out that tinkering with mortgage finance will have an impact on the nation’s economy at a critical political juncture. “The goal of the Administration appears to be moving towards a singular focus on making sure the economy recovers, certainly within two years,” Stoner says. “And laying a heavy dose of major change on the housing markets doesn’t help you do that.” To a degree, this plays into the avowed strategy of John Boehner (R.-Ohio), new Speaker of the Dodd-Frank oversight: an update on the politics Americans sent Washington a message last November: “Get out of our lives.” The Dodd-Frank Act fits that description. But while there’s room for adjustment and revision of the act’s provisions, it may be some time before “how much” becomes apparent. “There’s been a majority change in the House, and when you have the majority there, you run the railroad,” says ABA’s Floyd Stoner, executive vice-president, congressional relations. “When you get to the Senate, the Democrats don’t have as large a majority as they had had. But the President is still in the White House with a potential veto pen. So, regardless of what one might pass in the House, it’s still not clear what could either pass the Senate or, having passed the Senate, would likely be signed.” Stoner, as part of ABA BJ interviews with ABA’s top three government relations officials in late December, spoke of the need to prioritize bankers’ Dodd-Frank concerns. ABA spent the period between the Congresses preparing for key goals. One was calling for hearings in the financial services committees in both House and Senate on the impact of the current regulatory environment and Dodd-Frank on the future of community banks. The association continues to voice concerns over the Consumer Financial Protection Bureau. And ABA’s regulatory wing has been pursuing industry concerns in the implementation phase of DoddFrank, as proposals are made or before. Stoner indicated that it will take some time to identify who in the new Congress will get behind solutions to various issues the industry hopes to see addressed. “We’re going to have to have members willing to carry the legislation on particular issues,” says Stoner. A priority has been, and will be, grassroots lobbying. “We have almost 100 new members of the House, plus 16 new members of the Senate,” says Stoner. “We’ll be working with our grassroots bankers to help them introduce themselves to new members of Congress, and to renew contact with reelected members and those carrying over, in the Senate.” ABA has long maintained, and will continue, a policy of working on both sides of the aisle. “Many banking issues in the past, and, I predict, in the future, are not partisan issues,” says Stoner. “What happened over the last two years was an unfortunate anomaly, where issues became very partisan.” The message ABA and bankers must send to Congress, according to Stoner, is: “Look at the burden we are facing today. And this is before Dodd-Frank is implemented.” Initially, oversight hearings covering implementation of DoddFrank will be a key effort. The importance of this cannot be overstressed. Prior to service at Treasury and then ABA, EVP Wayne Abernathy spent years as a top Senate Banking Committee official. “Oversight is a critical part of the process,” says Abernathy. “In order to solve a problem, the first thing you have to do is sell people on the problem. Then you may be able to sell them on the solution. And hearings are an important means of identifying the problems.” In spite of its thousands of pages of content, “one of the astonishing things about Dodd-Frank is that it leaves an enormous amount of latitude to the regulators in implementing it,” says Abernathy, who is in charge of financial institutions policy and regulatory affairs. Inundated regulators face an impending “regulatory traffic jam,” Abernathy warns. “They really can’t do all the regulations they are supposed to produce, in the time they’ve been given to produce them.” The possibility that Congress—already looking at some form of “technical corrections” legislation to mop up after Dodd-Frank—will be asked for more time may create an opportunity for a second look at some of the law’s provisions. —Steve Cocheo 30 | ABA BANKING JOURNAL | january 2011
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