Let this sink in for a moment. The fraud committed by Wells Fargo has cost the bank $319 million dollars, made up of a $185 million dollar fine and the Chairman and CEO, John Stumpf’s, parting gift of $134 million. This total of $319 million is more that the total assets of 50 South Dakota community banks! If you only look at the fine of $185 million, this is still more than the total assets of 43 South Dakota community banks!
Yet again the financial services industry has been given a black eye by a too-big-to-manage, too-big-to-fail bank. Yes, this latest case of fraud is an issue that is divisive to the banking industry and especially to community banks. Is the response that we have seen from fellow banking industry representatives of merely condemning dishonest or unethical behavior at “any bank, anywhere, anytime” appropriate? No, this isn’t about “any” bank, and most importantly, this isn’t about community banks.
The community banking industry will not make progress towards removing regulatory burden from your community banks by joining hands with the very institutions that create the problem. Asking for regulatory reform legislation with a megabank at the table would be a good way to be laughed out of the congressional office.
In the first week of October, I visited the congressional offices in Washington D.C. to speak with staffers about the coming lame duck session and the possible regulatory fall out over the Wells Fargo fraud. The message I got after being in Washington D.C. is that a legislative response is coming. We are already seeing municipalities such as Los Angeles introduce legislation that would require banks that work with the city to eliminate sales goals, among other requirements.
As the legislative response progresses, our job at the ICBSD is to ensure that for you, our members, any legislation does not negatively impact your business and makes a clear distinction between too-big-to-manage banks and community banks. As I have stated before, corporate greed and toxic culture of Wall Street always leaves its stain on Main Street. And those who seem to most condemn the big banks inadvertently become their champions by threatening the survival of the community banking industry through added one-size-fits-all regulation.
While issues exist that all banks can work together on such as credit union mission creep, farm credit and unregulated lending, the issue of regulatory reform is one that community banks must take on alone. As your voice for community banking, we will not be quiet, we will not be passive, we will not be relegated to follow the same one-size-fits-all rules and regulations.
100% of bank members recently renewed membership with the ICBSD. Thank you for your continued support of the association. You did not renew your dues to be a member of a passive organization. You want a strong, united voice for community banking and that is what you will continue to get from the ICBSD.
McCurry, a native of MN and resident of Mitchell, SD, holds a Bachelor of Arts degree in Communications / Marketing from the Minnesota State University, Mankato. Prior to joining the ICBSD as President and CEO, he directed the marketing, sales and government relations efforts at Santel