SENATOR TOOMEY SPEAKS
TO FOTB LEADERS
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United States Senator Pat Toomey (R-PA) spoke with members of Friends of Traditional Banking's leadership boards this week. In the exclusive Zoom chat, Toomey thanked FOTB for their huge support .
“I had a very narrow win in what at the time was the most expensive race in the country,” he said.
“It is entirely possible it wouldn’t have been successful without the critical support of Friends of Traditional Banking.”
The Senator said he was part of a bipartisan group working to see a real infrastructure bill, “not just a bill to expand the welfare state,” he said. “And in the process, we should not undo the 2017 tax reform which unleashed the best economy in my lifetime.”
As Ranking Member of the Senate Banking Committee, Toomey warned about serious inflation. “I worry that the Feds will be behind the curve and inflation will be more severe and more enduring than they think.”
He expressed vehement opposition to President Biden’s nomination of Rohit Chopra. “I aggressively oppose his nomination,” he said, “He was a protégé of Elizabeth Warren at CFPB in the beginning where they abused power and were hostile to banks.”
Toomey also warned about attempts to instill a national lending cap. “It is a very bad idea for the federal government to set limits on any commodity, including lending,” he said. “I feel I have an obligation to stand up for real capitalism, which is under attack right now like never before.”
He wished FOTB well and encouraged us to look at helping to win back the Senate for the Republicans. “I know I am biased, but to have at least one of the two chambers in Republican control is critical for protecting traditional banking.” He pointed out Senate seats up in Pennsylvania, North Carolina, and Wisconsin where the GOP will need to play defense, but also pointed to opportunities for offense in New Hampshire, Georgia, Arizona, and Nevada. “I am optimistic next year we can take back the Senate.”
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Lanie Gardner to Represent Kentucky on FOTB's Nationwide Banker Board
Lanie Gardner has been appointed to represent Kentucky on FOTB's Nationwide Banker Board. She is Community President for First Southern National Bank in Muhlenberg County located in Western Kentucky and also serves on the board of the Kentucky Bankers Association. She has 21 years of banking experience.
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Tax-subsidized credit unions devour more community banks
In 2018 nine credit unions bought banks, which jumped to 16 acquisitions in 2019. Now that we are beyond the pandemic, credit unions are on a buying spree once more; simultaneously eliminating competition among community banks while expanding their footprint.
In May, GreenState Credit Union in North Liberty, Iowa announced plans to purchase both Oxford Bank & Trust in Oakbrook, Illinois AND Premier Bank in Omaha, Nebraska. This month, Lake Michigan Credit Union announced it is buying Tampa, Florida-based Pilot Bank.
Friends of Traditional Banking will actively support Congressional candidates next year that will work for a level playing field, and we will actively oppose candidates who advocate the continued expansion of credit unions beyond their traditional bounds. In the meantime, we support our industry allies in calling on Congress to act.
“Taxpayers didn’t get a say in these deals, but they unknowingly helped subsidize them,” American Bankers Association Chair Laurie Stewart said. “And the credit unions buying those banks will be able to grow well beyond their legitimate membership boundaries, while not paying taxes that would otherwise fund the nation’s schools, roads and infrastructure.”
"Taxpayers subsidize the credit union industry over $2 billion a year and have been doing that for decades," said Paul Merski, ICBA's executive vice president for congressional relations and strategy. "The proposition that a credit union can grow, tax exempt, and use that tax-exempt benefit to then turn around and displace a taxpaying entity, taking that taxpaying bank out of the market and converting it to a non-tax-generating entity, is kind of a perverse use of the credit unions' tax exemption."
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ECORA Act Sustains Access to Traditional Banking |
There’s been a lot of discussion in the halls of Congress about access to financial services this year, and a significant portion of that talk has focused on meeting the credit needs of rural America.
An important piece of federal legislation will benefit agricultural producers and rural homeowners nationwide H.R. 1977 has been introduced in the U.S. House of Representatives with Rep. Ron Kind (D-WI) and Rep. Randy Feenstra (R-IA) as bi-partisan lead co-sponsors. H.R. 1977, commonly referred to as the Enhancing Credit Opportunities for Rural America (ECORA) Act, creates a targeted federal income tax exemption that will enable traditional banks to offer more competitive interest rates for ag real estate and rural housing loans. ECORA will promote business growth, stimulate job creation, and serve as an incentive for traditional banks to invest in rural housing. A companion bill is expected to be introduced very soon in the U.S. Senate with Senator Jerry Moran (R-KS) as the lead sponsor in that chamber.
With Congress expected to tackle federal tax reform this year, it’s imperative that bankers nationwide garner support for the ECORA Act before those tax reform deliberations get underway. You’ve undoubtedly read that President Biden is publicly calling for an increase of the federal corporate income tax rate from 21% to 28%. With more than $5.3 trillion in supplemental spending authorized by Congress the past twelve months to battle COVID-19 and additional spending on infrastructure now at the top of the Biden Administration’s priority list, it’s difficult to see a path forward that doesn’t include some increase for both corporate and individual income taxes.
The reality for traditional banks and their customers is any corporate income tax rate increase will create an even more unlevel playing field with tax-exempt competitors, including the Farm Credit System. Now is the time for Congress to advance the ECORA Act to ensure farmers, ranchers and rural homeowners that rely upon their local bank are not caught in the tax and spend crossfire. It’s also time for Congress to recognize that support for the ECORA Act will help sustain access to credit in rural America by making traditional banks more competitive.
DOUG WAREHAM IS PRESIDENT & CEO, KANSAS BANKERS ASSOCIATION
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PAID for by Friends of Traditional Banking. NOT authorized by any candidate or candidate's committee.
Friends of Traditional Banking is a non-partisan grassroots effort organized by bankers in 2012 to improve the political and regulatory environment for the traditional banking industry in the U.S. FOTB is the inverse of a PAC--instead of spreading a little bit of money to a lot of campaigns, they focus a lot of money on a couple of key campaigns.
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