Friends of Traditional Banking logoBanking & Politics Report
October 29, 2013

Bank execs Chuck Withee (Provident Bank) and Ronald Paul (EagleBank) warn Congress of the effect their inaction has on economic confidence.

(photo credit: Kent Hoover)

Bankers to Congress: "Kick the can down the road legislation devastating"

Bankers testified before the Senate Small Business & Entrepreneurship Committee this month in the wake of the government shutdown about the damaging effects of Congressional inaction. "The nationwide uncertainty resulting from any short-term 'kick the can down the road' legislation will be devastating," predicted Ronald Paul, chairman and CEO of EagleBank in Bethesda, Maryland.

Chuck Withee, president of Provident Bank in Portsmouth, New Hampshire, testified that there is fear and uncertainty as a result of October's shutdown. Small businesses were beginning to gain confidence in the economy, he said, but because Congress has passed only a temporary fix to the shutdown/debt ceiling crisis, "that confidence is going to go away."

Bankers are looking for leaders in Congress who will ensure confidence, stability and predictability in the nation's finances. Capital is a coward, and to take the country to the brink of default time and time again is brutal to traditional banking and their Main Street customers.


Over 3,000 strong: Friends of Traditional Banking

FOTB Chairman Matt Packard

Pres. & CEO, Central Bank, Provo, Utah


In October, Friends of Traditional Banking surpassed the milestone of over 3,000 members. "We are currently the nation's fastest growing super PAC and have members in all fifty states," said Matt Packard, CEO of Central Bank and Chairman of FOTB.


"I'm proud of the good relationship we have built with both the ABA and the ICBA with regard to what we are doing.  They see the significance of putting large chunks of money into a few races in addition to the traditional PAC way," he said.


"Last year we successfully directed support to Sen. Dean Heller (R-NV) in his close victory and are pleased to have a former bank executive now on the U.S. Senate Banking Committee," Packard noted. "And with our growing base we will be able to direct even more dollars into key Congressional races next year."


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Banks step up fight against credit union tax exemptions 


The issue of continuing the credit union tax exemption is heating up in the nation's capital. With the shutdown behind us, tax reform talk on Capitol Hill is getting back on track for lawmakers who have been hit with a media blitz of radio and print ads educating them on the cost of credit union tax breaks.


Despite offering the same products as banks, the tax exemption for credit unions costs American taxpayers $2 billion per year. Both ABA and ICBA have been encouraging bank execs to speak up to their members of Congress on this fundamental issue of fairness.


On Twitter, the handle @ItsTime2Pay is picking up momentum, sharing relevant info in the fight. For example, "200+ credit unions have assets over $1B, making each of them larger than 90% of taxpaying banks". Wow. Quite a stat!


Here at Friends of Traditional Banking we will be watching members of Congress carefully on this issue. As we make our recommendations to our list of thousands during the 2014 election cycle we will remember who supports a level playing field.   


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