Friends of Traditional Banking logoBanking & Politics Report
May 28, 2014


Banker French Hill wins Arkansas primary 


Last Tuesday's primary elections were a big step forward in setting the table for November's historic Congressional elections, and Friends of Traditional Banking is carefully watching a number of races. 


One we watched in the recent primaries was the battle in Arkansas' 2nd congressional district, where Little Rock banker French Hill and state rep Ann Clemmer battled for the GOP nomination to succeed retiring Rep. Tom Griffin (R). Credit union groups backed Clemmer, and lamented her loss.


Hill is the founder and CEO of Delta Trust and Banking Corp., and a former Deputy Assistant Secretary of the U.S. Treasury serving under President George H.W. Bush.


"The federal government needs to make sure its regulatory regime is not inhibiting economic growth in our country," he said. Hill will face former North Little Rock Mayor Pat Hays (D) in November.


"Best Regulation for a Bank is its Customers," says Huckabee


Last week, on his eponymous Fox News program, former Arkansas Governor and presidential candidate Mike Huckabee, delivered some insights on how Dodd-Frank is hurting the American people by crippling community bankers.


Some highlights included:


"Thanks to the geniuses in Washington, your local community banker has been saddled with federal regulations that were created to 'fix' the problems of the financial meltdown of 2008. Just one itty bitty problem. Your local banker had nothing to do with the meltdown, other than having to follow other idiotic federal mandates that required them to loan money to people who were buying more than they could afford."


"Congress stuck it to your local bank. And in so doing, they stuck it to you.


What used to be a routine loan process to buy a home, a car, or a boat, maybe start up a small business, or add on a room -- all that changed dramatically. The banker no longer made that decision on the basis of knowing you, and your work. Maybe knowing something about your assets, or your family. It all got reduced to looking at sterile rules designed by the people who don't know you, never will and who live 1,000 miles from you. Basically, power was removed from the people who know you best to those who know you least."


It's worth clicking here to watch the three minute video clip. Thanks for understanding, Huck!



Average bank regulator earns nearly 3x average bank employee

Last month, Paul Kupiec, resident scholar at the American Enterprise Institute, wrote in the Wall Street Journal that average salaries for all employees at OCC, FDIC and CFPB exceeded $190,000 in 2012 while the average salary for a bank employee that year was $49,540. 
The gap between the regulators and those they regulate is getting worse. "Before the Dodd-Frank Act, the average employee of a federal bank regulatory agency received 2.3 times the average compensation of a private banker," Kupiec wrote. "By 2013 this ratio increased to more than 2.7-and in some cases considerably more."
Kupiec points out that these numbers aren't just skewed by a few high wage earners, but that wages at all levels are bloated. "At the OCC, secretaries make on average $79,182 per annum," he reveals. "Human resources management trainees at the CFPB make $110,759 a year." In fact, "Fewer than 7% of employees in any of these regulatory agencies earned less than $50,000."
The direct cost of banking regulation would be cut in half if the average regulatory agencies' wages were in line with the industry they regulated.

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