Pub. 7 2012-2013 Issue 4

November | December 2012 11 Extraordinary Service for Extraordinary Members. What happens when a candle is deprived of oxygen? The flame goes out, of course. W HAT HAPPENS WHEN BANKS are faced with more than 10,000 pages of proposed and final rules in just two years? Their ability to effectively sup- port their customers, communities, and local economies begins to sputter. This is counterproductive, and our job is to continue to explain why. In his book, “The Coming Jobs War,” Gallup Chairman Jim Clifton writes about the important relation- ship between small businesses and job growth. Clifton’s view: “Very few Americans are aware that small and medium-sized businesses are respon- sible for most of the jobs in America. “During the past two decades in the U.S., small and medium-sized enterprises have accounted for virtu- ally all new jobs created,” Clifton said. “Jumbo-sized American businesses are very important to the economic ecosystem because they employ a lot of people, but mostly because they’re the key customers of small to medium-sized companies.” If few Americans understand small business’ contributions to the economy, even fewer appreciate banks’ role in supporting and grow- ing those businesses. That’s where you come in. Bankers need to continue to con- nect the dots—for policymakers and the public. We need to demonstrate the nexus between a healthy regulation of the banking industry and a vibrant economy that supports small busi- nesses and jobs growth. Some banks have driven that mes- sage home by inviting their lawmakers to the bank and showing them—liter- ally—the volume of rules and paper- work that the bank’s employees must navigate daily. A show-and-tell meet- ing like this is not only memorable, it also helps build relationships with your elected representatives. In addition, it can engage your frontline and back- room staff in the most critical policy issue facing banking today. Others have made the more-is- less point about regulation in their comment letters on the Basel III capital proposals. “Even though our current capital would only be mar- ginally affected at the present, these proposed rules will hamper flexibility for customer service and growth in the future,” wrote the CEO of one $85 million bank. The CEO of a $650 million bank serving primarily business custom- ers wrote: “We like most other com- munity banks in our country want to make sure we are able to continue serving our communities in the way we have in the past. A strong econo- my is dependent on job growth and job growth is dependent on avail- ability of capital to fund the small businesses of our communities that produce most of the jobs. We want to ensure that the new rules do not reduce the ability of our community banks to provide this capital.” That’s a simple, straightforward message that explains how a decision in Washington could reverberate in communities across the country. The more bankers bring that point home for lawmakers and regulators—in let- ters, calls, and visits—the closer we will come to smart bank regulation that supports, rather than extinguishes, economic growth. Z Washington Update Connecting the Dots Frank Keating , President & CEO, American Bankers Association Reach Frank Keating by email at fkeating@aba.com.