One of the most rewarding activities that is part of my role at the NBA is visiting with K-12 and college students and educators. These interactions often include a presentation highlighting the size and scope of the Nebraska banking industry, an overview of NBA priorities and industry advocacy and, finally, touching on issues that keep bankers awake at night. Discussions about the current issues confronting the industry always seem to garner the most student and educator attention, specifically, the issue of non-bank competition.
Bankers recognize that non-bank competition comes in many forms, ranging from the tax-subsidized Farm Credit
System (FCS) and credit unions (CUs) to online and private-equity lenders. New digital asset or cryptocurrency companies could also be included in this mix. During our discussions, it is clear that students and educators have little or no understanding of the capital and regulatory disadvantages between Nebraska banks and non-bank competitors. “That’s not fair,” is the typical reaction to these conversations. We clearly agree!
The reoccurring pro-banking message I try to communicate to students and educators is that Nebraska banks operate in
almost every community in the state, unlike many non-bank competitors, FCS in particular. Many are increasingly moving to large, regional lending offices and a virtual presence and abandoning a local footprint or representation. Nebraska banks are community and customer-driven and partners in local communities. This was exemplified by the banking industry’s efforts during the Paycheck Protection Program.
Conversations about the tax-subsidized FCS and CUs are often the favorite part of my interactions with students and
educators. Outside of the occasional college student, very few in the audience understand that FCS and CUs do not pay their fair share of the tax burden. This conversation is even more fun to have with educators who are discussing the lack of tax support for their local districts yet conduct their financial services through an educator/educational credit union. At the college level, I frequently discuss how the state of Nebraska uses state tax dollars to offset approximately 50% of the tuition costs for students enrolled in a public college or university. Nebraska banks contribute to higher education support via payment of the financial institution tax. FCS and federally chartered CUs obviously do not do their fair share to support important public services like education and safety. These arguments seem to really resonate with both students and educators.
Unfortunately, students and educators often reference and believe the misguided marketing suggesting that online
lenders deliver financial products faster and at a lower cost. Nebraska banks routinely demonstrate that those marketing campaigns by online lenders are simply that, marketing, not actual performance. Educators who have experienced a hail claim during this summer’s storms, for example, know firsthand the importance of having a Nebraska bank at the center of getting their insurance claim finalized! Or, how about those recent college graduates trying to buy their first home without a strong credit score or a consistent income stream? Nebraska banks will work diligently with these young people to make their dreams a reality!
Discussions with students about the role of cryptocurrency and digital assets in the financial system are also very
enlightening. A show of hands by students during a recent University of Nebraska Omaha College of Business
presentation showed that every student in the class owned some level of cryptocurrency. I always work to bring our
discussions back to the importance of how Nebraska bank deposits provide safety and security not offered in the crypto
space. After the recent cryptocurrency price decline, I suspect future conversations about this topic will change drastically.
We know COVID impacts and new technologies will continue to foster the emergence and evolution of our nonbank
competitors. Therefore, it is paramount that each bank and banker take every opportunity to educate and inform
customers of all ages and elected officials about the strength, stability and commitment of Nebraska’s banks to the future success of our customers, communities and state. We need to keep beating the drum!
