Chairman's Message
Dear Fellow Community Bankers:
Undiluted Advocacy – this is the first guiding principle of the VACB. It is impossible to overstate its importance. Community banking, and community banks, continue to be challenged by an array of forces.
Let’s start with our bête noire, credit unions. Oh, to be tax free! To have a cheerleader as your primary regulator! To be touched lightly by the blessed hand of regulation! Add to this the growing trend of credit unions buying community banks. It is worth noting that in these transactions, credit unions receive some very favorable accounting treatment. For example, they don’t deduct goodwill from Tier 1 capital, and they can add back the retained earnings of banks they buy, even though they pay all cash. As credit unions act more and more like banks, they will more and more assume the risk profile of banks, if not more so because of less experience and expertise. When you then consider how relatively few options are available to credit unions to raise capital, consider a likely result when the next recession hits…taxpayer bailout for tax-free credit unions.
Compliance and regulatory burden continue to be significant issues for community banks and contribute to the continuing shrinkage in the number of community banks in the U. S. It is an unfortunate fact of life that community banks get hit disproportionately by these costs. The big banks can afford to hire the phalanx of lawyers, accountants, and compliance officers to deal with pretty much anything that Congress throws at them. By way of illustration, consider one of my favorite quotes from the opinion pages of the Wall Street Journal (7/21/14): “Several months ago J.P. Morgan Chase announced that it plans to hire 3,000 more compliance officers this year, to supplement the 7,000 brought on last year. At the same time, the bank will reduce its overall head count by 5,000.”
The VACB continues to engage directly with the Virginia delegation in Congress on these issues. We are very fortunate to have Steve Yeakel as our President & CEO. Steve has more than forty years’ experience in the political arena. He has proven to be a very effective advocate on Capitol Hill for Virginia community banks. I have accompanied Steve on lobbying visits over the past several years, and I can tell you that the reception we get pretty much across the board with the Virginia delegation has gotten much better. Without a doubt in my mind, I can affirm to you that the VACB is delivering on its promise of undiluted advocacy for the community bankers of Virginia.
In closing, let me say that I have a deep, abiding faith in the fundamental goodness of what we do. With each passing year, I become more convinced than ever that our everyday, humble work is a calling, a mission. Think about the many thousands of small businesses, families, friends, and neighbors whom you have helped to achieve financial success. It is beyond remarkable. It is profound.
Lloyd Harrison
Chairman
2019 - 2020
Undiluted Advocacy – this is the first guiding principle of the VACB. It is impossible to overstate its importance. Community banking, and community banks, continue to be challenged by an array of forces.
Let’s start with our bête noire, credit unions. Oh, to be tax free! To have a cheerleader as your primary regulator! To be touched lightly by the blessed hand of regulation! Add to this the growing trend of credit unions buying community banks. It is worth noting that in these transactions, credit unions receive some very favorable accounting treatment. For example, they don’t deduct goodwill from Tier 1 capital, and they can add back the retained earnings of banks they buy, even though they pay all cash. As credit unions act more and more like banks, they will more and more assume the risk profile of banks, if not more so because of less experience and expertise. When you then consider how relatively few options are available to credit unions to raise capital, consider a likely result when the next recession hits…taxpayer bailout for tax-free credit unions.
Compliance and regulatory burden continue to be significant issues for community banks and contribute to the continuing shrinkage in the number of community banks in the U. S. It is an unfortunate fact of life that community banks get hit disproportionately by these costs. The big banks can afford to hire the phalanx of lawyers, accountants, and compliance officers to deal with pretty much anything that Congress throws at them. By way of illustration, consider one of my favorite quotes from the opinion pages of the Wall Street Journal (7/21/14): “Several months ago J.P. Morgan Chase announced that it plans to hire 3,000 more compliance officers this year, to supplement the 7,000 brought on last year. At the same time, the bank will reduce its overall head count by 5,000.”
The VACB continues to engage directly with the Virginia delegation in Congress on these issues. We are very fortunate to have Steve Yeakel as our President & CEO. Steve has more than forty years’ experience in the political arena. He has proven to be a very effective advocate on Capitol Hill for Virginia community banks. I have accompanied Steve on lobbying visits over the past several years, and I can tell you that the reception we get pretty much across the board with the Virginia delegation has gotten much better. Without a doubt in my mind, I can affirm to you that the VACB is delivering on its promise of undiluted advocacy for the community bankers of Virginia.
In closing, let me say that I have a deep, abiding faith in the fundamental goodness of what we do. With each passing year, I become more convinced than ever that our everyday, humble work is a calling, a mission. Think about the many thousands of small businesses, families, friends, and neighbors whom you have helped to achieve financial success. It is beyond remarkable. It is profound.
Lloyd Harrison
Chairman
2019 - 2020
