An update from the ICBA chair

Hundreds of bankers participated in a Capital Summit conducted by the Independent Community Bankers of America on May 12-15 in Washington, D.C..Jack Hopkins of CorTrust Bank, Mitchell, S.D., who was named ICBA chair two months earlier, participated in the annual event. BankBeat magazine caught up with Hopkins upon his return to get his thoughts on the current state of affairs on Capitol Hill, as well as among bankers from throughout the country. Top of mind for both members of Congress and the ICBA was the GENIUS Act, which would establish a regulatory framework for stablecoins. The Senate passed the bill on June 17, while the House is expected to address its version of the legislation in the coming weeks.This interview has been edited for length and clarity..How have your first couple months been as ICBA chair?Jack Hopkins: Things are, in the last couple of weeks, starting to ramp up for us. I can’t say it’s been much different than the last couple of years have been up to this point, but with the new administration coming in, there’s a lot of legislation that’s pending. Although most of the activity has been around agency heads and his appointments.The legislative side of President Trump’s agenda is starting to heat up. Obviously, we saw that his big tax bill came out of committee, so it’s working its way through. We’ll see how that plays out. And there’s a few other bills that are obviously of interest to bankers right now, so we’re monitoring things. I’m on pretty regular calls, texts, emails with senior staff of ICBA, and they’re looking for feedback — and sometimes I’m giving them the banker’s perspective — but they’ve got a good banking background there, too.What bills are you focused on?J.H.: Right now the one they’re trying to push through the hardest that probably would give some bankers heartburn, is the GENIUS Act. What they’re trying to do with it could potentially damage the banking system, so we’re trying to make sure that the banking system is protected, that it’s regulated appropriately.I understand it’s a payment system, but I’m still not seeing a real strong use case for it. Nobody’s been able to point to a strong use case at this point other than that stablecoin is out there, and it should be regulated. We want to make sure that whatever they do doesn’t dis-intermediate the banking system, and it makes everybody play by the same rules.How did legislators respond to your concerns during the Washington Summit?J.H.: From the legislative point of view, it’s kind of a mixed bag. Most of them understood our concerns. They’re trying to work around our concerns, but there’s a lot of pressure coming from the stablecoin industry, so they’re trying to find the middle ground, which in a couple of areas there is no middle ground. It’ll be interesting to see how that plays out. That was probably the biggest one that the bankers were talking about out there, because that is the one legislators seem to be pushing the hardest on. They seem to be in a rush to get it done, in my opinion. We understand they want to get something passed; we want it done right. We want them to put thoughtful legislation in place and make sure that loopholes are closed and everybody’s playing by the same rules.Why are they rushing to pass the GENIUS Act?J.H.: It’s probably the president’s No. 1 agenda item, that and the tax bill. They’re saying that they need to get something in place before foreign countries get things in place, that we’ll set the standards. I agree with that to a certain extent, but, again, let’s make sure we do it right. Let’s not rush to get something done, and then live to regret it.Describe the atmosphere for community bankers following the 2024 election.J.H.: It’s pretty positive. Obviously the last four years in particular, we had a mountain of regulations come down on us, and bankers are optimistic we can get some of these bad rules that haven’t been put in place either rolled back to something more reasonable or completely eliminated, depending on what the rule is.There are some things out there that we think are just bad rules. Section 1071 is a perfect example. They’re trying to, in my opinion, regulate commercial lending the same way they do home lending, but houses are a homogeneous product and it kind of fits in a box. Commercial lending is a lot more artful and creative, and it needs to be, because that’s been the strength of community banking all along, and it’s the strength of the United States’ entrepreneurial spirit.That’s the top of mind of things that need to be rolled back. We’d love to see it done legislatively, whether we have the votes or not remains to be seen.Thoughts on efforts to wind down the Consumer Financial Protection Bureau?J.H.: It would take an act of Congress to wind down the CFPB, and then, where is the rule writing authority going to lie? As much as we like to dislike the regulatory side of the agency, we still need somebody to write rules and somebody to rescind bad rules. The basic flaw with the CFPB is still the governance. It reports to no one, has no oversight, unlike any other federal agency. It got to be a rogue agency with way too much power and no oversight. Under previous rule writing, at least there was consultation with everybody in the markets.And there is no consultation. Rules are rolled out, take them whether you like them or not. And they don’t always make sense. My problem is, most of the people writing those rules have never, in my opinion, worked in the real world. They’re a bunch of attorneys who have never worked in private industry, and didn’t seek input as to how we could make them work. It’s not that we are totally opposed to regulation, but we want to make sure it’s regulation we can all live with and it’s treating everybody fairly. The tax exemption for credit unions was not included in the tax bill. Are you confident that it will eventually be eliminated?J.H.: I don’t know that it’s off the table. I do know it will be a challenge. We understand that, but I think the more the credit unions — I’m gonna parse it and say it’s the large credit unions, because the top 20 percent of the credit unions control 80 percent of their assets. They are not living by their mission. The smaller credit unions have continued to do what they’re doing, but the larger ones have strayed too far.The largest project we had done in the city of Sioux Falls was an out-of-state credit union. What are they doing in our market? We had a group of community banks willing to do the project, but an out-of-state credit union came in to take us out of the project. As time goes on, we hope that as they continue to look at these tax bills, that they look at that to pay for some of the tax cuts they want to give to every other American.How’s your schedule?J.H.: The schedule is going to start ramping up. And then I’ll find myself out of town for a fair amount of July. That’s the heavy convention season, and then again in September, it gets to be pretty heavy again. June is probably my busiest month. But I knew what I was signing up for and when I was doing it. I enjoy getting out and meeting bankers from other parts of the country. You find out we have an awful lot in common.I’ve made great friendships being able to do that. And it’s a great way to share ideas about, how are you doing this? How are you dealing with this regulation? We share a lot of ideas and my staff hates it because every time I come home I say, ‘Hey, I heard this bank was doing this. I think this is a good idea’.”Describe your goals for the rest of your term.J.H.: I hope that I can help inspire younger bankers to get more actively involved. We would love to have junior leadership more actively involved in day to day to understand the value of the community bank model. We don’t want them just coming to work and getting their paycheck. We want them to understand the value we bring to their communities. The way we do that is by getting them involved in the state and national associations, and coming to the meetings and helping with the lobbying, writing the letters to their congressmen or senators and/or to the regulators. I’m hoping to help inspire the younger group of bankers to do that. I started doing it at a fairly young age and I got hooked on it.