Author offers insider’s look at Dodd-Frank negotiating

It’s hard to imagine the Independent Community Bankers of America not opposing major regulatory reform to address a financial crisis “not of their making,” but in 2009 as the Wall Street Reform and Consumer Protection Act came into being, neutrality was ICBA’s official stance..Years later in his book titled, “Act of Congress: How America’s Essential Institution Works, and How it Doesn’t,” author Robert G. Kaiser details a behind the scenes negotiation that occurred between Barney Frank, the Democratic Representative from Massachusetts who co-authored the massive regulatory reform bill, and Camden Fine, president and CEO of the ICBA.The sticking point for Fine was his opposition to a new Consumer Financial Protection agency that was coming into being through the legislation. Fine knew community banks had not created the problems with subprime mortgage lending, and he believed his constituents were already over-burdened by regulators.According to Kaiser’s reconstruction of the scene, Fine was in Rep. Frank’s office, where he was told, “there’s going to be a bill, and either you’re going have to get on the bus or be run over by it.”Yet Fine remained unfettered in his opposition to the new consumer-focused regulator, telling Frank that community banks were “being eaten alive by exams.”The two discussed the idea of limiting the jurisdiction of the new agency’s examiners to larger banks, settling on a standard of having the Bureau’s supervisory authority extend only to banks with assets in excess of $10 billion. That was a compromise Fine could get behind.Before he gave his assent to ICBA taking a neutral stance on the CFPB, however, Fine asked Frank about the Gutierrez amendment, a proposal to change the formula by which the FDIC determined a bank’s deposit insurance assessments. Historically, the DIF insurance premium was based on a bank’s deposits; the ICBA wanted the DIF insurance premiums to be based on a bank’s total assets. That would shift the cost burden to large banks.Frank agreed and the two shook hands. “This was the first big deal made on the path to what would become, nine months later, the Dodd-Frank bill,” Kaiser wrote.In an interview with BankBeat in 2018, Fine called Kaiser’s recounting “overly simplistic and not entirely accurate.” Fine said there were many other components to their discussion, and while ICBA was successful winning some favorable concessions and exemptions, it was unsuccessful in stopping other items it opposed.