More than 100 Texas bankers visit lawmakers at the ABA Washington Summit
The ABA Washington Summit, held from March 20-22, brought together bankers from across the country, providing them with invaluable learning opportunities and a platform to discuss critical issues affecting the banking industry. More than 100 Texas bankers formed a strong delegation that made their presence felt on Capitol Hill during this crucial event.
The safety and soundness of the banking system took center stage during the discussions. While Texas boasts one of the strongest and most stable banking systems in the nation, recent failures of banks like Silicon Valley Bank (SVB) in California and Signature Bank in New York have shaken confidence at a national level. Recognizing the urgent need for reform, the Texas
Bankers Association conveyed a clear message that the deposit insurance framework requires immediate attention to protect deposits and customers of all banks, particularly community and regional banks.
To restore stability to the U.S. banking system while Congress deliberates on comprehensive reforms, TBA suggested the temporary extension of TAG-like unlimited deposit insurance. This measure would help instill confidence and prevent deposit runs that could have a contagion effect. During Treasury Secretary Janet Yellen’s address to the ABA Summit, she acknowledged the necessity of government intervention to protect the broader banking system in response to the SVB and Signature Bank crises. However, her subsequent testimony before Congress seemed to backtrack on the idea of blanket insurance or guarantees for all deposits, further highlighting the need for clarity and certainty in deposit insurance policies.
Apart from advocating for deposit insurance reform, TBA members also called for more effective oversight of federal regulators. Instead of advocating for increased regulation and government control, as proposed by President Biden and progressive voices like Senator Elizabeth Warren, TBA urged regulators to focus on safety and soundness rather than politicizing banking with ideological and social agendas. Additionally, the delegation emphasized the importance of criminal liability for those who intentionally or negligently incite bank runs, as such actions can have dire consequences for the stability of the banking system.
The discussions also touched on holding the Consumer Financial Protection Bureau (CFPB) accountable and supporting rural and agricultural community banks through the passage of the ACRE Act. These measures would provide much-needed relief and support to banks serving these vital sectors. Among the dozens of offices visited, the TBA delegation had the opportunity to meet with Senator Ted Cruz and hosted former FDIC Chair Jelena McWilliams, demonstrating the accessibility and engagement of key policymakers.
Following the ABA Washington Summit, our work continues to ensure the resilience of the banking industry by continuously following up with Members of Congress and their staff, persistently advocating for the industry. Given the challenging political landscape and ideological divides, achieving these reforms will be an uphill battle. However, the importance of safeguarding the banking system from potential shocks demands unwavering determination and commitment.
Amidst the ongoing debates and discussions, the inconsistent messaging from Treasury Secretary Janet Yellen raises concerns. To instill confidence in the banking system, it is imperative for Secretary Yellen to clearly communicate a plan that goes beyond mere talking points. Effective and consistent communication is crucial for maintaining stability and trust in the financial sector.
As the banking industry prepares for the road ahead, it is clear that the ABA Washington Summit served as a vital platform for Texas bankers to make their voices heard. Their commitment to securing the banking system’s stability, protecting customers and promoting responsible reforms sets an inspiring example for the industry as a whole. By working collectively, bankers can drive positive change and ensure a resilient and trustworthy banking system for all.
We look forward to seeing even more bankers join us next year.