In mid-December, I was watching primetime on MSNBC when I saw what appeared to be an ad for a small community bank. In it, a parade of bankers from Virginia to New Mexico (oddly, all of whom were white) extolled the virtues of 24 hour fraud protection, and a South Dakota-based banker named Nate tells his customers, who are uncomfortably grabbing their neckties, that he doesn’t like business-wear either. I was surprised to see what appeared to be a PR campaign for community bankers — after all, why spend the money? But the ad’s sponsor wasn’t a community bank. Instead, the ad came from one of the most sophisticated and powerful Washington lobbying groups, the American Banker’s Association (ABA). The folksy nature of the ad belies the kind of lobbying that remains at the heart of the ABA: advocating for the biggest banks, while using small banks as a PR human shield.
Rose-colored ads aimed at repairing the reputational damage done to megabanks are not novel on cable news. But to see an ad run by the ABA was new to me. And it is, indeed, new: ABA spokesman John Hall told the Washington Business Journal the campaign “is the ABA’s first nationwide television campaign since the 1990s.” The Washington Business Journal noted that the ads come at a time when America’s opinion of bankers continues to slide:
“A new Gallup poll shows 23 percent of Americans have a ‘very high’ or ‘high’ opinion about the honesty and ethical standards of bankers, down four percentage points from last year. Nurses topped the list at 80 percent, while Congress pulled up the rear at 7 percent.”
While declining public perception of bankers is a plausible reason for the ABA to run an ad campaign, I still found myself asking the question: who’s the target audience? While the average viewer of cable news may be familiar with the names and misdeeds of large banks like Citigroup or JPMorgan, they’ve probably never heard of the American Bankers Association. The only people who’ve actually heard of the ABA are policy wonks or finance nerds like myself, and why waste a whole ad buy on them?
But perhaps the ads aren’t meant for the audience watching it. Perhaps it’s instead meant for the community bankers who are profiled in it.
There are three ads in total, and the ABA has proudly listed on its website all the networks and shows the ads have aired on, including Meet the Press, CNBC’s Closing Bell, and CNN’s The Situation Room. If the ABA is aiming to butter up community bankers, it appears to be working: Bruce Whitehurst, CEO of the Virginia Bankers Association, told Mark Hoplan of the Washington Business Journal that he was “flattered” to take part in the ad campaign.
As the fight over the “CRomnibus” showed — with Senator Elizabeth Warren issuing a nearly ten-minute tirade against Citigroup on the Senate floor — the nation’s largest banks remain toxic in Washington (at least when it comes to PR).
The ABA needs community bankers to be the face of its ongoing lobbying.
But will a feel-good PR campaign, and big-time TV exposure for a handful of small bank CEOs, be enough to salvage the ongoing damage that the ABA is wreaking on banking overall, as they continue to lobby first and foremost for the interests of the biggest banks?
In her book Bull By the Horns, former Chair of the Federal Deposit Insurance Corporation (FDIC) Sheila Bair noted how the ABA, which encompasses both community banks and megabanks, has a “conflicted membership.” Bair said the ABA was “hostile to any regulator who dared to express views independent of the industry’s.” She also noted that while the ABA portends to represent all banks, they seem most focused on the agenda of the biggest ones:
“The ABA…seldom supported [the FDIC] on anything. What’s more, it seemed more interested in protecting the interests of the mega banks, with their far-flung securities and derivatives activities, than it did in advocating the interests of the traditional banker.”
Bair also notes that the ABA replaced its old director, Edward Yingling, a “well-regarded banking attorney,” with Frank Keating, who Bair calls “a professional Washington lobbyist known for his combative, anti-regulation views.” Keating is still CEO of the ABA, though he plans to step down at the end of 2015. In a speech to an ABA conference marking the end of her tenure at the FDIC, Bair was rather famously heckled by the ABA attendees when trying to explain all the ways regulators and Congress worked to spare community banks from increased regulation after the crisis. Bair went on to say in her book that the Washington, DC leadership team of the ABA had “whipped up” the conference attendees prior to her speech.
All three of the ABA’s ads end with the proclamation, “we’re America’s hometown bankers.” But a quick look at the last few comment letters by the American Banker’s Association shows that their advocacy is anything but “hometown.” In December, they complained about the challenges of complying with sanctions against the Ukraine. In November, they lobbied against imposing margin requirements on certain types of derivatives transactions between affiliates within large, complex corporations. And earlier that same month, the ABA argued against further regulation by the Department of Labor to ensure participants in certain retirement plans are not exposed to undue risks.
And when the ABA does lobby on issues that could be considered “hometown,” they’re lobbying pretty unsympathetic positions. On December 18th, the ABA wrote a letter lobbying against new protections for military families against predatory lending, arguing it may “deprive them of valuable and beneficial mainstream products.” As I wrote previously, the ABA also lobbied against more transparency for consumer complaints about banks. And the ABA even opposes mere information-gathering exercises by the Consumer Financial Protection Bureau (CFPB). In August, the ABA opposed the CFPB conducting a consumer survey on their interactions with debt collectors. And in June, they spoke out against a proposed CFPB phone survey of 1,000 borrowers about how well they understood the terms of their credit cards.
The ABA hasn’t revealed how much money they’ve spent on this ad campaign. But ABA spokesman John Hall did tell the Washington Business Journal that the ad buy was “timed to leverage positive changes in the national economy” and that the ABA is “looking to begin a new day.”
So the ABA took to the airwaves with ads exalting “24-hour ATM machines” — ironically enough, the only “useful financial innovation of the last 20 years,” according to former Fed Chairman Paul Volcker. I suppose it makes sense for the association representing global megabanks to soften their image with some nice, hometown community bankers. But given ABA’s track record, I’m left wondering if being the face of an association that lobbies against, say, protections for military families is the kind of “new day” the community bankers in this ad should really be striving for.