January 13, 2011

 

This is a companion article to “The new round: housing finance,” both articles based on interviews with ABA’s top government relations officials. To read the main analysis, click here.  

  

                                                

With the controversial Dodd-Frank Act now in the implementation stage, bankers look to Congress for some remediation of the Act. But the centerpiece for banking in this Congress will be a very complicated debate over the future of housing finance for America. The centerpiece of that debate: resolution of the conservatorship of government-sponsored entities Fannie Mae and Freddie Mac.

 

 

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Americans sent Washington a message last November: “Get out of our lives.” The Dodd-Frank Act fits that description. But while there’s room for adjustment and revision of the act’s provisions, it may be some time before “how much” becomes apparent.

“There’s been a majority change in the House, and when you have the majority there, you run the railroad,” says ABA’s Floyd Stoner, executive vice-president, congressional relations. “When you get to the Senate, the Democrats don’t have as large a majority as they had had. But the President is still in the White House with a potential veto pen. So, regardless of what one might pass in the House, it’s still not clear what could either pass the Senate or, having passed the Senate, would likely be signed.”

Stoner, as part of ABA BJ interviews with ABA’s top three government relations officials in late December, spoke of the need to prioritize bankers’ Dodd-Frank concerns.

ABA spent the period between the Congresses preparing for key goals. One was calling for hearings in the financial services committees in both House and Senate on the impact of the current regulatory environment and Dodd-Frank on the future of community banks. The association continues to voice concerns over the Consumer Financial Protection Bureau. And ABA’s regulatory wing has been pursuing industry concerns in the implementation phase of Dodd-Frank, as proposals are made and even in advance.

Stoner indicated that it will take some time to identify who in the new Congress will get behind solutions to various issues the industry hopes to see addressed. “We’re going to have to have members willing to carry the legislation on particular issues,” says Stoner.

A priority has been, and will be, grassroots lobbying. “We have almost 100 new members of the House, plus 16 new members of the Senate,” says Stoner. “We’ll be working with our grassroots bankers to help them introduce themselves to new member of Congress, and to renew contact with reelected members and those carrying over, in the Senate.” ABA has long maintained, and will continue, a policy of working on both sides of the aisle.

 

 

With Republicans running the House, and rhetoric against Dodd-Frank already being publicized, will there be changes to it? “There’s been a majority change in the House, and when you have the majority there, you run the railroad,” says ABA’s Floyd Stoner, executive vice-president, congressional relations. “When you get to the Senate, the Democrats don’t have as large a majority as they had had. But the President is still in the White House with a potential veto pen. So, regardless of what one might pass in the House, it’s still not clear what could either pass the Senate or, having passed the Senate, would likely be signed.”

 

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“Many banking issues in the past, and, I predict, in the future, are not partisan issues,” says Stoner. “What happened over the last two years was an unfortunate anomaly, where issues became very partisan.”

ABA offers Dodd-Frank Tracker Trying to keep up with the torrent of Dodd-Frank Act developments? ABA offers its special Dodd-Frank Tracker website and a related email update service. Updates frequently come through several times a day, so widespread are issues related to Dodd-Frank implementation. To learn more about the Tracker, click here

The message ABA and bankers must send to Congress, according to Stoner, is: “Look at the burden we are facing today. And this is before Dodd-Frank is implemented.”

Initially, oversight hearings covering implementation of Dodd-Frank will be a key effort.

The importance of this cannot be overstressed. Prior to service at Treasury and then ABA, EVP Wayne Abernathy spent years as a top Senate Banking Committee official.

“Oversight is a critical part of the process,” says Abernathy. “In order to solve a problem, the first thing you have to do is sell people on the problem. Then you may be able to sell them on the solution. And hearings are an important means of identifying the problems.”

In spite of its thousands of pages of content, “one of the astonishing things about Dodd-Frank is that it leaves an enormous amount of latitude to the regulators in implementing it,” says Abernathy, who is in charge of financial institutions policy and regulatory affairs.

Inundated regulators face an impending “regulatory traffic jam,” Abernathy warns. “They really can’t do all the regulations they are supposed to produce, in the time they’ve been given to produce them.”

The possibility that Congress—already looking at some form of “technical corrections” legislation to mop up after Dodd-Frank—will be asked for more time may create an opportunity for a second look at some of the law’s provisions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                           

 

ABA’s top three government relations officials: Robert Davis, executive vice-president for mortgage finance, risk management, and public policy; Wayne Abernathy, executive vice-president, financial institutions policy and regulatory affairs; and Floyd Stoner, executive vice-president, congressional relations.

 

 

This is a companion article to “The new round: housing finance,” both articles based on interviews with ABA’s top government relations officials. To read the main analysis, click here.   

 

[This article was posted on January 13, 2011, on the website of ABA Banking Journal, www.ababj.com, and is copyright 2011 by the American Bankers Association.]