Frank Keating,” says an ABA colleague, “is made for the medium.” The “medium” being television. Actually, the former Governor of Oklahoma is at home speaking in front of any audience, whether it be a banker convention, a congressional committee, or one-on-one with a TV anchor.
It’s a valuable skill, and Keating has made full use of it in his first year as President and CEO of the ABA. All told, he did dozens of media interviews in 2011, many of them on national television. The latter have included ABC World News, CNBC, Fox Business News, Bloomberg, and MSNBC. Most of the appearances were related to financial issues, but some were on topics ranging from the federal budget deficit to national security. Keating’s varied background (besides being a governor, he was an FBI agent, assistant secretary of the Treasury, and a member of the Rivlin-Domenici Debt Reduction Task Force) makes him a sought-after guest on TV news shows.
As he points out, “If someone wants to talk to me about national security issues, I can say, ‘Remember, part of national security includes protection against cyber attacks on financial institutions,’ and then mention the indispensability of a healthy and well-functioning banking system.”
But in most cases, the questions are about banking issues, and here Keating believes that ABA’s high visibility in the media is a member service.
“Our 5,000 bank members,” he said in a recent interview, “spend their days visiting customers, providing services to depositors, borrowers, and clients. It’s the responsibility of their trade association to advance the positives of banking and the banking industry in America. We are their advocates.”
Also, he says, “ABA is there to take the arrows of justified or unjustified criticism of the industry, as opposed to individual banks having to do that.” An example was the interchange debate in which ABA explained why charges are required in order to provide the service.
“If I were a bank CEO,” Keating continues, “I’d like to be able to turn on CNBC or FOX or read a newspaper and see that my trade association is defending me against unfair criticism, or advancing a positive agenda.”
As much as he unhesitatingly defends the worth, indispensability, and integrity of the banking industry—and urges bankers to do the same—Keating is careful to always speak not about what’s best for bankers, but about what’s best for ordinary people—the depositors, borrowers, and stockholders of banks. He also does not hesitate to acknowledge reality.
“I’ve always found the best policy is just to tell the truth,” he says. “If the truth is not pleasant, the best thing to do is say, ‘Well, that was an error,’ or ‘That was an oversight, and here is what we’re going to do going forward.’ You cannot, in a free society, defend the indefensible. You cannot advance an agenda of falsehoods.
“We want to always be factual and be helpful to advance the interest of ordinary Americans,” Keating continues. “They have to trust us. That’s why to me integrity and bipartisanship are essential hallmarks for the success of the ABA.”
Don’t tread on me
Frank Keating knows politics. And he knows what it’s like to campaign for office, which he’s done successfully four times in Oklahoma (twice as governor; twice in the state legislature). It gets rough out there, and ugly. And while the former FBI agent doesn’t go so far as to embrace Sean Connery’s memorable line from the movie The Untouchables—“They pull a knife, you pull a gun. He sends one of yours to the hospital, you send one of his to the morgue”—Keating did say this at ABA’s Annual Convention this fall: “I took the position when I came aboard the ABA, every time somebody kicks us in the shins we will kick back.”
In the interview, he expanded on the point.
“It’s important to view what ABA does as a political campaign,” says Keating. “The best way to lose a campaign is not to respond to criticism—fair or unfair. To fair criticism you respond by saying, ‘Good point; we need to fix that.’ To unfair criticism you respond by saying, ‘It didn’t happen,’ or ‘You misunderstood’.” And you say it as often as necessary.
“Always be on the offense factually,” Keating sums up.
What if the criticism comes from the Commander-in-Chief?
Keating replies that many administrations are guided by polls and focus groups. And he understands that banks and bankers typically are viewed as a “political porcupine”—i.e. support them and you’ll get hurt. Nevertheless, the belief that banks are to blame for the 2008 financial crisis and resulting recession is wrong, he says.
According to the Government Accountability Office, 94% of the problems stemmed from the practices of nonregulated entities, not commercial banks, says Keating.
“I’m sure the Administration’s polling suggested, ‘Beat up on the banks and you’ll look good, because people don’t like banks’,” he says. “But I think it’s terribly unfair for a President not to be factual. The ‘banks’ that brought us to our knees were non-regulated financial institutions.”
In his media interviews, Keating corrects incorrect statements about banks by pointing out, for example, that small businesses in America create 40% of the private-sector jobs, and that most of the small-business lending is done by community banks. “So banks are good citizens,” he says. “They are not part of the problem, they are part of the solution.”
Concludes Keating: “You always have to be on the offense. If we are factual and aggressive and noisy and visible all the time on issues of importance to the industry, there will be people who will listen and be willing to help change a bad situation.”
“Go out and tell the story”
While the ABA provides much of the offense in setting the record straight about banking, Keating firmly believes this is not solely the trade group’s job.
“It’s the responsibility of each individual bank—each individual banker,” he says, “to advance not only the quality of their products, but the quality of their institution and the industry in general.”
As he explains, “If you were a car maker, and you convinced people your product was superior, you wouldn’t sell many of your cars if the public felt any car on the road was a pollution factory or dangerous. In other words, you have to make the industry itself acceptable to the public in addition to your own institution and its products.”
Keating urged bankers at the ABA Convention to “Go out and tell the story of this wonderful, indispensable industry.” It’s particularly important because only about 18% of the public have a positive view of banking, studies show. Further, the recent debate over debit card fees probably lowered that number, even though it is perfectly legitimate for banks to charge for the service. Yet Keating still thinks that the roughly 80% of people who say they have a positive view of their bank is a foundation from which banks can rebuild the industry’s overall image.
“Bank CEOs and employees are the perfect people to do this,” says Keating, “because they are leaders in their communities.” Without banks and bankers, communities would suffer—there would be no Main Street development programs, no service on local boards and commissions, etc. “Banks have to tell that story,” he says.
“Instead of knocking competitors or talking solely about their products,” Keating continues, “banks should put a human face on what they do in their town”—for example, telling how bank employees tutor at the local elementary school, which helps create a better-educated, more prosperous community.
“Bankers themselves have to be in the limelight selling the integrity of their institutions, the integrity of their industry, and the worthwhile nature of their products,” says Keating, and not just rely on ABA to do that. The association, he adds, helps by going on national television to respond and explain, but “the public ultimately will make its final decision not on the basis of what a trade association says but on the basis of what they see and hear in their community from banks and bankers.”
It’s one industry
Even though the industry lost the legislative battle to strike the Durbin Amendment from the Dodd-Frank Act, the second phase of that fight—persuading the Federal Reserve to come up with a realistic cost basis for determining the fee cap—resulted in a victory by comparison to what might have been done. Keating views that second fight as a great example of the benefits of a unified industry, something that was lacking in the lead-up to Dodd-Frank.
He describes how in meetings with the various other banking trade groups, as well as the two credit union associations, he urged that they all take a common position on the Fed’s interchange decision, which they did. “We spoke as one,” he says. “We had a common agenda, a common plan, and a common theme, even though around the edges we would have disagreements.” As a result, the industry succeeded in convincing the Fed to come out with a more realistic number.
Much of the criticism of banking that occurs in the media, among activist groups, and even from within the industry tends to feed the notion that there is not one industry, but two—the very large banks and the rest.
ABA, by definition, represents the entire industry and Keating is not hesitant to explain the benefits of doing so. During his first year, he visited many of the largest banks and promoted a change in the by-laws to permit three, one-year, at-large seats on ABA’s Board of Directors, with an eye to encouraging the large banks to be more active in the association. As he explains, “We want to cover the ground at 40,000 feet and 10,000 feet. A small-bank CEO speaking to his or her members of Congress is highly effective. A large-bank CEO speaking to the chairman of the Federal Reserve is highly effective. We need to use all our resources.”
Keating’s commitment to leveraging all of ABA’s member and staff resources has been noticed in Washington. In October, he was named by Association Trends magazine to an eight-person list of “effective” association lobbyists. And in December, First Street Research Group lauded Keating for his spirited advocacy efforts on behalf of bankers.
Keating has not only stepped up ABA’s lobbying, but “perhaps just as important…has been a high-profile, sometimes combative, spokesman for the industry,” the group said in a blog post. “At a time when bankers face stricter regulation, heightened reporting requirements and growing public resentment, he has come out swinging.”
And he’s only just begun.