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Four letters that need better explaining

People used to argue about what a “bank” was. Now the issue is what a bank isn’t

If you find the range of federal programs intended to address the economic crisis daunting to remember, don’t feel too badly. Even those at the center of it all get fuddled.


During ABA’s Government Relations Summit, House Financial Services Committee Chairman Barney Frank told assembled bankers of a recent meeting he’d attended where Secretary of the Treasury Timothy Geithner was discussing some of the government’s efforts and options.

“Geithner said, ‘I’m a little concerned about TURF’,” the Massachusetts Democrat recalled, “and I thought he was using a new acronym.” With TARP, TALF, and more, Frank’s error, and mental capitalization of Geithner’s word, was understandable.

“But no,” said Frank, “he was talking about jurisdictional issues.”

Confusion of one sort or another seems endemic with today’s times, right down to four little letters, which spell “bank.” ABA and its members have had fits over the nonbank institutions that are blithely lumped under the word “bank” in media coverage and political discussions, so much so that the theme of the summit was: “Traditional Banking: The engine of the economic recovery.”

During the conference ABA showed video clips of the efforts the association has made in media interviews and testimony to put some distance between the players who contributed to the crisis and those who were caught up in it despite no participation in activities that brought things down. (You can view the clips online at “ABA On The Air”.)

The atmosphere has been so toxic, that one of the first sentences out of ABA President Ed Yingling’s mouth at the meeting was, “The climate is terrible. … I’m ‘enjoying’ this week because the automobile companies are on the front page, instead of us.” He also referred to the shot that President Obama took at banks during his Address to Congress, and the frustration he and members felt. Yingling had followed up that speech by writing to the President, asking, “please don’t keep using the term ‘bank’ so broadly.”

Yingling put his followup in perspective for the assembled bankers, demonstrating some elements of lobbying tradecraft.

“You don’t write the letter so you can hear the President say, ‘Oh my God, I was wrong’,” he said with a wry smile. That never happens. “The letter enables you to generate press interest, which enables you to get your piece said.”

Whether confusion among press and public is national or local, a clear message from the summit was this: If bankers want the truth known about their institutions and their industry, it’s up to them to communicate that message. If they leave a vacuum unfilled, it will be occupied by mistakes and distortions.

ABA Chairman Arthur Connelly, chairman of South Shore Bancorp, Weymouth, Mass., told bankers of a meeting the ABA Board of Directors had with Federal Reserve Board Chairman Ben Bernanke on the eve of the summit. Among the points Connelly brought back was news of Bernanke’s sympathy for banks’ position of being blamed for much that belongs on nonbanks’ doorstep.

However, Connelly said, while Bernanke extended sympathy and understanding, he made it clear to the bankers that they are on their own to deliver that message to the media and to Congress.

ABA Chief Operating Officer Diane Casey-Landry and ABA Chief Economist Jim Chessen both urged bankers to prepare specific stories about companies back home that have been assisted by their lending. Real stories about real successes make critical points, they said.

For his part, putting the confusion at the beginning of this piece to the side, Barney Frank said he understands the difference between traditional, regulated bank lenders and some of the entities that brought on the economic crunch.

“There has been great looseness in the talk about banks,” said Frank, adding that if only regulated institutions had made loans in the past period, the country wouldn’t be in a state of crisis.

ABA Banking Journal’s April print edition cover story details how banks can carry their message to the media and the public.
Steve Cocheo

Steve Cocheo’s career in business journalism has taken him to all 50 states and nearly every corner of banking in institutions of all sizes. He is executive editor of ABA Banking Journal, digital content manager of ababj.com, and editor of ABA Bank Directors Briefing. He coordinates the popular Pass the Aspirin and First Person features and wrote the booklet series Focus On The Bank Director. He is the only journalist to have sat in on three federal banking exams, was a finalist for the Jesse H. Neal national business journalism awards, and a winner of multiple awards from the American Society of Business Publication Editors.

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