Wall Street is using you, key lobbyist warns small banks
Community banks have appeared to be unified with Wall Street's goliaths in opposing the regulatory overhaul legislation pending in Washington, as The Times reported on June 10.
That was the case despite the fact that, as consumer advocates pointed out, the small banks were exempted from many of the proposed law's provisions. For example, they were not subject to routine supervision by a new Federal Reserve agency to be set up for the sole purpose of protecting consumers from financial abuse.
But now a key lobbyist for smaller banks is advising them to quit siding with the giants that caused the economic meltdown in the first place. To do so, he says, would be to squander the high regard in which community banks currently are held as champions of small business that had nothing to do with toxic mortgages and the securities linked to them.
Camden Fine, head of the Independent Community Bankers of America, sent an e-mail to state bank trade executives in late June warning that Wall Street is using smaller lenders -- his group represents 5,000 of them -- as pawns in the battle to derail the legislation.
Bloomberg News obtained a copy of the e-mail, which includes colorful as well as vulgar language, in which Fine warns small bankers they risk losing many of the important exemptions they fought for if they work to defeat the legislation ahead of a final Senate vote this month.
Those who side with Wall Street in this battle “are turning the gun on themselves,” he wrote, describing Wall Street's lack of regard for smaller financial institutions.
“They only care about the credibility small banks can wield on Capitol Hill to get them out from under this rock,” Fine said.
Fine didn't respond to requests for comment from The Times.
The American Bankers Assn., which represents banks of all sizes, had circulated a long list of problems it said would affect community banks if the legislation went through. The ABA continues to lobby against the bill as creating too many burdens on financial firms of all sizes.
-- E. Scott Reckard