Virtual lobbying between community bankers and Minnesota’s Washington delegation is unfolding this week as part of the ICBA Capital Summit.
In sessions that have lasted between 10 and 20 minutes, community bankers met with Senators Tina Smith and Amy Kobuchar, and Reps. Angie Craig and Dean Phillips and Pete Stauber, who represent House Districts 2, 3 and 8, respectively.
Sen. Klobuchar acknowledged that the Paycheck Protection Program was “not easy.” All of the lawmakers thanked community bankers for their work implementing PPP loans and “being there for their communities,” as Sen. Klobuchar put it. In three sessions, Anita Drentlaw, incoming chair of the ICBM, explained how the PPP impacted her Elko New Market-based institution, which in three months grew by $50 million by processing 360 PPP loans, half of which came from new customers that had been ignored by large banks.
Saying he wants to bridge the economic divide between urban and rural areas, Rep. Phillips said he understands the differences between large and small banks. “I am one of the few congressmen who understands that not all bankers are created equal,” Rep. Phillips said.
Rep. Phillips’ comments came as bankers explained their interest in passing the Enhancing Credit Opportunities for Rural America Act, or ECORA Act. None of the lawmakers that met with ICBM bankers this week were familiar with ECORA, but all of them promised to learn and study the bill. Senators Smith and Klobuchar listened intently to Peter Nelson, Glenwood State Bank, as he explained how ECORA would allow community banks to pass savings to its rural customers because it would allow banks to make ag loans on a more competitive basis to tax-exempt lenders.
A community bankers’ ability to stay viable, Nelson said, was at the heart of why ECORA was needed.
Rep. Phillips said he supports efforts which encourage the flow of capital to all areas of the state, including rural areas. He said he values what community banks do to bring capital to areas ignored by other lenders.
Rep. Craig, who serves on the House Ag Committee, pledged to take a look at ECORA and put it on her staff’s next legislative meeting.
Addressing the fate of the SAFE Banking Act, Sen. Smith called it a “commonsense” piece of legislation. “You have good community banks like yours that end up in a risk situation, ” she said. Senators Smith and Klobuchar are both co-sponsors of the SAFE Banking Act, but the future of the bill is unclear. “The issue is we should also be making headway on the other issues related to cannabis?” Smith asked. “How do you move forward on one issue without the other?”
During his April 28 time with bankers, Rep. Phillips criticized the House Banking Committee for being overly focused on the largest banks. A former member of the committee, Rep. Phillips said banking committee members should “take a bipartisan retreat every year to get educated. When I was on the banking committee, we didn’t hear enough from community bankers,” he added “The committee really needs to hear from them.”
Dwight Larsen, president of United Bankers’ Bank, urged Rep. Phillips to advocate for “carve outs” for community banks when congress considers new banking legislation.
On the topic of closing ILC loopholes to prevent the “Facebooks” of the world from gaining access to a bank charter, Sen. Klobuchar was receptive. “Bigger is not always better,” she said.
Though Sen. Klobuchar was neither up-to-speed on the topic of ILC loopholes nor the spate of credit unions buying community banks thereby removing a tax-paying entity from the federal tax rolls, she pledged to study up on both issues.
Minnesota community bankers are encouraged to follow up with their Senators and Representatives on ICBM Legislative Priorities.
Sessions with House District One Representative Jim Hagedorn, District Seven Representative Michele Fischbach, and District Five Representative Ilhan Omar were scheduled for later in the week. Session with Reps. McCollum and Emmer are scheduled for next week.