The headlines in the financial press last week read that an unexpected bank tax was drawing major resistance from U.S. banks. Reading further, we found out that Republican lawmaker Dave Camp proposed the bank tax, the same party that received substantial financial support from banks during the 2012 elections.
Quick to react, Bank of America, Citigroup, Goldman Sachs, J.P. Morgan and other banks demonstrated unity by challenging the bank-tax proposal they believe directly impacts their industry. The moves were swift and impactful. For example, according to the Wall Street Journal, Goldman Sachs pulled out of a fundraiser last week for the National Republican Congressional Committee because of concerns about Mr. Camp’s bank-tax proposal. Banks also pressured lawmakers to publicly denounce the plan and on Friday, 54 Republicans signed a letter to Mr. Camp conveying “deep concerns” about the new tax. A lot of pressure was applied in a very short period of time.
The WSJ article went on to point out that the proposed tax stimulated banks in a way largely unseen since the financial crisis. While banks have pushed back on regulation in the past, they rarely act as one since the rules affect firms differently. “This time, banks large and small are coordinating on the resistance.” That is the real takeaway for ARM professionals across the U.S.
At a time when regulators are gathering ammunition for sweeping changes that will profoundly affect the ways ARM companies of all sizes service their clients, the ARM industry still does not have a unified voice on Capitol Hill.
Efforts are clearly underway from associations and individual groups as evidenced by the responses submitted regarding the CFPB’s Advance Notice of Proposed Rulemaking. Last week, insideARM President, Stephanie Eidelman wrote an excellent piece about the ARM industry coming together to address regulatory change. It sited direct examples of unity to address consumer groups and is worth re-reading.
I think we all recognize the impact of regulatory change will be severe and will be felt differently from company to company and from market segment to market segment. That said, we must continue to challenge the industry influencers to follow the banks’ lead and establish one voice that will be clearly heard on Capitol Hill.