South Texas Banker Learns Limits of Support for Trump

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Steel bollard can be seen atop a concrete wall as it lines the banks of the Rio Grande near McAllen, Texas.

Flickr / Glenn Fawcett for U.S. Customs and Border Protection

Steel bollard can be seen atop a concrete wall as it lines the banks of the Rio Grande near McAllen, Texas.

Two and a half years ago Dennis Nixon stunned some members of San Antonio’s business community not only by endorsing Donald Trump, but by signing on as one of his top Texas fundraisers. He personally would donate more than $100,000 to Trump’s campaign and the Republican National Committee.

What so startled his fellow business leaders was that IBC, the bank Nixon heads, is a leader in promoting and funding economic ties between the United States and Mexico. Its customer base is heavy with Mexicans doing business in the U.S. and Americans doing business in Mexico. Quite a few South Texas businessmen gave to Trump’s campaign, but few with such ties to Mexico. IBC Bank is prominent in San Antonio, but it is headquartered in Laredo, just blocks from the border.

So why was Nixon supporting a presidential candidate who began his campaign by accusing Mexico of sending us “people that have a lot of problems, and they’re bringing those problems with them. They’re bringing drugs. They’re bringing crime. They’re rapists.” Later he would call them “animals.” Why was Nixon endorsing this man who enraged Mexicans, a significant portion of his customer base, by repeating as his signature campaign rally cry a pledge to build a massive wall between the two countries and forcing Mexico to pay for it? A man who called NAFTA, the trade pact that has been great for IBC and Texas (think Toyota in San Antonio), “perhaps the worst trade deal ever made” and threatened to void it?

Nixon’s explanation was simple. In the wake of the 2008 near-collapse of the financial system that had forced the government to bail out the nation’s biggest banks, Democrats under President Barack Obama had enacted new regulations. Many of those regulations, Nixon said, were crippling small and medium-sized banks such as his. It was, he suggested, an existential crisis. And despite all the money that she had famously taken from Wall Street, it seems, he couldn’t count on Hillary Clinton to solve the problem.

In addition, he suggested, if Trump was elected it would be good for people like him to have his ear.

For some time, Nixon’s decision appeared to be smart. After Congress passed and Trump signed a banking regulation reform bill last May, IBC’s profit growth rate nearly doubled to 30 percent for the last two quarters. Meanwhile Nixon, together with other business leaders, lobbied the Trump administration on NAFTA. After much huffing and puffing over it, the president eventually agreed to a quite modest updating of the treaty, papering over the modesty of the revisions by insisting on changing its name to the clunky U.S.-Mexico-Canada Agreement, or USMCA.

Dennis Nixon, CEO of the International Bank of Commerce.

Bonnie Arbittier / Rivard Report

Dennis Nixon, CEO of IBC Bank

In some ways, Nixon’s gamble on backing Trump is in line with the nation’s business community at large. Unlike the crowds that flock to his rallies and chant “Build the wall” and still, at times, “Lock her up,” this constituency never saw Trump as a believable hero. These are the same people who quietly fought bathroom bills here and around the country, who are appalled at Trump’s flirtations with dictators abroad and white supremacists at home. But they were ready to accept those parts of Trump in exchange for what turned out to be tax cuts (almost) beyond their dreams and massive cuts to federal regulations covering areas much wider than banking.

And now, it appears, they don’t have the ear of the Trump administration. Nixon recently published a commentary in the Rivard Report headlined: “For Common-Sense Border Security, Look to the River.”

He described himself as someone who “has lived and worked for decades only a stone’s throw from the Rio Grande, and who is a member of organizations such as the U.S.-Mexico CEO Dialogue and the U.S.-Mexico Economic Council.” And he complained that “too many people in Washington would rather make decisions based on ideology and politics rather than listen to the folks who are the most knowledgeable and the most affected by these issues at the local level.”

He’s certainly right about the politics, but not about the ideology. Not “many people” in Washington are ideologically committed to the wall. It is widely agreed that one size does not fit the entire 2,000 miles, certainly not the “big, beautiful” 30-foot-high wall of campaign rallies. Even Trump has repeatedly admitted as much, going back to 2015.

The details could be worked out. As Nixon suggested in his commentary, a rational process would include designing border protection piece by piece in consultation with both law enforcement and community leaders all the way along its 2,000 miles.

Theoretically, Trump could get that and proclaim to his base that the border has been secured. But he recently showed who has his ear after torpedoing a funding bill he had agreed to, provoking the record government shutdown that is hurting the economy while devastating hundreds of thousand government employees and contractors. It wasn’t the business leaders who had his ear. It was conservative commentator Ann Coulter.

It remains to be seen how much damage the shutdown will do to the economy and to the Republican Party. But other consequences for Nixon and his business colleagues have already begun. Voters are revolting. The Democrats won the House, and Nancy Pelosi is now the second most powerful person in Washington.

What’s more, Trump is in danger of losing the White House to any of an array of Democratic hopefuls who would make Hillary Clinton look like a Republican. Bankers have been delighted to see the Trump administration gut the Consumer Financial Protection Bureau birthed by Democratic Sen. Elizabeth Warren. But Trump has made her, if not others to whom she is a hero, credible candidates for the White House.

It’s possible Trump, and Nixon, will avoid that fate. But I wouldn’t bank on it.

24 thoughts on “South Texas Banker Learns Limits of Support for Trump

      • Are you saying he flirts with Obama? I presume not. Anyway, executive in our system has great authority, so executive actions per se are not dictatorial. Since Marbury v Madison they have been subject to scrutiny by the Supreme Court. If a president, like say Castro or Chavez (whom Obama gave a bear hug in a flirtatious manner) were to use the military and police forces to kill his political enemies, rewrite the constitution, and ignore the judiciary, so that all power rested in his hands that would be dictatorial. Giving you the benefit of the doubt I assume you know that and are being a jerk for jerkiness sake, but perhaps you are unschooled. Can’t say.

  1. Dennis Nixon funded the corrupt, racist, misogynistic, homophobic, incompetent, authoritarian and xenophobic current administration to loosen some banking regulations put in place after the 2008-2009 financial crisis? Let me shed a few crocodile tears if he has any buyer’s remorse now.

  2. Thank you for this article Mr. Casey. I, too, have heard this same logic from people who supported Trump despite his obvious clownish and racist behavior. People who I know and have been surprised to learn that they are willing to overlook this behavior for their own financial needs despite how it may hurt others. Once this is all over, I think it will be worthwhile for all of us, particularly for people like Mr. Nixon, to reflect on their motives and how that is reflective of what they really think of humanity. Because of as right now, if this is the leader of IBC and that was his logic, I would say IBC reflects this win at all cost perspective rather than the humanity of its customers.

  3. The comments here are not only hateful, but uninformed. Nixon was not complaining about “some banking regulations,” as if they required better signage, but regulations that were putting small banks out of business. “while the number of community banks already declined before the [2008] crisis, since the second quarter of 2010–Dodd-Frank’s passage–community banks have lost market share at a rate double what they did between Q2 2006 and Q2 2010: 12 percent vs. 6 percent.”

    The regulations were aimed at getting large banks to change their way of conducting business, but smaller banks were also forced to comply. Large banks did not care so much about the regulations. They could afford the costs of compliance, while small banks would sink under the burden. It is always the same; the large welcome regulation because they will increase market-share as the competition goes out of business.

    The regulations had nothing to do with the “humanity” of customers, whatever that is, but for Nixon the issue of whether IBC could survive, and provide the services his customers had enjoyed for years. How does it help customers if IBC and other small banks go out of business, and only large banks are left. My recent experience with a large monopoly-powered bank, says we are worse off when competition is reduced.

    So you may not like Trump, but it makes no sense to excoriate Nixon because he supported someone who he expected to take action to relieve his bank, and hundreds of others, from business-killing regulations that were ill-advised and served only to entrench large institutions.

    • The question is at what cost, the customers who use small banks have been some of the people most impacted by Trump policies, particularly the tax cuts who by and large went to the more well off. Would there have been more of a middle ground to amend the regulations instead of getting rid of them entirely? If Mr. Nixon chose to support Mr. Trump because of this and overlooked all the other things he said he would do relative to human rights, immigration, women’s health, his cruel name calling and demeaning of people, not to mention possibly being a Russian agent, then I ask again, at what cost?

      • At what cost? I don’t get your point. How did bank regulations affect those who use small banks other than put the banks out of business. Are you saying that is good? How do tax cuts relate to that? You are missing a transition there. As for the cuts, they, plus the elimination of regulations that destroy the wealth of everyone, have created a great economy in which those at all levels have a better shot at a decent life. Unemployment of blacks and Hispanics are at all-time lows, while their employment is at an all-time high. Is that bad? Russian agent? Really?

        • Unemployment among minorities was on a downward trend before Mr. Trump took office and thankfully it has continued. Small community banks still existed in the years that the regulations were in place, perhaps not making the profits that the CEO wanted, but they were there for the communities. Now as demonstrated in the article, profits went up 30%. So in fact, IBC continued to exist with the regulations in place but seemingly not to the satisfaction of the executives. The cost of making a deal with the devil is that the devil wants their due. Relative to Russian agent, many things are happening now to the Office of the Presidency that we did not ever envision, why would that be impossible to think now, particularly when we see how Mr. Trump inexplicably relates to Mr. Putin?

          • Get your facts straight, and try,although it will be nigh impossible, to suck up every hoax.

          • Thanks for the conversation Robert. I do appreciate your viewpoint as it causes me to stretch to solidify mine relative to this issue. I do not know of any small banks that closed when the regulations were in place, but will certainly research to see if some did throughout the country. I do not think any closed in San Antonio because of the regulations but if you know of one, please share so I can amend my thinking.

  4. “It’s possible Trump, and Nixon, will avoid that fate. But I wouldn’t bank on it. ”

    What fate? Becoming a hero or losing the White House? Does it matter? Trump is a one hour wonder, to be pushed aside and ignored in the next election. Nothing lasts

    No one in DC is ideologically committed to anything, including their base. The rhetoric coming from young Democratic hopefuls will change once they’re in. It always does. Time shows this again and again. You can’t bank on anything coming out of DC.

    Government shut downs are not new, but lately they seem to have become a favorite negotiating tool by both sides. How about term limits for Congress? How about pushing for laws that the President and Congress are “locked-in” without pay or breaks, anytime a shut down happens. Better yet, let’s do away with the two party system that consistently gives us crap presidential choices.

    The idea of trying to save small banks is a good one. They tend to be locally owned; the investors live and work within the same communities the banks serve. Dixon knew he was making a bet that could flip on him; but that was his perogative. Good job calling him an idiot without actually saying it. That’s the beauty of editorials.

  5. Adelina, just Google Dodd Frank Job Killer and start with the articles. Consider that regulation, even if does not kill a bank, to stay in business it must find ways to survive. What does that mean? Layoffs, reduced hours, fewer benefits.

    Government is the tool the politically powerful use to put their competition out of business. That’s how beauticians get laws passed that require hair braiders to take $10,000 cosmetology courses that have nothing to do with hair braiding. It’s how labor unions in the North got the first minimum wage laws passed so that less skilled black workers migrating from the South were priced out of the market. Everyone knows this, and especially that minimum wage destroys jobs, but politicians don’t care. They do it to get votes and they never suffer the consequences.

    Banks in San Antonio. I don’t know any but the powerful banks near where I live. Community banks are in smaller communities, as the adjective implies.

    The subject came up in a talk here given by a man from the Fed. This was three years ago. He said the loss of Community banks, and the low rate of new bank formation was a problem they were looking at. Well, Trump did more than look, he acted.

  6. Name is Adelita. Thanks for that information. All businesses find ways to survive, this has happened throughout time. Don’t remember hearing about any layoffs at community banks because of regulations, though have heard about layoffs due to automation. The unemployment rate had been creeping downward in Obama’s last years and has continued. Thus, it seems that tremendous layoffs/job killing since the regulation has not occurred to the level that was discussed that would occur due to the regulation. I did goggle and found there were articles that felt the same way as you and others refuting the claim. Finally since removing the regulation, what is to stop the big banks from doing what they did that lead to the crash? Unfortunately it seems we cannot depend on them policing themselves. Though certainly agree with your take on politicians! Have enjoyed the discussion!

    • I knew it was Adelita, but my iPhone auto-corrected and I did not catch it. Apologies. Automation is another response of businesses to reduce costs in face of regulation. Here in SA, way back when, a woman, famous communist whose name escapes me, organized the pecan shellers to strike for higher wages. Eventually, they got their raise. Then the shellers automated and put the shellers on the street.

      The underlying cause of the melt down of the housing market that led to the collapse will not be found in the actions of the banks. The cause was, yet again, government regulation. FNMA, in concert with regulators, for the sake of social justice, forced lenders, if they wanted to stay in business, to practically eliminate lending standards. I was then living in LA and our housekeeper who made say $30k and whose husband made money at odd jobs was able to buy a $600,000 home with almost no down payment. Her loan, like millions of others, was packaged and sold off to other financial institutions and investors. It was untenable, of course she could not service the debt, pay insurance, and the taxes. So it was all destined to come crashing down. The regulators paid no price, and every one piled onto the banks who were facilitating government policy. GW Bush tried to rein it in, but was called a racist, etc. Maxine Waters led the charge in Congress. Look at her now. Did she suffer? Government is the greatest destroyer of wealth and it does it with impunity.

      • Robert, you seem to imply the United States government does no good for its citizens and all it does is limit the ability of a few to garner the vast majority of wealth within this country. I agree with you regarding the corruption in our government, but I’m thankful for the pieces of our government that work well for its citizens. A government that ensures safety in our foods, drugs, and products. A government that reins in big businesses that use child labor overseas, pollutes our air and water, that charge unrealistic lending fees, and defends our ideals both at home and abroad. Our government is not the best and definitely has room for improvement, but I’d take our government over that of the vast majority of countries in the world.

  7. Adelita,
    In my SA example I used shellers twice, but I’m sure you figured out what I meant. Otherwise, I have left out the the part about we mortals acting out of fear or greed and causing great harm. As it was with the housekeeper I mentioned, it was a period in which house prices were skyrocketing and everyone figured it would last forever. Well, nothing does. She did, btw, go under but for some reason stayed in the house without foreclosure for I don’t know how long. She may still be in it, for all I know.

    There popped into my head an example of humans being their own worst enemies. It has to do with the Scots. In the 1690s a Scottish chartered company started raising money for what is called the Darien scheme. The idea was establish a colony at the Isthmus of Panama that would handle trade with the Indies. Well, everyone in Scotland, thinking Darien was the way to untold riches and down to the lowest economic classes, started pouring money in. Well it went bust, and Scotland was essentially bankrupt. England bailed them out, but at a price. Scotland was compelled to become a part of England. When David Cameron was here a few years ago, when the Scots were trying to dissolve the union, I asked him if they did not remember 1707 and why it happened. “No,” he said.

    Going back to the original premise: Alberta, Canada is in a great fix. Population-wise, it is a small province, but it has immense wealth in oil and gas resources. But they cannot realize on that wealth because the Greens in th provinces to the east and west will not let them build pipelines, or perhaps, as we will see next month, ship by rail. Alberta can legally secede and 25% of the population, with their province economically in the tank, favor secession. Will it happen? Will Alberta become the 51st state? Will the Chinese who want that oil and gas send warships to threaten British Columbia in order to open the market? Who knows. But again, Alberta and the Chinese are unlikely to let wealth destroying governments acting in the name of saving the planet stay in the way forever.

  8. Adelita, an interesting and most informative read is The Joy of Freedom: An Economist’s Odyssey by David R. Henderson. It is not new, but the lessons are timeless. You can get it on Amazon cheap.

  9. These are the type of columns that have pushed me and my group of friends away from Rivard Report. Enough with your hate for Trump. Stick to news.

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