Supporting Trump a Prudent Choice for Community Bankers

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Scott Ball / Rivard Report

A branch of IBC Bank at Callaghan and Babcock roads near the South Texas Medical Center.

Dear Rick:

Politics is about choices. Your commentary makes it seem as though I and other community bankers had an acceptable choice in Hillary Clinton as a presidential candidate, or that I might now be having some second thoughts about supporting Donald Trump. Neither is correct.

You state that because candidate Clinton was strongly supported by Wall Street investment banks, she was somehow not a mortal threat to community banks. However, you proceed from a faulty premise that betrays a misunderstanding of the banking industry and the causes and effects of the 2008 financial crisis.

Community banks weren’t responsible for the financial crisis. In fact, they didn’t play any role in it. That responsibility lies with the Wall Street investment banks and the too-big-to-fail national banks that backed Hillary Clinton. And the financial crisis certainly wasn’t caused by under-regulation of community banks.

Yet the keystone regulatory response to the events of a decade ago – the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 – has had a disastrous impact on community banking, while enabling the major national banks to consolidate and grow. At the height of Dodd-Frank’s effect during the Obama administration, a community bank was shutting its doors every single day.

Researchers at Harvard’s Kennedy School of Business found that in the four years following the passage of Dodd-Frank, community banks’ share of U.S. banking assets shrank by more than 12 percent. Meanwhile, the top five bank-holding companies continued to control nearly the same share of U.S. banking assets as they did before the passage of Dodd-Frank.

The result was that as community banks were forced to close, Dodd-Frank drove further consolidation of the banking industry in favor of large, national banks.

“The rapid rate of consolidation away from community banks that has occurred since Dodd-Frank’s passage,” the authors of the study note, “is striking given that this regulatory overhaul was billed as an effort to end ‘too-big-to-fail.’”

President Hillary Clinton wouldn’t have reversed this disastrous policy for community banks for precisely the reason you mention: “all the money that she had famously taken from Wall Street.”

So, yes, I and my fellow community bankers faced an existential choice. We could allow Hillary Clinton to be elected and go out of business, or we could support Donald Trump and have a place at the table to influence policy – which we have successfully done.

You trivialize the successes of the Trump administration as tax cuts and regulatory reform. Yet the positive results for our country, ranging from 3 percent economic growth to unemployment at its lowest level in a half century, have a profound effect on the lives of millions of Americans.

Are there issues about which I disagree with President Trump? Of course, including the idea that a wall is the appropriate way to secure most of our southern border. But I am pleased to be in a position to be able to positively influence the administration on such policies.

Six months ago, the commentariat was certain that Trump was going to walk away from a free trade agreement in North America, questioning why someone like me had supported his candidacy, and postulating about the limits of that support. We ended up with a very positive, updated trade agreement, due in some part to the fact that people like me had a place at the policy table – something that wouldn’t have happened under a Clinton administration.

Ultimately, I am committed to protecting our free enterprise system, a system that has created an economy that has delivered more prosperity to more people than any in history. That is an issue that involves much more than just the bottom line of IBC Bank.

Regards,

Dennis Nixon

25 thoughts on “Supporting Trump a Prudent Choice for Community Bankers

  1. Dude! Did you really have to use the word “commentariat”? I was expecting “politburo” in the next sentence. You would do a better job if you didn’t toss around labels like this. You know, you could be…like articulate or something. I dunno, because I couldn’t get past your buzzword bingo. Congrats.

  2. People like you Mr. Nixon need to start paying attention. Our president is already surrounded by felons both indicted and convicted.
    Contradicting the findings of FBI, CIA and National Security findings while playing
    buddy buddy with Putin.
    Being a racist.

    Remove the blinders from your eyes Mr. Dixon. You are a fool giving bad advise.

  3. And you David Bradley, cannot write, or spell. And, while I’m at it, if some of the people of whom you speak are indicted, but not convicted, in what manner are they felons? No one who has been indicted or convicted is anywhere near the president, so how can they surround him?

    • No where near the pres. C’mon now. You can defend him if you like but keep it honest. George Papadopoulos-Guilty; Paul Manafort-Guilty; Rick Gates-Guilty; Michael Flynn-Guilty; Michael Cohen-Guilty; Roger Stone-Indicted and practically brags about how guilty he is. Has tattoo of Nixon on his back (not a crime but so weird it could be).

  4. I am not well informed enough to address specific shortcomings of Dodd-Frank,. But the abuses that led to the collapse in 2008 were many. And the failure to hold Wall Street accountable in a meaningful way was sad. If Dodd-Frank went too far or community banks were penalized disproportionately, then those areas of the law should be fixed. My concern now in the Trump era is an over-reaction back to the old ways. I agree with the commentator that likened the Trump initiatives as a “sugar high” that disproportionately benefits the wealthy, is creating huge deficits, and does not address the environmental and infrastructure issues that will ultimately endanger our economy. Through the lens of time, we may come to appreciate the slow but steady improvements to the economy during the Obama era over the short-sighted and unsustainable benefits of the chain saw approach of the Trump era.

  5. Don’t we humans have a way of rationalizing behavior we maybe aren’t so proud of? Why, yes, we do. Mr. Nixon had to support the immoral crook who would be most beneficial to him, is his rationale. Our democracy is under assault as a result, but the community bankers are happy and safe, for now.

  6. I could accept your reasoning for voting against Hillary Clinton, but I’m appalled at your defense of Donald Trump, his policies, his attitudes and the long-term damage to our country he is causing. I find it hard to comprehend how people with a conscience can continue to support him. We have not experienced an economic upturn because of him, but in spite of him. I wish I had an account with IBC so I could vote with my feet and close it.

  7. First off, I would like to thank Mr. Nixon for sharing his thoughts, not only on this issue, but also the proposed border wall. I found his recent article about the potential impact of the wall very insightful and important from a Texas perspective. I have questions about his support of President Trump on financial grounds. I agree with JC’s comments suggesting that understanding the Dodd-Frank impact is often hard to quantify. I know small business lenders, especially in housing sectors, have been negatively impacted, often affecting potential home buyers from lower income families. While I wish more had been done during the Obama Administration to address those woes, it didn’t seem as though that administration had a very cooperative legislature to work with. I did also have concerns with Mrs. Clinton’s ties to Wall Street and her inflexible position on any changes to Dodd-Frank. So rather than look back, I would like to ask Mr. Nixon to peer forward: How do we affect prudent financial decisions in lending without involving the oft-fickle matter of politics? I would assume community banks have their associations and lobbyists? Are they, and the candidates that they support (the banking industry, as a whole, has traditionally favored GOP candidates at nearly every level) not being heard? Surely there is a way to make changes to your industry without championing a candidate who has stiffed it six times through bankruptcy protection?

    • Obama did not have a cooperative legislature? Are you serious, or just blind? He had control of both houses, he passed Obama Care, Dodd Frank and more all stuff we now need to undo.

  8. Not every voter chooses a presidential (or any other) candidate on the primary bases of (a) personal decency, morality, and altruism, (b) devotion to democracy and the spirit of the U.S. Constitution, and (3) preparation, competence, and fitness to manage the office to be filled. Nor does every voter recognize the significance of “proportion” when evaluating the merits and demerits of each candidate. No office seeker is likely to be ideal; yet some can be far less ideal than others.

    Voters seem to behave either as patriots or tribalists. Patriots vote (presumably) with the criteria suggested above in mind. Tribalists however rationalize, politicize, and vote according to their social, cultural or economic prejudices. (Rationalization is NOT justification.) Tribalists subsume the best interests of the general public for that of their own.

    It is clear to which camp Mr. Nixon belongs. He could have chosen the more convoluted but democratic route of organizing community bank leaders and working with legislators — and a more fit president — to alleviate unfair regulation to their institutions. As many have said before, democracy is messy — as is often the case when doing the right thing for the right reasons.

  9. The balance swings in favor of you and your fellow community bankers but swings against who? For you to gain is at someone else’s loss. Like your tax cuts, Who pays the price? I get it Dennis, you’re all about you and that’s the way it should be. But your commentary is also telling what you are about. There are many people I look to for answers as I understand some look to me for answers. I look away from people like Trump.

    • The comments here are fascinating. A man makes a decision for the greater good, not just his bank but the communities it serves and that’s bad. And, with zero facts, roll out a litany of supposed harm, while ignoring explosive job growth, economic rebound 3x that of Obama, shrinking government employment as the private sector booms and increases in wages at the lowest levels outstrip those of the service sector. Trump’s tax cuts and elimination of wasteful and needless regulations at last gave confidence to businesses and individuals alike. Under Hillary who was morally bankrupt none of that would have happened the heavy boot of government would be pressing on all our necks. Facts not dog whistles.

    • Guillermo. It’s not a zero sum game. When the pie grows, all benefit. Yours is a typical progressive mind though process, void of reality show me the harm.

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