WASHINGTON — Frustrated by recent losses on Capitol Hill, American Bankers Association President Rob Nichols said Wednesday that the industry needs to drastically rethink its lobbying strategy.
"As an industry…we need to reassess every aspect of our political engagement and how we do business in Washington," he said in a speech to the Exchequer Club.
He pointed to two setbacks in late 2015 as Congress failed to pass regulatory reform legislation but did enact a measure in the highway transportation bill that slashed the dividend the Federal Reserve Board could pay banks with more than $10 billion of assets.
"It was so misguided to have banks to be used as a pay-for for the highway bill," Nichols said, adding that it was also "a huge missed opportunity … a profoundly disappointing end of the Congress that we were not able to make some bipartisan, common sense changes to the Dodd-Frank Act. Those two things together is a double whammy."
Nichols said the industry needs to reassess its strategy to prevent more losses this year.
"Our industry needs to be politically more muscular so we can avoid outcomes like that where we are being used as a pay-for for a piece of public policy that has nothing to do with the banking sector," he said.
As a starting point, he suggested that the financial services industry needs to end "bank on bank violence" and start showing a unified front. "We will have more influence and clout when we work together," he said.
Nichols acknowledged that banks still face a reputational challenge — and it's not improving.
"I thought every year we were one year farther from the crisis, the public policy community would look a little different on the banking sector a little differently," Nichols said.
But almost the opposite has been true as bank bashing has become a populist view and a talking point for many of the 2016 presidential candidates.
"We are seeing a lot of it in this election cycle, which I think is very unfortunate and you know we are in the early part of the primary season so that might even ratchet up and get louder," Nichols said.
However, Nichols said the upside is that with a new president will come an opportunity to hit the "reset" button.
"The good news is in 2017, there will be a new administration, one not tethered to the policy responses and a new Congress as well and that affords us a new opportunity," Nichols said. "We are going to have a lot of new faces in Washington and that will be opportunity for our sector to help turn the page."
Nichols said the industry is still hoping for relief this year, but conceded it would be an uphill fight.
"At any time of heightened political rhetoric it makes it more challenging to achieve public policy goals. But that doesn't mean we stop trying," he said.