Daniel Blanton, the chief executive of Georgia Bank & Trust in Augusta, describes himself as a "homegrown" banker who got his start as a teller.
In the past week, though, he has stepped onto the national stage as the newly elected chairman of the American Bankers Association.
Blanton was elected as chairman at the ABA's annual convention last week. He succeeded John Ikard, the CEO at FirstBank Holding in Lakewood, Colo.
Getting a regulatory relief measure through Congress is at the top of Blanton's agenda. Though his bank has just $1.8 billion of assets, Blanton strongly favors raising the asset threshold — now at $50 billion — for determining if a financial institution is or is not systemically important. Sen. Richard Shelby, R-Ala., the chairman of the Banking Committee, is reportedly working behind the scenes to include major portions of regulatory relief legislation he proposed earlier this year into a broader budget bill.
It remains to be seen "just how much of [Chairman Shelby's] bill can get attached" to a yearend budget deal, Blanton said. Lawmakers are working to pass an appropriations package by Dec. 11 to avoid a government shutdown.
Blanton has served as CEO of Georgia Bank & Trust since 1997. He got his start in banking four decades ago, as a teller at Georgia State Bank in Martinez.
He also married into a banking family. His father-in-law, Robert Pollard Sr., founded Georgia Bank & Trust in 1989, and his brother-in-law, Robert Pollard Jr., is the bank's current chairman.
Blanton is assuming the ABA chairmanship at a time of significant change in the way financial services are delivered. The ABA is calling for more regulatory scrutiny of fintech firms that are increasingly encroaching on banks' turf, but Blanton says banks also need to be thinking about ways to team up with these new players in payments and lending — or figuring out how to beat them at their own game.
In a wide-ranging in interview with American Banker, Blanton also addressed the challenges banks and law enforcement face in thwarting money laundering and called for an end to what he called "bank-on-bank" fighting. Here is an edited transcript of the discussion.
What's your top priority for the coming year?
Dan Blanton: I think the biggest priority we've got right now is getting some sort of [regulatory relief] legislation passed. That's our immediate goal…It's come down to the fact that the only way it's going to happen now is the appropriations bill.
Changing the SIFI threshold has been a focus of the regulatory relief debate. What should the threshold be? How should it be defined?
I don't like thresholds. I think that really needs to be more of a tailored regulation based on a business model. But I think $50 billion is way too small, just like the $10 billion threshold is way too small [for subjecting banks to interchange caps and other new regulations]. Both of them do need to be moved up.
How do you think it will shake out?
The Shelby bill currently takes it to $500 billion, that's probably high. My sense is it would be to meet somewhere in the middle, probably $250 billion.
Let's talk about technology. Google, Apple and other big tech companies recently formed a fintech lobbying group. How will that affect the work of the ABA?
I think it's both an opportunity and a threat. There's an opportunity to partner with them in terms of payments, and the way they do things. It's also a threat of our business model being in danger in terms of them taking business from us.
You know, I love technology … My new iPhone has Apple Pay on it. My daughter showed me how to load everything in, and I've used it one time to pay for a Firehouse sub. I thought it was as cool as could be. I immediately saw it on my American Express bill.
So you enjoyed it?
Yeah, I like all of this new technology. I think there's a wonderful place for it in banking. Bankers have a bit of a challenge of moving at that pace because of all of the compliance and regulatory issues that surround us, that companies such as Apple don't have to deal with.
How can the banking industry avoid being disrupted by new technology?
Well I mean I don't think anyone can avoid being disrupted by it. I think the new technology shakes up everybody. I think you just have to embrace it, and move on forward with it, and get an understanding of it.
How big of a competitive threat is marketplace lending?
It's a growing market. I think banks do have to figure out ways to get into it. It's a big subject in my bank. … We have just launched our first online loan application process; up until now we've been very reluctant to do that, where someone can actually apply totally online just scared us to death.
I think there are some good opportunities there. Banks have got to get out of this mode of being scared to death of it, and so risk-averse.
I want to ask a question about interest rates. What should bankers be thinking about as they prepare for rates to rise?
The current thinking is there's a 70% chance that the [Federal Reserve] will raise rates a quarter of a point before the year ends. Next year, it's an election year, and you might not get a raise until the end of that. So you might not get a raise until the end of next year. That's just not much. That's a very slow, slow curve.
We do think we're going to see rates begin to move. But as far as positioning ourselves, we've been positioned for years, waiting on it.
Let's talk about anti-money laundering. Do you think the attacks in Paris will result in stricter AML regulations on the industry?
I don't know how it could be much more restrictive. Right now we're the police force for every agency out there. I know when I go to my meetings we look at our suspicious activity. Maybe outside of the banking industry, in some of these other shadow industries that deal in money, [is where law-enforcement agencies should be directing more attention]. It might be easier to move money around in those areas.
I thought it was interesting in the news that the PlayStation 4 — that's how they identified how these people have been communicating back and forth. It's totally off the grid, and can't be tracked…These days, where we're intercepting cell phones, and text messages and everything else, and the way that they've been communicating is through a PlayStation.
I'm going to shift gears once more. How do you, as a community banker, balance those concerns of large and small banks at the ABA?
I'm the largest community bank in my market. But I have International Paper here in my market. There's no way in this world my bank can offer them anything. They're a large U.S.-based company, and there's not one thing my bank can offer them. I'm a fiercely competitive community bank. But I certainly acknowledge the regional and big banks in the country for the job they do for customers I can't possibly help.
Still, tensions persist. Jamie Dimon, CEO of JPMorgan Chase, said earlier this year that small banks are risky. What was your response to that?
I think we need to stop this bank-on-bank fighting. We're one industry, and we need to act as one industry. I just don't see any reason to have bank-on-bank violence.