Scott Anderson has a message for his fellow bankers: Get involved in advocacy at all levels of government, even if the issues are complex and it means taking on more work.
“I know this is a lot to ask of busy bankers, and advocacy can sometimes be uncomfortable,” Anderson said during an Oct. 19 speech at the American Bankers Association’s annual convention. “But we are either out there on the political expressway moving fast, or we are going to get run over.”
Anderson, president and CEO of Zions Bank in Salt Lake City since 1998, has been walking the walk for years, but his gait is about to quicken. During the ABA’s conference in Tampa, Florida, he was elected chair of the Washington-based trade group.
His term comes at a time when banks have been largely unscathed by the pandemic, with strong capital levels, solid credit metrics and some emerging signs of loan growth. But there are challenges, including the low interest rate environment that’s put pressure on revenues, increased competition from fintech and big tech companies and the renewed threat of increased regulation.
Anderson spoke to American Banker this week about his priorities as ABA chair, some of the industry’s most pressing issues and how the pandemic might change the work environment at Zions for good.
The following has been edited for clarity and length.
Let’s start with a huge pain point in the industry right now — the Biden administration’s proposed plan to require banks to report customer account flows to the Internal Revenue Service. Why has it been so troublesome for bankers?
SCOTT ANDERSON: First of all, I would say this is not only a bankers’ issue. It’s an issue for all people living in America that have checking accounts or savings accounts. I believe that banks should not be the reporting arm of the IRS and, having said that, I also firmly believe that everyone should honor their tax obligation.
But if they are not, the IRS is the organization that should be monitoring that and dealing with those that are cheating on their taxes. It shouldn’t be a bank.
The proposal
The administration is saying, "What if we change the [threshold to report] from $600 to $10,000? What if we required this for people who make $400,000 or more?" I think in my mind it’s just a bad idea at whatever level they come up with.
The Consumer Financial Protection Bureau has a new director in Rohit Chopra. What do you hope to see in terms of oversight for banks, fintechs/big tech and other groups?
I think when it was set up, the original idea was not just to look at banks, but to also be there to protect consumers and small businesses. And there are a lot of groups that provide credit and financial services to consumers and small businesses — banks, credit unions, fintech companies, auto dealers, furniture companies, credit card companies.
So far, the focus has been on banks, and I think banks are well regulated, where some of these other groups are not regulated. I think that’s what the CFPB needs to focus on. [Chopra] has said they are
One of your main priorities as ABA chair is to help create an inclusive economy that gives everyone the chance to prosper and includes banking the unbanked. What is one strategy that all banks should undertake right now to reach the unbanked?
I think it’s becoming increasingly critical that everyone has a bank account that they can use and make available for electronic payments. I think the Bank On movement, which the ABA is really pushing, fills the consumer services gap for unbanked and underbanked consumers and meets the needs of those living paycheck to paycheck.
I’m proud that our bank has gone through the process, and that our OnBudget Banking product has been certified. I think you’ll see this movement grow and more accounts will come on stream.
You’re also focused on the tax exemption for credit unions, which has long been a sore spot for bankers. What will be different this time?
I think what’s different this time is that if Congress, especially Democrats, and if the president want to have a fair tax system, and they’re really looking at increasing revenues to pay for some of these programs in the [proposed budget plan], then [taxing credit unions] would be money that would be fairly easy to take. We all need to carry our weight and I think the tax exemption is a dinosaur that needs to go away.
There’s been talk about incorporating climate risk into bank supervision. Do you support that idea?
I certainly am a big proponent of environmental, social and governance issues that any institution should be concerned with. One of the concerns I have is, could a regulator appointed by a political party with a specific bias come out and say, "We don’t want you to lend to the coal industry or the gas industry or an Amazon.com building because of the amount of water it requires"? Those things could have a detrimental impact on access to capital across the board.
Banks are required to underwrite appropriately and look at all risks, including environment risk. The Fed is saying they will come out with some guidelines, and I think it depends on what those guidelines are and what they mean.
I read a
We’re not fully back in the office yet. About 70% of our non-branch employees are working from home at least part of the time. I think there will be some jobs that will be remote, but the bulk of jobs will be more flexible than what we’ve seen in the past.
There are a couple of issues we have to be careful about. If someone is working in the office and someone else is working remotely and a promotion [opportunity] comes up, we as managers have a tendency to look at those [employees] that we see every day. So from an equity point of view, we have to make sure we look at everyone equally, based on performance. I also think we will have to figure out how to manage people better remotely.
