WASHINGTON – Former Florida Gov. Jeb Bush's polling numbers are running in the mid single digits in Iowa, making the prospects for his campaign bleak, yet he retains much of his support among bankers in the state.
In interviews with those in the Hawkeye state, which caucuses on Feb. 1 to make a choice for president, several said they were leaning toward Bush even while polls show their friends and neighbors are supporting Donald Trump or Sen. Ted Cruz, R-Tex.
“Jeb is a self-proclaimed policy wonk … a lot of people are critical of that, but I am on the other side,” said Jeff Plagge, president and chief executive of the $1.6 billion-asset Northwest Financial Corp. “I think it shows somebody that is going to take it seriously who is not going to promise the world and then fail at everything. Another one that I like that leans a little bit more that way is [Ohio Gov. John] Kasich.”
Plagge is hardly alone. While community and big banks frequently diverge on policy matters, institutions in this election have overwhelmingly favored Bush with their campaign donations. That could reflect familiarity with Bush given his governorship and his brother's administration.
Plagge said he prefers governors over "Washington politicians" who, he said, sometimes skimp on their responsibilities. "Governors don't have that ability to sneak out of that equation."
Michael Olson, vice president of the $830 million-asset Lincoln Savings Bank in Grinell, Iowa, pointed to comments Bush made in a Nov. 10 debate in which he called for higher capital requirements for large banks.
"If we were serious about it, we would raise the capital requirements higher and lessen the load on the community banks and other financial institutions," Bush said.
Olson, who is on Bush's leadership team in Iowa, said he "could almost hear a collective cheer from not only bankers across Iowa, but also the country."
Bush currently lags behind in the polls, however. The most recent Iowa poll by CNN/ORC released Tuesday has Bush with just 5% of support, versus 41% for Trump and 19% for Cruz. Olson, however, says he thinks Bush will do better than expected.
"My personal opinion is I think you are going to see Jeb Bush beating expectations here when it comes time to vote," Olson said. "There are a couple of candidates that are perceived to have set themselves up to do well in the caucuses, and what I would say is there are also some candidates with ground games … that are very well organized that you don't hear about in the top two or three."
Yet some state bankers are also looking to another Florida lawmaker: Sen. Marco Rubio. Rubio is barely ahead of Bush, with just 8% of support in the CNN poll, but he is widely seen as the best chance to unseat Trump and Cruz in the national Republican race.
Scott Schneidermann, president and CEO of the $190 million-asset Frontier Bank in Rock Rapids, Iowa, said he is backing Rubio. "I like his youth and energy and his vision for the future. He has a positive message for the most part," Schneidermann said.
Like Bush, Rubio has called for reducing regulations, saying in a Jan. 14 debate that the regulatory environment is "out of control." During an earlier debate, he said that "small banks … can't deal with all these regulations."
Schneidermann said he was able to share a story with the Florida Republican about the information technology portion of a recent exam that his bank had gone through. Examiners asked the bank to carefully review every vendor that works for the bank.
"In the summertime, we have a high-school kid that mows a vacant lot the bank owns and we said, 'You wouldn't want us to do a vendor review on him?' And [the examiners] said 'Yes, we would like you to do a vendor review on the high-school kid that is mowing the grass,' " Schneidermann said. "I saw Marco Rubio and I shared that with him, and he thought I was kidding."
To be sure, the Iowa caucuses on Monday will also choose a winner for the Democrats – but the bankers interviewed by American Banker were gravitating toward the GOP choices.
"Most bankers will lean towards the Republican side because of regulation and wanting less of it," said Eric Newton, president and CEO of the $100 million-asset 1st State Bank in Britt, Iowa.
And with more than a dozen contenders still in the race at this stage, some bankers are likely keeping their options open.
"On the Republican side of things, we have almost a smorgasbord to choose from, so that has been pretty interesting this year," he said.
And while each candidate's financial policy is important for every banker to consider, it is not the only consideration.
"Myself, I personally have supported Ben Carson, maybe not so much for banking reasons" but "just for overall economic reasons and so forth," Newton said.
Bankers also fear the anti-Wall Street rhetoric – popular among Democrats like Bernie Sanders but also some in the GOP race – is hurting all institutions.
"From a community bank standpoint, it hurts us because we tend to get put in with the Wall Street banks and we are just so different," Newton said.
While he runs a small bank in Iowa, people "just hear 'bank' and they assume that Citigroup or 1st State Bank of Iowa all do the same thing."
Sharon Presnall, senior vice president of government relations and compliance with the Iowa Bankers Association, said she wishes more candidates would discuss community banking issues. But beyond a few comments here and there, Republican candidates have said little about banking.
"On the banking side of it, all I hear is what they talked about with regard to large banks, investment banks, Wall Street banks," Presnall said. "In Iowa we are almost exclusively a community bank state so I think it is disappointing."
Olson said regulators, too, sometimes fail to grasp the difference.
"There have been a number of rules, legislation passed, regulations written that really take a one-size-fits-all approach, and it really doesn't work," he said. "We are not Wall Street – my bank is literally on Main Street – we are not Wall Street, we are Main Street."
Though Olson said the big banks certainly played a part in the causing the financial crisis, he said there is plenty of blame to go around, and he questioned whether breaking up the big banks, as Sanders has suggested, would make sense.
"Would it be better for us to have no large banks and other countries that we are competing with to have much larger banks?" Olson said. "I would just as soon see global assets sitting in an American bank rather than sitting in a bank in China or Switzerland."
Plagge agreed. "I also don't buy his whole discussion about breaking up the big banks. … We have a world economy these days … and to say that we are not going to have any [money-center banks] and be a national player in the finance world I think is wrong-thinking."
Schneidermann of Frontier Bank said, "I don't think Wall Street is inherently bad, but I really do believe some of these firms have gotten too big to manage."
He added that while regulators sometimes are intimidated by the megabanks, they "have enormous powers over a bank like ours."