Criticism of banking conference called 'untrue' and 'misleading'

To the editor:

Assistant Professor Jeremy Kress, in an op-ed published Friday in the American Banker, makes untrue and misleading statements as he denounces the annual banking and payments conference co-hosted by the Bank Policy Institute and The Clearing House.

First, Assistant Professor Kress asserts, "The revenues that TCH and BPI earn from this year's event are likely to support their day-to-day lobbying and advocacy activities." This statement is false. In fact, our conference is budgeted to break even, and any budget variance is added or deducted from net assets. The conference does nothing to fund the other activities of either organization — whether it be the payments operations of The Clearing House or the research and advocacy of BPI. Furthermore, the conference budget includes only direct, out-of-pocket costs (space, food, marketing); if the cost of BPI and TCH staff time were included in the accounting, the conference would consistently operate at a substantial deficit.   

Assistant Professor Kress asserts, "The sponsors generate significant revenue from their annual shindig. For example, BPI earned $1.4 million from hosting conferences in 2019 (the most recent year for which disclosures are available)." Somewhat remarkably for one who purports to be an expert on banking, Kress reports only the revenue side of BPI's IRS Form 990 and not the expense side, which discloses that total expense for all of our conferences, meetings and events that year was $3.47 million. Thus, BPI ran a deficit of roughly $2 million on all its conferences, meetings and events in 2019.  With respect to the 2019 TCH-co-hosted conference in particular, that event came in slightly ahead of budget, netting BPI a surplus of roughly $75,000. And, again, if one includes the cost of BPI's staff time, the conference ran at a clear deficit.

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September 2

Jeremy Kress

University of Michigan

Second, Assistant Professor Kress describes the event as an "exclusive" and "cozy" affair. In fact, the event is open registration and includes discounts for students, academics (including Assistant Professor Kress) and those employed by the government; the event is open to and widely attended and reported on by the press; and a transcript of all the major panels is published after the conference and all plenary sessions, including all keynote remarks, are posted publicly. By tradition, the first panel is composed of leading analysts from outside the banking industry who can provide an informed and objective view of how we are faring. 

One might wonder why we would put on a money losing conference. The answer is that we believe valuable debate about regulatory and payments policy comes from bringing together leading bankers, analysts, attorneys, consultants, academics and regulators. It has no parallel in this country. (Its parallel in Europe, Eurofi, is industry-funded and includes even greater attendance by policymakers.) In contrast, most academic conferences shun the inclusion of practitioners.

Lastly, we note that there are numerous nonprofits in Washington that in fact do rely for income on conferences that feature executive and legislative branch officials whom they routinely lobby for support. Of course, those events don't include the speech Assistant Professor Kress is trying to chill. 

Jim Aramanda, President and CEO, The Clearing House 

Greg Baer, President and CEO, Bank Policy Institute

Editor's note: Kress' BankThink piece has been updated with a mention of event expenses disclosed by BPI in 2019.