“Banking is key to economic recovery,” said “Gene Henson at last night’s Midtown Republican Club meeting.
Henson, the regional president of Trustmark Bank, spoke in November to the Lunch Hour Republican Club. He was more optimistic at that time than now about the recovery. “We’re starved to making good loans. The consumer is not borrowing and is not optimistic enough about the future.” Yet the government is hindering them with an overzealous response to the 2008 meltdown.
“Congress did some stuff in desperation,” he says. “I view TARP as not necessarily a bad thing. We took $220 million in TARP because the government asked us to. We paid it back in eight months. It carried a 5% coupon and cost us $20 million. As of now, banks have paid back 90% of the money.”
What happened next was more problematic. “Congress passed Dodd-Frank – 3,500 pages of new rules and regulations. Most of the senators who voted for it did not even read it. But, it will have a detrimental effect on mortgages. The average bank has 37 employees; now of those, 19 are engaged in compliance activities.” This, as he points out, costs banks more to fund these employees and takes them away from customer service.
Tacked on to Dodd Frank was an amendment by Senator Dick Durbin (D-Il). “There wasn’t even any debate on it. It concerned debit cards which used to be charged .54 cents a swipe. Durbin handicapped it at .24 cents at the urging of lobbyists from Walgreens and Lowe’s who didn’t want to have to pay part of that fee. The money had to come from somewhere. It transferred $50 billion from banks to retailers. Our industry is still searching for a way to get that money back.”
Another problem is the Consumer Financial Protection Bureau. “It’s a dangerous agency with unbridled power. They can assess criminal and civil charges without any oversight.” Henson mentioned that Elizabeth Warren, now running against Scott Brown for the Massachusetts Senate seat and a quasi Marxist, was involved in this fiasco.
Henson hopes that the real estate sector will improve. “Memphis was a big subprime market, although our bank was not involved in that. Where were the regulators then?” He fears that politics will overcome regulators in future doings.
In the House, Henson says Marsha Blackburn and Stephen Fincher have been receptive to his industry’s problems. “Fincher replaced Anthony Weiner on the banking committee, so that helps,” he said. “Corker has been on the Senate banking committee and that has been helpful, too.”
Henson doubts the consumer will emerge strong any time soon. High gas prices that keep rising are not going to help. “And there’s no hope for repealing Dodd- Frank,” he says.