Mid-sized banks that mostly let Wall Street and small firms speak for the industry during the debate over the Dodd-Frank Act have decided it’s time to carve out their own agenda in Washington.
Companies including U.S. Bancorp, SunTrust Banks Inc., PNC Financial Services Group Inc. and Regions Financial Corp. are opening their own lobbying shops and staffing them with seasoned Washington hands. Regulators and lawmakers have begun to pay attention as the banks argue for changes in how they’re affected by Dodd-Frank rules including the so-called Volcker ban on proprietary trading and procedures for unwinding failed banks.
Ruebel said in an interview that the bank is looking to 2013, when a new Congress might revisit parts of Dodd-Frank. “If there are any decisions that different pieces of Dodd-Frank need a look, we want to be there,” he said.
Despite the new lobbying firepower, the regional banks have limited room for change when it comes to Dodd-Frank rules. The law specifies that institutions with more than $50 billion in assets are subject to the most stringent requirements, a threshold exceeded by most of the firms.
Very large banks lag their regional counterparts in return on equity, a measure of profitability, according to data compiled by Bloomberg. For example, Goldman Sachs returned 5.2 percent in the second quarter of 2012, while Bank of America had 4.7 percent. Buffalo, New York-based M&T Bank Corp. returned 8.2 percent in that period while Fifth Third hit 11.5 percent.
The position drew support from six members of the Senate Banking Committee, including Senators Mark Warner, a Democrat of Virginia, and Mike Crapo, a Republican of Idaho, who wrote to regulators on Feb. 16 that compliance costs “could cause some banks to exit certain types of activities that provide liquidity to their customers and are permitted by the Volcker Rule.”
The regional banks aren’t part of the Independent Community Bankers of America, which on its website claims nearly 5,000 members with assets between $3 million and $17 billion.