Dear Banker:

You and I may have had disagreements in the past, but I believe you to be a responsible businessperson and citizen who wants what is best for your community and family. I do not question your integrity, values, or intentions.

I believe you have serious doubts about a second term for Donald Trump and questions about how Joe Biden’s election would affect your bank. Here’s why I believe that it makes business sense for you to vote for Joe Biden this November.

Why Donald Trump is Bad for Banks

Bottom Line: President Trump’s oversight of financial regulation has created a deregulatory trend that threatens the integrity of the financial services marketplace upon which you and your customers rely. Here are some examples:

• President Trump devalues the importance of the regulatory agencies upon whom you rely. Witness his threat to take action against his hand-picked chair of the Federal Reserve Bank, Jerome Powell, when he disagreed with Powell on policy (read more here). Additionally, he nominated Judy Shelton to serve on the Fed’s board . Shelton is an advocate for a new international monetary system tied to the gold standard (read her paper here).
  • You and I both understand that Donald Trump probably knows a lot about gold and almost nothing about the gold standard. You work in finance; you understand the consequences – both intended and unintended – of movement towards such policy. For a refresher, you can read a short article (here) from the St. Louis Fed.
• Under President Trump, the Consumer Financial Protection Bureau has changed its rule regarding payday lending (see reporting here). I understand that you’re no friend of the CFPB, but this rule change is unleashing payday lenders on the very people who most need your banking services.
  • If you are still reading, you have underwriting flowing through your veins. Payday lending’s lack of underwriting goes against your every instinct as a banker. You are offended by its business model. You want those borrowers as your customers and are working with consumer advocates and government agencies to get them through your doors.
• Under President Trump, the outgoing Comptroller of the Currency changed its rule regarding the Community Reinvestment Act (read OCC press release here). You want CRA reform, but did you know that the comptroller resigned immediately after the rule was passed (here)? And you know that the FDIC did not join in the rule change (here)? And that the Federal Reserve opposed the framework of the rule change (here)? And that your very own representatives, the American Bankers Association, were less than thrilled with the whole process (here)?
  • As a banker, is there anything you despise more than regulatory uncertainty? (Other than a return to the gold standard and payday lenders.) So how excited are you to have the federal regulators in disagreement over CRA? And how excited are you that the Comptroller of the Currency, who pushed hard for the rule change, resigned rather than stick around to work with the Fed and FDIC on consensus? How are you actually dealing with the CRA uncertainty?!? This regulatory cluster$#%@ will not be a one-off in Trump’s second term.
• If your company displeases him, President Trump will criticize you on Twitter. If your competitor pleases him, he will tweet his support (read more here).
  • Seriously, do you want the President of the United States picking favorites?

What is crystal clear is that President Trump wants banking to be deregulated, though he does not understand what that means. But is helter-skelter deregulation going to be healthy for your business model? Are you really interested in giving up your competitive advantage over non-bank lenders – the full faith and credit of Uncle Sam? I suppose you can always seek refuge in one area in which Donald Trump has some expertise, bankruptcy law (read more here).

Why Joe Biden Makes Sense for Bankers

I am urging you to abandon the uncertain business landscape in a second term of Donald Trump for the pastures of certainty offered by Joe Biden. Here’s why:

• After finally electing a businessman instead of a politician to drain the swamp, we must come to the conclusion that the job of President of the United States actually requires a politician who can negotiate with Republicans and Democrats, Congress, the states (and the District of Columbia, territories, and possessions), and politicians from other countries. POTUS cannot behave like a corporate CEO and expect results.
• Whether or not you agree with Joe Biden on any or all issues, you must agree that he has been a successful politician. He has won elections and been re-elected a lot over the decades. No missteps large enough during his long service as U.S. Senator representing the business haven of Delaware or Vice-President for recall or defeat. He knows how to deal effectively with people in agreement with him – and people who disagree with him. Joe Biden has a refined skill set necessary for the job.
• While Joe Biden’s views and positions on some issues have evolved over the years – admit is, as have yours through years and experience – you know Joe Biden. He’s been in the glare of the media for decades. There are no surprises with Joe Biden. He is not the radical straw man described by some political operatives and opponents.
• The election of Joe Biden means a return to competence in government. This means banking regulators who understand banking, respect the rules, and will work hard to ensure the integrity of the marketplace. He will not tweet out support of a banking competitor – or urge banking customers to flee the banking system for schemes like bitcoin or your non-bank, uninsured competitors.
• You may disagree with some of Biden’s banking policies or regulatory appointments, but you will regain regulatory certainty. You, your lawyers, and your lobbyists will be able to work with regulators in a Biden Administration in an environment that you can negotiate under rules that are transparent.
• In a Biden Administration, you can expect that:
  • Rules, policies, and guidance will be clear, based upon a rational economic and financial basis.
  • Financial regulators will represent mainstream ideas and policies.
  • Federal regulators will seek consensus to provide clarity to banks.

Lastly, do not confuse whatever the Trump Administration is doing or not doing with your bank’s stock price or your return on equity. The markets do well under both Democratic and Republican leadership (read more here), but you already knew that.

Dear banker: I believe that banks need common-sense regulation so that your customers can be assured about doing business in the banking system. I also believe that well-managed consumer debt provides necessary fuel for our nation’s economic engine. You and I are may disagree on several issues, but we will probably agree on what’s important.

When you wake up in the middle of the night, you must admit that you have no idea what four more years of Donald Trump will bring to your bank. With Joe Biden overseeing the federal government, at least you know how your bank can navigate into the future.

Please vote for Joe Biden. Thanks for your consideration.

*****

The author served as Director of Communications for the Pennsylvania Department of Banking and Securities from 2008-2018. His opinions do not necessarily reflect the policies and views of the department or those of the administration of Pennsylvania Governor Tom Wolf.