Dodd-Frank Finger Pointing: Street Whispers
NEW YORK ( TheStreet)--Community banks are disappearing, and portfolio manager Gary Townsend lays some of the blame at the feet of their chief lobbying organization, the Independent Community Bankers of America (ICBA).
"The ICBA supported Dodd-Frank," says Townsend, who manages an investment fund at Hill Townsend Capital that focuses on financial services companies. "They thought it was going to punish large banks and they got screwed," he says of the 2010 legislation.
Townsend singles out ICBA CEO Camden Fine for particular censure, saying Fine "sold out his membership," in supporting the law. "I don't know how he keeps his job. Community banks were poorly served."
For his part, the ICBA's Fine insists Townsend is mischaracterizing his position."The ICBA never publicly, privately in e-mail or in letters or in instructions or in any other way shape or form ever supported the passage of Dodd Frank," he said in an interview. While it may never have endorsed the whole bill, the ICBA was clearly more supportive than the largest banks. In a blog entry on April 22, 2010, prior to the passage of Dodd-Frank, Fine described himself as " growing dizzy from all the spinning Wall Street is doing as it desperately tries to trick the American public into killing a reg reform bill that would finally rein in the Wall Street mega firms." A lobbyist for one of the six largest U.S. banks who spoke on condition of anonymity says the ICBA was largely supportive of Dodd-Frank, though he acknowledges the group fought against the Durbin Amendment, which caps fees banks can charge merchants for debit card transactions. He believes if the ICBA had opposed Dodd Frank, the legislation wouldn't have passed at all. While both Fine and the lobbyist agree that both Durbin and the Consumer Financial Protection Bureau are potentially harmful for community banks, they differ over the effect other provisions of the legislation will have. The big bank lobbyist, for example, argues the Volcker Rule, aimed at preventing big trading bets by the largest banks, will also harm the ICBA's members because they will have to spend time and money proving the rule shouldn't apply to them. Fine says the rule is overly complex as currently proposed, but if it is written properly, it won't harm his members.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts