The Oklahoma Bank[st]ers Association is spending their money on a series of television commercials designed to scare people into believing that additional financial regulation means that the government will come into your home and tell you how to spend your money. Here's the punchline:
If you're concerned about having the government involved in your decisions, you're going to love having them balance your checkbook!
Video and transcript after the jump.
Video:
Transcript (my own) of the words from Roger Beverage, President/CEO of OBA:
Protecting Oklahomans from bad lenders makes sense. The fact is, traditional banks in Oklahoma have been doing it for more than 30 years, offering great products and services under strong regulatory supervision.
But Washington wants to inject even more government between Oklahomans and their financial institutions. The result will be fewer services and higher costs for you.
If you're concerned about having the government involved in your decisions, you're going to love having them balance your checkbook!
The last part, of course, is delivered with a sarcastic "what are they thinking" tone.
You may have noticed that Mr. Beverage is a bit thin on key points, such as:
- Why is a "strong regulatory framework" good for Oklahomans but not for the United States?
- Oklahoma's been a state for 102 years. What happened 30 years ago that made "traditional" banks start protecting consumers from bad lenders? (The OBA is against big credit unions with the public explanation that "they don't have to pay taxes and banks do.")
- What kind of regulation in Washington would "inject even more government" between you and your banker, much less getting "the government involved in your decisions?"
Weakness in numbers is a bad thing for a bank, you'd think, but OBA seems happy to demonstrate their own. For example, on the part of the site mostly hidden from people who follow the links in the TV ad, we see this proclamation of how strong Oklahoma's banks are:
A capital-adequacy analysis of more than 250 Oklahoma banks was conducted by Keith Hazelton, OBA's Director of Economic Research, at year-end 2008 using FDIC data as of September 30, 2008, the most recent available.
The analysis was based on the so-called “Texas Ratio”, which measures bank capital and loan loss reserves in relation to non-performing assets and is calculated by dividing the value of a bank's non-performing assets (non-performing loans and other real estate owned) by the sum of its tangible common equity capital and loan loss reserves.
A reading below 100 means a bank's capital and loan loss reserves exceeds its non-performing assets, and can be construed as a reliable indicator of the institutions financial health. OBA's study indicates virtually every Oklahoma bank remains well-under the “troubled-bank” score threshold of 100.
Among Oklahoma's banks, the asset-weighted average score as of 3Q2008 stands at 14.1, with only a handful of institutions exceeding a score of 33.
How many of the 250 constitutes "virtually every?" They don't say. And that ratio of 14.1 and 33 and all that? Never explained. "Here's two numbers, and ours is good and the other one is bad. See? We're kings of the world!"
It is interesting, though. The September 2008 OBA statistics do mention 250 reporting commercial banks, the same number that OBA studied on its own to prove how healthy it is. And yet the June 2009 statistics drop that number to just 174 banks. Full-time employees listed in the statistics have dropped from 18,740 to 9,676. In just nine months. Atrios' famous FDIC Failed Bank List has only one Oklahoma bank on it since October 2000, and that one closed on July 31—well after the June 2009 statistics were compiled. I wasn't aware of any huge mergers in Oklahoma banking, so…are the bankers just deserting the Oklahoma Bank[st]ers Association? Or is it some statistical anomaly? The December 2008 statistics also list only 174 banks, just two months after the previous statistics, so maybe 76 banks only report annually? Without context, which OBA seems to love to leave out, it sure looks odd.
If you poke around for a while, you can find this news from last year where they're horrified at the idea of bankruptcy cramdown provisions, and at any additional regulation that doesn't include "any representative from the state banking supervisory ranks." Why would they be so concerned about that?
I can believe it might be political to some extent, if OBA is spending members' dues on vague political commercials that both praise and condemn "strong regulation," and if they're spending their member-generated profits trying to make sure that you, not they, are responsible for any bad loans they issued. (After all, bankruptcy cramdown only allows the judge to rewrite mortgages for the current value of a house rather than the inflated bubble price you can't afford any more, right? And if Oklahoma's laws against "bad lenders" prohibit that, then there shouldn't be many cramdown mortgages, should there? Or am I missing something?)
Nonetheless, I think that people in Oklahoma (like everywhere else) are pretty sick of banksters nickling-and-diming them to death to post huge profits when everyone is having a tough time of it. From jacking up interest rates on credit cards to outrageous fees, I think lots of people are paying more and more to banks and getting less and less in return. And then a well-fed old guy appears on the TV with some of that money and harrumph about how horrible it would be for the government to keep them from ripping off people, using vague and completely unsubstantiated fear language about a government takeover of your checkbooks?
Even in red-state Oklahoma, I don't think that's going to work out as well as they think it will.