FirstCapital Bank of Texas Chairman Kenneth Burgess, Jr., left, President Donald Trump, and Cape Cod Five Cents Savings Bank CEO Dorothy Savarese, listen during a meeting with leaders from small community banks in the Roosevelt Room at the White House in Washington, D.C. on March 9, 2017. (Jabin Botsford/The Washington Post)

Packed into a ritzy Washington hotel ballroom, a meeting of nearly 1,500 bankers momentarily turned into a pep rally. Be proud of being a banker and of the industry’s record profits, the speaker implored the assembled. In fact, he urged, it’s time to ask Congress for help so the industry can do even better.

“I don’t want a seat at the table. I want the table,” James Ballentine, chief lobbyist of the American Bankers Association, told the crowd.

After spending years humbled by the fallout from the financial crisis, the banking industry is suddenly feeling emboldened. Attendance at the annual association gathering jumped 50 percent this year as bankers sense a rare opportunity with the election of Donald Trump and Republicans’ control of Congress to upend dozens of regulations put in place after the financial meltdown.

Critics argued banks are doing well enough without the help. But that has not stopped Trump from directing Treasury Secretary Steven Mnuchin to prepare a report this summer outlining which rules should be scraped. Already the administration has begun replacing some of the industry’s toughest regulators with business-friendly officials.

To keep up the momentum, the visiting bankers descended on Capitol Hill this week to make personal appeals for repealing regulations they say have gone too far and make it difficult to loan money to consumers. Many wore blue “America’s Banks” pins as they recounted their stories of regulatory woe. Some scored meetings with House Speaker Paul D. Ryan (R-Wis.) and Sen. Ted Cruz (R-Tex.) and cruised government buildings with pamphlets outlining their concerns. Others signed up for ABA’s first “school” to train bankers to run for public office.


The faces of the effort are community bankers such as Robert Jones, the longtime president of United Bank in Atmore, Ala., a $500 million community bank that specializes in serving the type of poor, rural customers that supported Trump’s election. “I know a lot about cotton and peanut farms,” he said.

“For the last eight years, it didn’t matter what was said, we weren’t going to get things done,” said Jones, adding that “despondency” had set in. “Now there is some optimism.”

The industry’s aggressive lobbying push, though, comes with an inconvenient reality: the banking business has rarely been better.

“They are doing great under the current system,” said Marcus Stanley, policy director for Americans for Financial Reform.

The country’s nearly 6,000 banks — from large players such as Bank of America to the small community and regional banks packed into the hotel conference room — pulled in more than $171 billion in profits last year — a new record, according to recently released Federal Deposit Insurance Corp. data. Wall Street bonuses rose for the first time in three years in 2016 to an average of $138,210, and big banks such as Goldman Sachs have seen their stock prices surge since Trump’s election, even after a pullback this week.

Ballentine, the lobbyist, told bankers they should not be embarrassed by that success. “Profit is not a four-letter word. You’re supposed to be profitable,” he said.

Besides, industry officials say, the data do not tell the full story. The banking industry has been shrinking for years, but the pace accelerated as 2010’s financial reform package, known as Dodd-Frank, was implemented, they say. And many of the rules meant to rein in large bankers, such as Goldman Sachs and JPMorgan Chase, have also been applied to much smaller players that are struggling to comply. Community banks, which typically have $10 billion or less in assets compared with large, global banks such as JPMorgan, which has more than $2 trillion in assets, are facing the same regulatory tests in some cases.

Banks are not looking for a “pity party,” Jones said. “We are not anti-regulation. We are pro-regulation that helps us to do our job.”

Small banks that struggled to afford the cost of complying with the new rules have been forced to merge with bigger players or go out of business, industry officials say. In Virginia’s Hampton Roads, there used to be 10 to 12 community banks, but now just Old Point National Bank is left, said Jennifer Register, 32, vice president of retail lending.

Before the avalanche of new regulations, the nearly 100-year-old bank could approve a new equity line of credit for customers within 48 hours, said Register, who attended the conference for the first time this year. Now that process takes three to four weeks, she said.

“We never did loans for people who could not afford it,” Register said, referring to larger banks that sustained huge losses during the financial crisis. “We are a community bank. Everyone is our neighbor.”

That might be true, but largely absent from this week’s push are the big banks that could benefit the most from a regulatory rollback.

Any effort to loosen banking regulations will probably face resistance from many Democrats and advocacy groups that say Dodd-Frank has made the financial system safer. Banks’ record profits show that despite the tougher regulatory landscape, the industry has adapted, they say.

If community banks need more regulatory relief, they will need to better separate their interests from those of their larger competitors, critics say.

Despite bankers’ complaints, government data shows an industry in the throes of a revival: There are fewer bank failures, fewer institutions labeled “troubled banks” by regulators and fewer unprofitable institutions. The FDIC found that of the country’s 5,913 banks, only 248 were unprofitable last year. That is lower than pre-financial-crisis levels and down significantly from the more than 2,000 banks that were losing money in 2007 and 2008. Community banks, which have complained the most about new regulations, have seen their profits grow the fastest, according to the FDIC.

“What we’re seeing is big-bank bills dressed up in community-bank clothing.” said Stanley of Americans for Financial Reform.

Trump has given the industry significant hope. At a recent “listening session” with community bankers, Trump peppered the group with questions about how regulators were affecting them. During the hour-long meeting, Trump encouraged Mnuchin and Gary Cohn, another top economic adviser, to address the regulatory burdens mentioned by the bankers within the next six months, according to industry officials who attended but spoke on the condition of anonymity to discuss what was said at the private meeting. The White House is “very, very close” to announcing a nominee for a Federal Reserve Board seat reserved for a community banker, a position that has been vacant for more than two years, Trump told the bankers. It will be someone the bankers would like, he said, according to several people who attended the meeting.

And the industry has another avenue for regulatory relief – the various regulators that police the industry will soon be getting new leadership.

At the Securities and Exchange Commission, one of Wall Street’s chief regulators, the transformation has already begun. The acting chair, Michael S. Piwowar, is reconsidering rules called for by Dodd Frank to require companies to disclose the gap between what CEOs and their employees earn. And he has added a new step before SEC investigators can launch an official investigation into a corporation or issue a subpoena.

“He has disregarded decades of precedent where the acting chair’s job was to maintain the status quo. He is one of the most active acting chairs in anyone’s memory,” said Dennis Kelleher, chief executive of Better Markets, a nonprofit advocacy group.

As the ABA’s annual conference neared its close, the ballroom once again began to resemble a pep rally as Rep. Jeb Hensarling, the Republican chair of the House Financial Services Committee, spoke of the damage done by Dodd-Frank. Hensarling, who is preparing to introduce legislation that would encompass many of the changes the industry wants, was repeatedly interrupted by applause as he lamented that some banks have had to fire loan officers to afford to pay for more compliance staff. Others, he said, were getting out of mortgage business because of the regulatory headaches.

Change is coming, Hensarling said. “We will free you to be the best bankers you can be, free you to help rebuild our economy and free to be successful,” he said. “Yes, we will honor your success, not vilify it, and let freedom ring again.”

As he finished, the bankers stood and cheered.