Pub. 8 2017 Issue 3

www.wvbankers.org 10 West Virginia Banker Data Makes All the Difference By Loren C. Allen, WVBA General Counsel/Government Relations G ood public policy (good for both banks and their customers), always begins with the iden- tification of a prob- lem or an issue within the existing legal or regulatory regime arising from new or unique market conditions which ad- versely impacts the exchange of finan- cial goods and services between banks and their consumers. Reliable data and information is essential to the accurate identification of these issues. Albert Ein- stein said “if you can’t explain it simply, you don’t understand it well enough.” That is very true. Without reliable data, genuine issues of law or regulation are too often overstated, misunderstood, or completely overlooked in favor of personal opinions or political points of view which almost always result in bad outcomes for all interested parties. Marshall McLuhan, renowned intellec- tual and professor at the University of Toronto said “a point of view can be a dangerous luxury when substituted for insight and understanding.” In order to effectuate real regulatory reform, the banking industry must move away from emotionally charged gut check reac- tions to ill-advised government action in favor of empirical data and irrefutable evidence of regulatory over-reach. Consider the clumsy and cumbersome Dodd Frank Act of 2010. Dodd Frank was a knee-jerk reaction based upon a panicked glance at a whole host of com- plex commercial conditions that no one at the time fully understood or appreci- ated. Only now, after years of research and analysis are we really beginning to comprehend the full scope and scale of the various catalysts for the financial cri- ses of 2008. Unfortunately, the legisla- tive and regulatory reaction to the crisis was driven almost entirely by political perspective, opinion and what people thought they knew, not actual data. Now, almost ten years later we are still struggling to undo the damage and to “right-size” regulations based on real and measurable market facts. Reliable data can empower the banking industry to peel back the many complex layers of a particular issue or concern and cast new light on underlying legal or regula- tory obstacles. Armed with good data, banks can more quickly and accurately identify and address the real cause of slowed growth, decreased productivity, or diminished profitability. Sir Arthur Conan Doyle’s famous fiction- al sleuth Sherlock Holmes demanded, “Data! Data! Data! I can’t make bricks without clay!” The way forward for our industry is to collect and compile accu- rate and meaningful information specif- ically relating to an individual institu- tion’s ability to operate in a safe, sound and profitable manner within their community. Where the data exposes a legal or regulatory impediment to effec- tive and efficient operations, we must use the data to articulate the problem and to devise a legislative or regulatory solution. Access to reliable data during the earliest stages of the legislative process would aid in drafting clear and unambiguous laws and regulations. It would also limit the potential for unin- tended and unforeseen consequences of legislative action and enable bankers to more accurately predict and plan for costs associated with compliance. The success of our industry’s legislative goals and initiatives depends upon our command of the data, our under- standing of the markets that we serve and our ability to use and commu- nicate that data in an effective way. The WVBA’s grassroots government relations platform, VoterVoice, gives us the ability to survey our members and collect important data and information relating to the legislative and regula- tory issues that matter the most to our members. As we begin to plan for the next legislative cycle, we will be using this survey tool to collect data from all of our member banks to educate and inform our discussion and debate, to carefully tailor our legislative proposals, and to support our advocacy efforts. I encourage all of our bank members to participate in our government relations surveys. Together we can turn your data into information and information into action. Data gives us the ability to know what we only thought we knew and act accordingly. The future of the banking industry depends on it. 