- Peter Kinder resigns federal agency post, concludes position unnecessary and waste of tax dollars (6/16/18)2
- Committee to start planning process for indoor aquatic center in Cape (6/20/18)1
- Longtime downtown Cape bartender Marcellus Jones remembered by friends (6/12/18)2
- Judge denies order of protection for woman accusing deputy of stalking her (6/23/18)4
- Southeast to spend $150,000 to refresh brand with Ohio firm (6/19/18)6
- A community rallies behind Honorable Young Men's Club (6/16/18)1
- Stormy Daniels to visit East Cape Girardeau (6/13/18)20
- Jackson natives compete in 260-mile canoe race (6/16/18)1
- Mother, child reportedly hit by car in Cape Girardeau (6/18/18)
- The collateral damage of Mizzou's past failures (6/20/18)6
FDIC reform needed for local banks
While the debate over financial reform has been in full swing in Washington, I'm on the campaign trail listening to the people. This weekend, I'll be road marching the entire 100-Mile Yard Sale from Jackson to Kennett. And all along Highway 25, I expect to continue to hear the fury about the bank bailouts for which incumbents of both parties, including Jo Ann Emerson, voted.
As the financial reform debate enters its last stages, positive steps are being taken to curb corruption on Wall Street and protect Main Street. However, since I entered the race local bankers have told me they want a common-sense system to emerge, a level playing field that no longer punishes the good banks and rewards the bad banks. And what clearly makes the least sense is how the Federal Deposit Insurance Corporation (FDIC) charges banks for insurance.
A discussion of FDIC may not get the blood boiling as much as buzzwords like "too big to fail," but the local bankers I speak with are red hot about the results of government bank bailouts and how the FDIC charges banks. Current FDIC charges are calculated on an ancient 1934 formula that assesses risk based on a bank's local deposits. Today, local banks still deal almost entirely in local deposits.
Yet in the bailed-out banks, with unregulated derivatives trading desks that helped precipitate the financial crisis, domestic deposits account for as little as 1/3 of total assets. With less proportional local deposits, big banks pay less proportional FDIC fees.
As a result of the bank bailouts that few banks in the district took or needed, FDIC premiums exploded for local banks. One local bank I visited paid $50,000 in premiums last year. This year, the same bank paid a three-year assessment of $1,400,000.
When local banks see a million-dollar increase in FDIC fees, they see their profit margins evaporate. They hire fewer employees and give smaller raises. They send out fewer loans to local businesses. They call in more loans from the small entrepreneurs. The handshakes and community standing that used to seal a deal between banker and business, so central to a rural economy, disappear just as our jobs have over the past 15 years. More FDIC fees on local banks equals fewer local loans, which in turn equals fewer local jobs.
Some things are just common sense. As a Green Beret, I didn't punish good soldiers and reward the bad. Drunken drivers pay more for their insurance than perfect drivers do. Risky banks that needed the government insurance of a bailout must pay more. It is disappointing that FDIC reform did not make it into either the Senate or the House bill being considered. Conservative local banks, that didn't take or need the bank bailout, like the ones that keep our small towns thriving, must pay less. Common sense would say that any financial reform would stop punishing our local bank and bring jobs and economic opportunity back home.
As the hordes of financial lobbyists descend on Capitol Hill, don't expect that common sense from our current representative. Jo Ann Emerson now serves as the ranking member on the House Appropriations Committee's Finance Subcommittee. Over the course of her time in Congress, she's made dozens of votes over her career to encourage the risky behavior that led to this recession. Those votes came at a price -- Jo Ann has taken over $50,000 in campaign checks from big financial lobbyists. In return, she sent $700,000,000,000 to Wall Street. This is government of the lobby, by the lobby and for the lobby where Wall Street wins, but Southeast Missouri loses.
And that's why I am fighting for this seat -- I'm tired of watching the big special interests win, while the American people lose. I'm running to join the new legislators being elected all around the nation, to bring some new blood and common sense to DC.
TOMMY SOWERS, 614 N. Pine St., Rolla, MO 65402
Paid for and authorized by Tommy Sowers for Congress.