The Banker From Jefferson City

Despite the loss of his beloved St. Louis Cardinals the evening before he sat down with Morning Consult, Cam Fine was feeling convivial, spitballing nominations for the next Speaker of the House. “I would put in Putin,” he joked. “Good strong leader, knows foreign policy, knows the issues.”

Ask anyone who knows community banking’s top lobbyist. This is “Prime Fine.” There’s very little that’s too sacred for his irreverent wit. In a town that sneezes off-the-record, Fine keeps his safety off and speaks freely about the regulators and politicians who define banking in post-Dodd-Frank world.

After over a decade at the helm of the Independent Community Bankers of America, a trade group with nearly 7,000 member banks, Fine’s primary job in Washington is to push Congress to ease the regulatory burden facing community banks. These are small to medium-sized commercial banks, thrifts, stock and mutual savings institutions like Hawthorn Bank in Jefferson City, Fine’s hometown. They are subject to many of the same rules that are intended for the biggest banks, like JP Morgan, and sometimes that can be a problem.

“I’m cautiously optimistic that some true community bank relief will get through,” Fine said. “Next year, say around Memorial Day, in the teeth of a raging election and everything, the members are going to want to do something for their community banks.”

Fine has not tread the usual path of a top lobbyist, which usually involves shuttling between government and K Street depending on the political winds. Prior to 2003, when he was asked to become the head of the ICBA, Fine had spent his entire life in central Missouri. He spent two decades running two community banks — one in Jefferson City, his hometown, and the other in Ashland, population 2,000.

He did spend time in government, but at the state level. His Missouri career culminated in a stint as Gov. Kit Bond’s division of taxation director from 1981 to 1984. Government service was inevitable, he said. “Listen, when you’re in Jefferson City, it’s a town of, at that time especially, about 33,000,” he said. “Fourteen and a half thousand worked for the state. So you’re eventually going to work for the state. It really is the definition of a company town.”

Though Fine’s a banker at heart, the modern community bank is sometimes less community, more bank: “You find that you’re no longer running the bank to serve consumers. You’re running the bank to comply with regulations. And there’s a big psychological difference between those two things.”

The regulatory regime governing community banks has been steadily growing for years. But the financial crisis led to a surge in rules with the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as Dodd-Frank. “It’s sort of a mixed bag,,” Fine said of the statute. “The actual law itself did recognize that there were differences between too-small-to-save and too-big-to-fail banks. But it all comes down to how the regulatory agencies flesh out the statute.”

Regulatory agencies like the Consumer Financial Protection Bureau, birthed by Dodd-Frank, have the power to exempt community banks from many of their regulations. But they have largely declined to do so because of “a fear of retaliation from the liberal wing in Congress.”

Ironically, the CFPB may not have existed without the Fine and the ICBA’s tacit endorsement. A pivotal meeting with Elizabeth Warren, then a Harvard law professor, led Fine to remain neutral on the bureau’s creation, which some believe gave cover for many reluctant Democrats to support it. Now, Fine says that Democrats could come to regret setting up the bureau with a single powerful director rather than an “FDIC-type board.”

“Democrats could get a Republican in the White House who has no use for the bureau, and he could appoint someone who basically dismantles the bureau, just makes it milquetoast,” he warned.

Fine has a healthy skepticism about the CFPB’s actions. “They’re protecting the consumer from the consumer,” he said. But he doesn’t regret his decision to remain neutral regarding its creation, because it helped to build his relationship with Warren, now a polarizing populist senator from Massachusetts.

“I’m glad we have the relationship we have with Warren, because I’d rather have a nice relationship with her than have her being a flamethrower and taking a torch to us,” he said. “You don’t want her ire turned your way. She has a massive following, and that would not be good. And I think she genuinely does care about community banks. There’s no question she doesn’t care for Wall Street at all.”

The same could be said of Fine himself. He has exhorted the ICBA’s members to refer to themselves as “community bankers,” rather than just bankers, to highlight their differences with Wall Street.

“One size should not fit all,” he said. “To try to regulate the little $50 million Mainstreet Bank of Ashland, Missouri, which has a population of 2,000, the same way you would Citi or JPMorgan Chase, is beyond ludicrous,” he said. While community bankers are exempt from many of Dodd-Frank’s harshest regulations, the law certainly hasn’t made their lives easier.

When it comes to the partisan House of Representatives, Fine remains hopeful that some legislative compromises can be reached. That’s more likely in the Senate with Banking Committee Chairman Richard Shelby (R-Ala.). He thinks it’s less likely in the House with Rep. Jeb Hensarling (R-Texas) as Financial Services Committee Chairman.

“Shelby has this big pragmatic streak in him, where he just wants to get decent legislation done,” Fine said. “He won’t give away the farm, but if he can get 60 or 70 percent of what he wants, he’ll make that deal. Jeb [Hensarling] won’t make that deal. Jeb is an ideologue. Jeb will just go down all flags flying.”

To Fine, there’s nothing wrong with promoting a political philosophy. But he said he’s a Midwestern pragmatist at heart, and his end goal is always to satisfy his community banker membership. “When you start allowing your philosophy to interfere with all legislation, that gets tiresome,” he said.

And when things get tiresome, Fine gets annoyed. That’s one of the reasons he came to Washington from Jefferson City in the first place. “I found that the older I got, the less tolerant I was of the examiners,” he said. “And the further away I got from my own experience with the state, the less tolerant I was of bureaucrats. So I figured, it’s probably time I go before I say something really bad. There’s a difference now, when I can go into the office of the chairman of the FDIC and yell at him, and there’s no repercussions.”