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Card fees and anti-Wall Street rhetoric are playing big roles in Democratic Sen. Jon Tester's tight reelection battle with Republican Rep. Denny Rehberg.
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Frustrated by a lack of political power and fed up with blindly donating to politicians who consistently vote against the industry's interests, a handful of leaders have formed the industry's first SuperPAC.
April 4
Friends of Traditional Banking,
The organizers plan to whittle this watch list to two races before committing funds to the chosen campaigns in late September or early October.
Going public with the watch list is expected to transform the concept into something much more concrete for bankers as the Nov. 6 elections draw nearer.
"It will help them see this is a for-sure deal and we're in it for the long haul," says Matt Packard, the president and CEO of Central Bank in Provo, Utah, and chairman of the SuperPAC's board. "I expect bankers will say, 'I can see what they are doing. I get what they are driving for. Yeah, I am for that!' "
Roger Beverage, the president and CEO of the Oklahoma Bankers Association, who also sits on the SuperPAC's board, said "bankers need to see some progress, that we are actually doing something. The watch list will help us convey that message better than just the abstract that we've been talking about so far."
Of the seven races under consideration, the group is looking at four Republicans including Sens. Scott Brown of Massachusetts and Dean Heller of Nevada, Rep. Francisco Canseco of Texas and a community banker, Bob Dieterich, who is challenging Rep. Paul Tonko, a Democrat from upstate N.Y. in his second term.
The Democrats selected for potential backing are Sen. Jon Tester of Montana and Reps. Mark Critz of Pennsylvania and Jim Matheson of Utah.
The slate of seven races was chosen by the Friends of Traditional Banking's advisory council, which includes the leaders of these state associations: Arizona, Colorado, Idaho, Kansas, Michigan, Minnesota, New Jersey, North Dakota, Oklahoma, Texas, Utah and Vermont.
The SuperPAC's five-member board — Packard along with two other bankers, Beverage and another state association executive — will look at polling data after Labor Day and winnow the list to two races the week of Sept. 10.
Asked how the board will make its final decisions, Packard says, "There is no real clear-cut way of determining it. There are a lot of factors."
One of those factors is how close a race is. The SuperPAC wants to have an influence, so it is unlikely to donate to candidates with no shot of winning.
Another consideration is whether the bankers' money can make a dent. Campaigns that have already attracted a ton of contributions may not make sense for Friends of Traditional Banking.
"The premise is not to be negative," Packard says. "The premise is not to hurt people or to create a bad image like a lot of SuperPACs do. The objective is to support friends or support opponents of incumbents where we think we can have some influence and do it in a very positive way."
That's probably why the advisory council chose seven "friends" and no "foes" for the watch list. But including the Massachusetts Senate race is likely more about the challenger, Harvard Law professor Elizabeth Warren, than it is about Brown, whose vote for Dodd-Frank would disqualify him as a "friend" for many community bankers.
Packard admits that contributions from Friends of Traditional Banking probably can't move the needle in Massachusetts, as Brown and Warren have already raised more than $50 million combined. But he says selecting that race could motivate bankers. For many in the industry, Warren represents the worst piece of the Dodd-Frank Act of 2010 — the Consumer Financial Protection Bureau.
Warren initially proposed creating the agency, and after the reform law was enacted President Obama asked her to get it off the ground. She left Washington in August 2011 and soon began her campaign to unseat Brown.
"Do I think our influence will make or break that race? No, but there is a lot of emotion with her," Packard says of Warren. "She would galvanize a lot of bankers."
And that may be what Friends of Traditional Banking needs to gain momentum — common enemy that will unify bankers around the country.
To balance the selection of the Republican Brown, Friends of Traditional Banking may go with Tester of Montana for its second selected race. The one-term incumbent is in a tight race with Rep. Denny Rehberg, who has represented Montana in the House for 12 years.
Both lawmakers voted against Tarp and Tester voted for Dodd-Frank while Rehberg voted against it. You might think that would make Tester the "foe" and Rehberg the "friend," but Tester won over a lot of community bankers last year when he led the charge to delay limits on debit card swipe fees, a provision of the reform law championed by Sen. Richard Durbin, D-Ill.
"The Durbin amendment is the predominant thing that solidified him as a friend of banking," Beverage says. Tester is "a Democrat, but he is a great friend of banking. The political wisdom is that race is a toss-up. I think a lot of bankers would support Tester … based on his track record."
That's just what the SuperPAC needs — a lot of bankers.
Since its creation in April, roughly 200 have signed up. Organizers are hoping to drive that number into the thousands; many bankers have expressed interest but have so far been unwilling to sign on officially.
That's partly because SuperPACs have a rotten reputation. They are widely portrayed as a tool of rich ideologues trying to unduly influence elections. That image was largely fostered by the billionaire Sheldon Adelson's SuperPac support for Newt Gingrich's presidential bid.
But Friends of Traditional Banking is no Winning Our Future.
It is asking contributors to pledge just $150 to $500 to two federal races each election cycle. After the board of directors selects the two races, information will be sent to those who pledged, explaining how to donate to a particular candidate.
Packard says he aims eventually for 10,000 supporters, a realistic goal considering over 2 million people work in the industry.
SuperPACs were made possible by two 2010 court decisions, and are officially known as "independent-expenditure only committees" because they are not allowed to coordinate their activities with candidates.
There are no limits on contributions or expenditures so SuperPACs can direct as much money as they can raise to certain races without restriction.
That's not the case with a regular political action committee, like the American Bankers Association's BankPAC. An individual may donate no more than $5,000 a year, and then the PAC may contribute up to $10,000 to any one candidate in an election cycle — $5,000 for the primary and another $5,000 for the general election.
Maybe the negative press about SuperPACs makes some bankers uncomfortable about supporting one. But the industry needs a game changer. Many bankers feel "absolutely disrespected and disregarded" by Congress, says Crawford Cragun, a former CEO who is working with the SuperPAC to recruit bankers.
"All of us would like for a lot of things to be different, but if we do what we've always done we'll get what we've always got," he says. "We need every banker to step up, stand up, speak up and put their money where their complaints are. We need more, not less, and we need more now, not later."
Barb Rehm is American Banker's editor at large. She welcomes feedback to her column at
