Florida Banking August/September 2024

PRESIDENT'S PERSPECTIVE

REBUILDING TRUST TO COUNTER THE REGULATORY TSUNAMI

BY KATHY KRANINGER, FBA PRESIDENT AND CEO

T rust is the glue of life. It's the most essential ingredient in effective communication. It's the foundational principle that holds all relationships.” Stephen Covey, American author and educator on leadership. Gallup recently issued its annual poll of public confidence in institutions, data it has collected since 1979. What is the level of public trust in

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driven by a shared mission and set of values. And people – with faces and names – have the ability to change the direction and perception of institutions through transparency, communication and trust. What does all of this have to do with the regulatory tsunami we are facing from Washington and the state level activity around ESG and anti wokeness? A lot.

the police, Congress, medical system, banks and other institutions? Sadly, though not surprisingly, Americans’ trust in institutions, whether they are public or private, remains at all-time lows. While banks have generally fallen in the middle of the pack among institutions, trust in banks is lower today than it was during the financial crisis and the savings and loan crisis (2008 Gallup poll), with only 27% of Americans having a great deal or quite a lot of trust in banks as institutions. We fare slightly better than the presidency (26%),

The trust deficit and crushing regulation are a vicious cycle. The recently issued Spring 2024 Unified Regulatory Agenda (note that key Federal regulatory and legislative items can be found on the Federal Issues Members Only page by logging into FBA’s website) is case in point. As if the sheer volume of activity is not enough, many of the actions are unwarranted, overbroad and outside the respective agency’s statutory authority. The CFPB alone has more than a dozen regulatory initiatives ongoing, including final rules our industry partners are

“PEOPLE — WITH FACES AND NAMES — HAVE THE ABILITY TO CHANGE THE DIRECTION AND PERCEPTION OF INSTITUTIONS THROUGH TRANSPARENCY, COMMUNICATION AND TRUST.”

and it goes down from there with newspapers, the criminal justice system, big business, television news and Congress (which sits at 9%!). It is easy to demonize institutions as faceless and nameless, seemingly unaccountable and out of control. Yet, institutions are made up of people

fighting through litigation. The good news? When we put names and faces to those institutions, they fare better. People have higher trust when asked about the performance of their congressional representative, banker and CEO/ employer (myriad sources: Pew, ABA and Morning

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