Frank Keating started his new job this month as president and CEO of one of the largest lobbying groups in the country, the American Bankers Association.
The group is licking its wounds after losing a major legislative battle last year in the form of the Dodd-Frank Act.
Dodd-Frank Act was hugely unpopular with bankers.
The problem is: It was hugely popular with non-bankers. A USA Today/Gallup poll in August found that 61 percent of Americans supported financial reform, making it the most popular piece of major legislation to come out of Washington in the last two years. Health care reform got an approval rating of 39 percent.
So what can Frank Keating do about all this? Will his background as a former Republican governor of Oklahoma and co-chair of John McCain’s presidential campaign make him too polarizing a figure to deal with the Obama administration?
He once said during the presidential campaign that Obama should admit he was a “guy of the street,” had been “way to the left” and had used cocaine. Granted, this isn’t the worst thing any politician ever said about another. After all, the same was said about George Bush. The voters thought it had zero impact then, too.
Keating said in an interview with Bank Director this week that the “guy of the street” comment was not racial. Keating, a former FBI agent, said that meant Obama was a street organizer.
Keating said he was proud to be a Republican and didn’t consider himself a polarizing figure. But almost all of Keating’s financial support has gone to Republican candidates, according to OpenSecrets.org, which tracks campaign contributions. Keating said that in his most recent job as president and CEO of the American Council of Life Insurers, he was bipartisan and kept staffers with connections to both parties on his staff.
“Trade groups have to be bipartisan if they are going to be effective in Washington,’’ said Arthur Johnson, chairman of the search committee that selected Keating for the ABA. “That’s what Frank (Keating) told us right away. We have very effective people in our association staff at ABA that have both Democratic and Republican associations. (Plus, Keating) was the only two-term Republican in Oklahoma history. That didn’t happen without him being able to work with Democrats.”
After all, is it all that surprising that the new head of the ABA is a Republican? This isn’t Greenpeace, after all.
“From my standpoint the important thing for any organization is to have an important set of contacts from both parties,’’ said Steve Verdier, executive vice president of congressional relations for the Independent Community Bankers Association, another bank trade group that has often disagreed with the ABA.
ABA officials have said they think Keating will represent successfully the interests of bankers on Capitol Hill and that he has the experience needed to run a major trade organization (he spent eight years at the ACLI). He also served under presidents Ronald Reagan and George H.W. Bush in the U.S. Treasury, Department of Justice, and the Department of Housing and Urban Development, the last one working as general counsel and acting deputy secretary. He also comes from a family of bankers or bank directors that include his grandfather, father and twin brother.
Will all that be enough? Now that Republicans have control of the House, maybe Keating will have more ears in Congress. One problem is even the Republicans can’t be counted on to roll back Dodd-Frank. Banking opinion isn’t uniform, either. After all, the Independent Community Bankers Association wanted the government to break apart large financial institutions, under the idea they posed a risk to the economy. Not surprisingly, the ABA, which represents both large and small banks, was opposed to that.
At this point, it looks as if the best bankers can hope for are modifications that tone down Dodd-Frank, not repeal it. For example, could the new Consumer Financial Protection Bureau get some oversight by other bank regulators, as many bankers want? How will the new rules get interpreted by regulatory agencies?
Keating said the ABA is working on a list of legislative priorities. And while he may have an impressive background to lead the organization, the road ahead is tough and the past is littered with defeat.