U.S. Bancorp CEO Richard Davis has emerged the unassuming and candid national voice of an industry that's been in the public dumpster since the financial crisis began two years ago.

"We got into this [mess] because a number of our brethren bankers made some loans they should not have," Davis said of the real estate bubble and mortgage-backed securities debacle. "We need to regain the trust of Americans."

In a wide-ranging September interview, Davis also pointed out that the Federal Reserve and Bush-era regulators did little to cool the boom or curb the dangerous-to-criminal practices by many non-bank players until it was too late.

Davis this year became the unanimous, clean-whistle choice to head the Financial Services Roundtable, the industry trade group for the nation's 100 largest financial institutions. While the roundtable represents large banks and money managers, it does not represent the big Wall Street brokerages that drew public wrath for their role in the global financial crisis.

Davis, 52, distinguishes between the mainly responsible commercial lenders in his industry and bad actors such as Washington Mutual and Countrywide that set the stage for a recession and record foreclosures. That group also includes failed Lehman Brothers, still-ailing Citigroup and AIG, which took $150 billion in taxpayer investments to stay afloat after its housing-related plays tumbled one of the world's paramount insurers.

By contrast, U.S. Bancorp quickly raised private capital in early 2009 to pay back $6.6 billion in government rescue funds, remains well capitalized, has acquired about 10 smaller or capital-depleted businesses over the last couple of years, and is considered likely to make more acquisitions.

USB reported strong growth in earnings, revenue and loans in the second quarter. Its stock price, albeit down from its pre-crash high of $37.99, trades around $21.80, sharply higher than its March 2009 low of $8.82.

Davis and his board plan to increase USB's dividend, which was slashed in 2009, as soon as the Federal Reserve gives the high sign to healthy banks, probably in early 2011.

Davis said the economy is in a "slow recovery" and that the housing market has yet to find bottom in many regions amid high unemployment.

"We don't think either will improve materially before the end of 2011," he said. "We don't see a double-dip recession, but we don't see a driving catalyst [for a quick recovery]. The way out is working together."

Financial reform a 'good start'

Davis says his industry and consumers will benefit in the long run from the 2010 financial reform laws that some critics have said weren't tough enough on Wall Street. Still the reforms call for more capital reserves, less leverage, and a consumer agency that will monitor financial products and their claims.

"Regulatory reform was a very good start," said Davis, noting that banking regulators are in charge of implementing about 250 rules that will become the meat on the legislative bones. "These regulators are smart."

Elizabeth Warren, President Obama's special assistant who is now building the consumer agency, is known for her harsh criticism of past banking practices. Davis is working with her. "Elizabeth Warren is not going to change banks, but she'll change the quality of banking. And that's not bad,'' Davis said. "We'll also do a better job of writing [product] disclosures."

A Republican, Davis chats with Warren, as well as U.S. Sen. Amy Klobuchar, D-Minn., the state's senior senator and a player in financial reform legislation.

"I talked regularly with Richard during the financial crisis and we've worked well together," Klobuchar said. "He runs a Minnesota-based institution that is in good shape."

The DFL mayors of Minneapolis and St. Paul credit Davis with enthusiastic, sometimes in-person support of local employment, community and philanthropic initiatives. That contrasts with the limited personal involvement of Jack and Jerry Grundhofer, the brothers who preceded Davis as consecutive CEOs for 15 years until 2005.

Building collaboration

The Grundhofers were industry consolidators, known best for cost-cutting and lucrative pay packages. The USB board promoted Davis about a year earlier than expected. They charged Davis, who was more popular in the ranks than his predecessors, with building profits through a more collaborative, revenue-driving culture.

Davis has invested more in people and sales. USB's vaunted "efficiency ratio," although still very good, is no longer the most-important metric.

Davis, who was paid $1.6 million in salary and bonus in 2009 -- modest among big financial service CEOs -- also has a reputation for humility and plain talk. Davis cut his pay during the banking crisis and is the first USB executive over the last few years to slip below No. 10 in the Star Tribune annual executive compensation sweepstakes.

Davis joshes that he got into banking by mistake. He also is a sharp, calculating guy whose easygoing manner belies his intensity and grasp of the numbers.

"I don't need to be 'better' than Wells Fargo or any other bank," Davis said. "I do want to be in the 'best-of' categories.''

Valedictorian of his Los Angeles suburban high school in 1975, Davis passed on scholarships to UCLA and elsewhere to accept an appointment to the U.S. Air Force Academy, a free ride for the son of a truck driver and secretary who had no college savings.

However, Davis subsequently learned that admission would be delayed for a year as the Air Force made room for its first group of female students. By then the other scholarship offers were taken. So he took a job as a teller at a Security Pacific branch and started night school in math, economics and music at California State-Fullerton.

"It was the accidental occupation, and I thought I was just passing through," Davis recalled a few years ago. "It was my first real job. And the teller is 'the bank' to most customers."

Davis, who heads this year's United Way campaign with his wife, Theresa, has spent more time in the Twin Cities than anywhere since he left California.

"I love being the biggest bank that's not based on either coast," Davis said. "I like the heartland, and this is an amazing community. And no community has stronger banks than the Twin Cities."

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com