These days, bankers are as popular as tobacco lobbyists or Big Oil executives.
They have been accused of fomenting the economic meltdown by taking unnecessary risks and of delaying any recovery by hoarding cash. More recently they've come under attack for seven-figure bonuses and junkets to posh resorts while taking billions of dollars in taxpayer bailout funds. Last week Wells Fargo canceled a trip to Las Vegas for top performers.
But while bank-bashing has become a popular sport, Minnesota bankers are not taking the barrage of criticism lying down.
On Tuesday, almost 200 bankers -- from small cities like Annandale to Minneapolis and the metro suburbs -- descended on the State Capitol for one-on-one meetings with legislators as part of an annual event hosted by the Minnesota Bankers Association.
Before boarding buses for "Bank Day at the Capitol," a sea of gray- and blue-suited bankers listened to speeches and a series of spirited pep talks from state legislators at the Hilton Garden Inn in downtown St. Paul. Perhaps mindful of this new era of austerity, bankers munched on lunches of meat sandwiches and potato chips. Each table had a metal pitcher of ice water.
"Some junket you guys are on!" Joe Atkins, DFL-Inver Grove Heights, and chairman of the House Commerce and Labor Committee, said in a speech at the event. "All these guys get to go to Vegas and you get to come to St. Paul on a rainy day. ... You've been dealt kind of a rough hand lately."
It's a rough hand that could get a lot rougher if some state and federal legislators have their way.
Indeed, amid a growing outcry over families losing their homes to foreclosure, the Minnesota Legislature is considering legislation that would require lenders to provide homeowners a chance at mediating their way out of foreclosure. And at the federal level, there is mounting support for changing the nation's bankruptcy laws to allow people to rewrite the terms of mortgages in an effort to keep more people in their homes.
Many bankers insist the twin proposals would result in higher interest rates and tighter credit terms for even safe borrowers.
Bankers also find themselves pulled in opposing ways by government agencies and elected officials. On the one hand, the Obama administration and a number of congressional leaders say banks ought to loosen their purse springs and lend more, particularly now that many of them are receiving taxpayer assistance. Yet bank regulators are increasingly pushing these same bankers to conserve cash and increase reserves in order to shore up their balance sheets.
After months of browbeating by politicians and others, bankers appeared eager Tuesday to tell their side of the story. Many of them could be seen poring over a list of "Suggested Talking Points for Legislative Meetings," a document provided by the state bankers association, before heading out to meet with their legislators.
"There has been a lot of publicity surrounding the health of the financial services industry," read the talking points. "We want to dispel some myths."
The first myth, according to many bankers, is the idea that the Treasury Department has "bailed out" all the nation's banks. In fact, banks that receive capital from the U.S. Treasury are required to pay interest on the government's ownership stake and eventually repay the government's investment. According to one estimate, the Treasury could earn $30 billion in interest from its investments in banks.
"It's not a bailout. It's a stimulus package," said Joe Witt, president and CEO of the state bankers association, in a speech before the lunch. "It's an investment from the federal government to increase their capital. ... If there is any way to get that point across to people who continue to call it a bailout, I'd encourage you to do it."
And not all banks are receiving federal assistance. Only a handful of Minnesota banks are participating in the Treasury program, while many others have decided not to apply for government help because there are too many strings attached to the cash.
Myth No. 2, according to the group, is that banks are not lending. Banks are not hoarding cash or restricting their lending, their scripts said. "Banks are in the lending business. They are open for business and are ready to make loans to qualified borrowers."
The bankers also want it known that not all of the nation's economic ills can be laid at their feet. According to some estimates, banks make up just 30 percent of the loan market. The rest comes from insurance companies, mortgage firms and investment bankers that also are in the lending business.
Indeed, as one community banker argued Tuesday in a break between sessions, it was the rapidly growing "shadow" system of hedge funds, private equity firms and other largely unregulated financial institutions that created much of the current financial crisis, since these institutions provided the market for the billions of dollars in subprime mortgages that eventually went sour.
Even so, Minnesota banks have not been immune to the lending excesses of the past decade. Indeed, regulators are concerned about the high concentration of commercial real estate loans on the books of many community banks across the state. Many of these loans have begun to go sour as property values decline.
Nationwide, nine banks and one credit union have failed in 2009. None of them has been in Minnesota.
"I think banks are getting a bad rap," said Atkins, in an interview after his speech. "They're associated with the AIGs of the world, and some of the despicable acts they've been involved in. ... But community banks are, by their nature, pretty conservative. Their idea of a high-priced junket is a trip to Applebee's."
Chris Serres • 612-673-4308