Iowa Bankers Association’s president
The Iowa Bankers Association, which provides a number of services to Iowa banks including lobbying government officials, is preparing for the upcoming legislative session. The Business Record spoke with John Sorenson, the association’s president, last week about its goals for the coming year.
Q: What are your legislative priorities this year?
A: Our No. 1 priority will be to continue to look for regulatory changes and changes to the law that will help us better serve Iowans. There are some regulatory fixes that need to take place in the state. One change is that state-chartered banks need to be on a level playing field with nationally chartered banks when it comes to disclosure of real estate fees. That one should be relatively non-controversial.
Q: What other areas will you be focusing on?
A: Another priority will continue to be economic development. We’re trying to encourage entrepreneurship in Iowa communities with the Iowa Business Council and the Iowa Coalition for Innovation and Growth. We’re working to develop the physical resources and electronic resources to help people start businesses. We’re developing a Web site where people can get technical and marketing assistance. We’re excited about that particular project. At this stage, we’ve hired a group to help design the site and we’re working on content for it. We’re also going to be working on a bill that will let state-chartered banks organize as limited liability companies. It would allow a bank to pass through its taxable earnings to shareholders, as opposed to being taxed at the corporate level, similar to the way a subchapter S company works. It would provide institutions with more flexibility and would be attractive to new banks, mostly. It would be difficult for existing banks to convert.
Q: Last year, there was a bit of a fight between the state’s credit unions and banks. Do you expect any issues to crop up this year?
A: One of the biggest threats to community banks in our state is government-subsidized competition. I am talking about credit unions and the farm credit system. We have a bill that would tax large diversified credit unions that have gone beyond what their charters call for. We know credit unions continue to push for legislation at the state level that would expand their powers. There’s a proposal to let them raise capital much like a stock company does. We’ll be fighting that. The John Deere Community Credit Union is acquiring the Deere Community Credit union in Ankeny, a transaction that will create an institution with $1 billion in capital. People assume credit unions serve the underserved – the low-income people in our society. A recent study showed that, in actuality, banks serve a larger percentage of the low income population than credit unions do. It calls into question whether they deserve their tax-exempt status.