The Hat Trick

What an incredible Cinderella story.

It might not be as improbable as a former greenskeeper winning the Master’s, but it’s still pretty impressive.

I’ve read three articles in three major newspapers this week detailing significant victories for the banking lobby.

1. Wall Street Journal, Wednesday — A multi-million lobbying effort by the banking industry ushers in the end of mark-to-market accounting.
2. Washington Post, today — Banks scuttle the FDIC’s toxic loan sale program.
3. New York Times, today — How the industry kept the mortgage cramdown provision from becoming law.

Is this a sign that the banking industry is no longer playing the role of the Washington Generals to the federal government’s Harlem Globetrotters? Has Wily E. Coyote beaten the Road Runner?

These were not small victories and required significant effort. The banking industry spent a reported $28 million to convince Congress that it needed to convince the Financial Accounting Standards Board that mark-to-market was outdated and broken. Sen. Mary Landrieu was visited by 30 bankers from her home state of Louisiana to discuss the cramdown provision. And, investors have given banks nearly $50 billion in fresh capital, delaying or negating the need for institutions to sell portfolios of poorly performing assets.

The American Bankers Association and the Independent Community Bankers Association are both cited as major contributors to these lobbying successes.

After being maligned for more than a year, the industry scored three goals when it needed them most. This hat trick will improve the financial returns at banks now and in the future, which will hopefully further ignite an overall economic recovery.