PRESIDENT’S MESSAGE

Lorrie Trogden | President & CEO | Arkansas Bankers Association

Elections are upon us, the state legislative session starts soon, and regulatory issues abound – what do we do in the face of all that? Advocate, advocate, advocate! We work every day to change “what is” into “what should be.” The “what should be” has a direct impact on our communities and our customers, and we are on the right side of fighting the good fight for them and for our industry.

Let’s start with the state. On April 10th Arkansas will begin its fiscal legislative session. Because it is a fiscal only session, no substantive bills can be voted on without a 2/3rd majority vote of the House and Senate. Does that mean nothing is happening? Short answer, No. We will be monitoring the session for anything that might affect banking or the budget of the State Bank Department. As you know, they are a cash agency funded by your assessments and anything affecting the department typically affects us. In addition, legislators are already contemplating ideas and bills for the 2025 substantive session. It will be here before you know it. I have already been contacted a couple of times about different subject matter being considered.

The southern states around us are also a good precursor to what is likely to head our way in 2025. These are the active issues in other states right now:

• Merchant Category Code (MCC): This did not pass in AR in 2023. As of March 2024, 27 bills are active in addition to 8 that passed.

• ESG: There are 32 active general ESG bills, along with 16 that are fiduciary only, 19 divestment bills, 5 firearm specific bills and 4 fossil fuel specific bills.

• Social Credit Score: There are 17 active credit score bills.

• Payments: There are 7 of these state level interchange bills.

• Crypto and Central Bank Digital Currency: There are 15 active bills in this arena.

As you can see, there is still a hotbed of anti-bank legislation out there and most of it will be heading in our direction. We are being proactive and on the lookout before filing starts for 2025.

Continuing the state-side of things, the ABA was a guest at several legislative committee hearing tables over the last several months. First, Senator Bryan King, Chairman of the Senate Children and Youth committee, asked the State Bank Department and the ABA to testify at a hearing. My focus was on scamming and fraud with examples of what is happening across the industry and its impact on customers. Members were very interested in the educational resources the ABA offers, and a couple of have shared some of our #banksneveraskthat content on their social media. I also accompanied incoming Vice Chairman Jason Tennant to a joint Insurance and Commerce committee meeting, where Jason focused on the effect rising insurance rates and deductibles are having on our customers’ mortgage and escrow accounts. He did a great job, and we are thankful for his participation and his advocacy!

Moving on to federal, we once again descended on the Hill during the Washington Summit in March to visit with our congressional delegation. Advocacy, Advocacy, Advocacy! We focused on several hot topics:

• 1071 – Despite the current injunction (you can read more about that in our legal update article), we advocated for passage of the Small LENDER Act and continued pressure on CFPB oversight. Big thanks to Congressman Hill for his work on LENDER!

• ACRE – We continue to push for the passage of ACRE and are thankful it has the support of our delegation. It is gaining bipartisan support, but once spending bills are passed, I don’t know if anything else will move before elections.

• Credit Unions – The credit unions were on the Hill a week before us and apparently were spreading a false narrative about why they deserve a tax exemption. An Arkansas credit union claimed that CUs are serving rural areas that banks are not. Fact Check: bankers in the room from Eureka Springs quickly pointed out that there were no credit unions in their entire footprint of small towns, and that was also true of other bankers in attendance. Busted!

• Durbin 2.0 – We have been in constant contact with our delegation about this bill since it was introduced and have lobbied hard for our delegation not to join as co-sponsors or allow it to be attached to a must-pass spending bill. The bill is not scheduled for a committee markup, but we cannot take our foot off the gas! Retailers are contacting them regularly and we must do the same!

• Beneficial Ownership Database – As you all know, the rule making and implementation of the database fell flat on its face, causing nothing but customer confusion and blame on banks. A federal judge in Alabama issued an injunction, so there will be more to come here. Our ask was that FinCEN take a step back and delay compliance until there is a chance for further education, implementation processes are worked out, and privacy concerns are addressed.

We will continue our Advocacy, Advocacy, Advocacy efforts to bring home wins for our industry, your customers, and your communities! I also encourage you to participate in campaigns reminding your bankers to vote. Regardless of who they vote for, it is so important to take part in the process. We want people who understand our industry at the table so that we stay off the menu! Thank you for everything that you do, and I look forward to visiting your bank in 2024!

Aba Officers

Jim Taylor, Chairman

First Security Bancorp, Rogers

Brad Chambless, Chairman-Elect

Farmers and Merchants Bank, Stuttgart

Chris Gosnell, Vice Chairman

Farmers Bank & Trust Company, Magnolia

Scott Saffold, Treasurer

Union Bank & Trust Co., Monticello

Randy Scott, Past Chairman

Farmers Bank and Trust, Blytheville

Lorrie Trogden, President & CEO

Arkansas Bankers Association, Little Rock

Board Of Directors

Heather Albright, Little Rock

Duncan Bellingrath, Hot Springs

Asa Cottrell, Little Rock

Joe Dunn, Little Rock

Robert Husong, Rogers

Katherine Mitchell, White Hall

Brandi Ray, Malvern

Gabe Roberts, Jonesboro

Lori Ross, Arkadelphia

Joe Ruddell, Rogers

Loren Shackelford, Fayetteville

Jason Tennant, Eureka Springs

Rob S. Tiffee, Little Rock

Scott Walker, El Dorado

Jay Wisener, Little Rock