Colin Barrett, President/CEO, Tennessee Bankers Association
When it comes to elections, my favorite saying is that “people don’t vote for the party they like but against the party they dislike.” And that’s true. That’s why each election cycle our televisions are filled with candidates emphasizing their opponents’ flaws rather than sharing their own vision for the country. But the 2022 midterms presented an interesting dilemma: “What happens when people don’t like either party?” The answer, it seems, is not much.
While historically the President’s party loses seats during mid-term elections, the Democrats performed much better than expected and any thought of a red wave quickly dissolved as election results rolled in. In a typical election, this would have been a good year for the Republicans given that the economy and inflation were the No. 1 concerns on voters’ minds. And neither have fared well under the unified control of Democrats in Washington.
But in the end, the shadow cast by President Trump far outweighed James Carville’s belief that “it’s the economy, stupid.” With the former President serving as the focal point of the midterms for both parties, the Democrats were able to sway independent and young voters. Combine this with weak candidates who presented limited appeal and a Supreme Court decision that activated Democrat voters, the Senate Democrats increased their majority by one.
In the House, Republicans won the majority but by a much narrower margin than originally expected. When the dust settles, it looks like it will be 222 to 213 Republican majority—a mirror image of the Democrat majority this last Congress. Redistricting was key to control of the House. The strong 2020 election for Republicans in state legislatures put them in position to redraw Congressional districts that will last for the next decade. Republicans controlled the redistricting of 188 (43%) House seats compared to the Democrats 73 seats (17%) with the remaining seats being drawn by a commission or split legislatures.
Here in Tennessee, the general election played out as expected. While the Senate seats were not in play, all eight of our House incumbents easily retained their seats. The redrawn 5th Congressional District was won by Republican Andy Ogles with 56% of the vote. Our team sat down with Congressman-elect Ogles before the election to talk banking and look forward to working with him in 2023. He is outspoken in his belief that the government should not dictate banking policy, which is an area where we will find common ground.
Overall, I expect a divided Congress to experience quite a bit of gridlock—especially with razor thin majorities in both the House and Senate. And when there are issues that must be addressed, I have confidence that both parties will work together.
As for the TBA’s role in Washington in 2023, we are fully engaged. The year ahead is crucial for the banking industry, especially on the regulatory front. We are focused on the FDIC’s overreach on representment and their unnecessary effort to recapitalize the DIF in such a short timeframe. And we are awaiting release of the Community Reinvestment Act language to make sure it doesn’t impact your ability to serve your customers. We are also tracking anti-ESG efforts that put banks in the middle of a fight between federal regulators and Republicans on both the state and federal level. And we are pushing back against a Central Bank Digital Currency (CBDC) that could negatively affect bank deposits.
As you prepare for 2023, I ask that one of your resolutions is to make sure your bank’s interests are known by policymakers in Washington. With trips planned throughout the year, including the TBA Washington Conference from May 15-17, there are plenty of opportunities to make your voice heard.
