Pub. 7 2018 Issue 1

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 22 TEXTBOOK ADVOCACY By Rob Nichols, President and CEO, American Bankers Association W ASHINGTON IS ANYTHING BUT textbook these days, which can make the advocacy work of state and national trade associations a challenge. But the recent tax reform effort proves that certain staples of effective advocacy—functions at which ABA and the state associations happen to excel—have enduring value. All were on display as Congress and the administration worked together on a comprehensive package of tax reforms that we believe will help grow the economy and create jobs. They also will help banks, which previously had one of the highest effective tax rates of any business, better serve their customers and the broader economy. Those staples of effective advocacy include building respectful relationships and coalitions, speaking with a unified voice, offering expert analysis and showing discretion on when and how to offer public criticism. We were engaged in the tax reform debate from the very start, offering advice and insight on the potential effects of various provisions—such as the impact of limiting net interest deductibility—and coordinating closely with our state association allies. We also worked closely with other groups in the financial services industry, hosting daily calls to ensure our advocacy was united and effective. At every turn in the legislative process, we worked respectfully with lawmakers to improve the bill. Recognizing the tightrope lawmakers were walking to create a comprehensive bill that would have sufficient support, we as an industry were careful to offer pragmatic, constructive feedback, not public condemnations or threats that could have derailed the effort. This approach made a difference. Lawmakers, for example: • Adopted a careful approach to limiting net interest deductibility, protecting banks’ small business, agriculture and real estate customers, whom we said would be harmed by more substantial limits. • Heeded concerns about the treatment of pass-through entities like Subchapter S banks and brought the rate closer in line to the “promised” rate. • Removed provisions that would have eliminated the benefits of deferred compensation plans. • Corrected an issue relating to income recognition for mortgage servicing rights and other transactions. • Steered clear of imposing a new bank tax as a means of