New American Bankers Association chief Frank Keating is a delegator who relishes political networking. In other words, he's nothing like Ed Yingling, the group's former CEO, who could pretty much do anyone's job there and was happy to leave the glad-handing to others.
Keating is a man armed with a story — or three — for any occasion. He is charming and well connected. In the space of an hourlong interview he dropped famous names from disciplines ranging from national security to ranching. His contacts list would put anyone's to shame.
Speaking of stories, how Keating got the ABA job is a bit surprising to anyone who thought the association's selection committee had been agonizing over its choices since Yingling's resignation was announced last July.
In the fall, Keating, who is 67, was wrapping up nearly eight years as the head of the American Council of Life Insurers. He was contemplating a move back to Oklahoma, where he had served two terms as governor and where two of his three children live. He was talking to a firm in Oklahoma City and figured he'd practice law and do some teaching.
But his wife, Cathy, said she wasn't quite ready to make the move. Then the recruiting firm Korn/Ferry called to see if he'd be interested in the ABA job. Keating said he flew to Boston, where the ABA was holding its annual convention, and interviewed. He was offered the job a week later and took the helm in January.
Asked to name the best day in his nearly five months at the ABA, Keating didn't hesitate: "When finally I got an office." Asked about his worst day, Keating didn't have a ready answer. He seems to be the kind of person who genuinely doesn't have bad days.
So I suggested a day that might not have been so great: the day FDIC Chairman Sheila Bair addressed his members and got a less than friendly reception. Keating disagreed.
"Quite truthfully I thought everyone handled themselves very well," he said, before launching into three stories that do not have an obvious connection to the question at hand — a typical diversion strategy used by politicians. After I press him, he finally says this: "Nobody booed and nobody hissed. Sheila Bair came in and was, how do I say it diplomatically, aggressive to say the least in her prepared remarks, which rather puzzled me. These are regulated people who pay your salary."
Then, clearly referencing the enthusiastic reception Bair received at an Independent Community Bankers of America gathering right after the ABA meeting, he said: "No one gave her a standing ovation because no government official should ever be given a standing ovation, in my judgment. I feel very strongly about that. We are servants of the served."
Keating said it is important for bankers to let regulators know when they do not like an agency's policies. "If you don't tell regulators what the problem is, they won't know you object."
Keating said he sees his role, at least in part, as defender of the industry.
"To be the voice of the industry and to take the arrows," he said in describing his role. "But we should also be at 30,000 feet, like so many predators figuring out what enemy is out there, who is after us, who is going to hurt or harm the ability to serve middle-income borrowers, customers and depositors."
Has the ABA done a good job of that in the past? "I don't know. I wasn't here."
Keating has streamlined the group's organizational structure. Many reported to Yingling; just two — Mike Hunter and Jeff Owen — report to Keating.
Hunter has worked with Keating for years, including during his time as governor and at the ACLI. The ABA's government relations, legal, and communications all report to Hunter. Owen, who has worked at the association since 1972, has everything else.
But Keating said he has no plans to overhaul the ABA.
"The good news is we have a lot of people who have been here a lot of years," he said. "That's also a challenge, because you have a tendency to be within your comfort zone. So how do you encourage good people to stay, but at the same time always be willing to break the crockery, to create a better product?"
Asked how he planned to strike that balance, Keating said he holds meetings with the top dozen or so officials every Monday and with a broader group every other week. He also lunches with people from throughout the organization and has been "amazed" by how often people have to introduce themselves to co-workers they have never met.
The ABA dwarfs the ACLI. It has 5,000 members to the ACLI's 300. It has 320 employees to the ACLI's 135. Keating said the insurance group did not wrestle with some of the major issues the ABA faces, namely the problems of regulatory burden and the divisions between large and small companies.
"The biggest surprise to me was the fear and the angst toward regulations and regulators," he said. "In eight years [at ACLI], we had one discussion around the table about a regulator who appeared to be overreaching. Overzealous regulation was not an issue. That is not the case in banking. Community bankers are very concerned about their survival. That is a culture with which I am not familiar. I was stunned by how angry bankers are."
The gulf between large and small banks is another contrast.
"I just came from that culture where companies of all sizes sat around the table and worked for the industry together," he said. "And I am hopeful that that same model can work here."
Keating has reeled in one big new member, the $24 billion-asset BOK Financial, from his home state, and he's working on signing Morgan Stanley. He met with its executive chairman John Mack recently as well as Lloyd Blankfein of Goldman Sachs and Jamie Dimon of JPMorgan Chase — both companies belong to the ABA but are not particularly active members.
"Before I am done I want to get more big-bank involvement in the ABA, but it takes time," Keating said.
Keating clearly gets politics, both the politics facing the industry as well as the politics within it. He made a point of saying the ABA has 90% of all the banks under $1 billion in assets as members and that the average small bank has just 35 employees.
"This is a political campaign," he said of the work the ABA faces. "Every one of these issues was birthed in the political process. Let's put together a team that can win."
He referred several times to "our ground game," and it's easy to imagine Keating turning the ABA into a more potent political force. "The most important thing is our ground game," he said. "We are the only financial services organization in town that can bring 1,000 CEOs to Capitol Hill."
He is worried about the crush of regulation coming from the Dodd-Frank Act, and like a lot of bankers he is particularly worried about the Consumer Financial Protection Bureau.
Yingling used to say that CFPB might be the silver lining in Dodd-Frank if it held nonbanks to the higher standards banks must follow, and if it streamlined and clarified all the red tape associated with lending. I asked Keating if he agreed.
"It's possible, but any entity that has no oversight from the Congress in terms of policy or the budget is a threat to the Republic," he said. "I am a populist democrat, small 'd'. I can't understand men of real substance like Barney Frank agreeing not to oversee" the CFPB more closely.
"We are a free society and to have no oversight from the Congress, no second-guessing. I don't think that's healthy."
But isn't it tricky, politically, for the industry to oppose an agency that was created to protect its customers?
"I think they are shell-shocked," Keating said of bankers, referring to the FDIC's rules limiting overdraft fees and the fight over interchange. "These are real threats to their integrity and independence as community banks."
"The western horizon is dark and CFPB is part of the darkness," he said. "Is that fair? Possibly not, and Elizabeth Warren is a very pleasant person."
Then Keating told two stories, which cleverly contradicted each other, making it tough to pin down where he stands. The first story was about a meeting bankers had with Warren in Arkansas that he described as "very unpleasant" and relayed that a banker he spoke with told him that "her true colors came out" during that meeting. The next story was much more upbeat: Warren and Keating's wife are both being inducted into the Oklahoma Hall of Fame this November. "I'm going to call her and congratulate her. I think it's a wonderful honor."
Keating, who said he did not know Warren before taking the ABA job, created a bit of a flap recently when he told reporters he supported her nomination. Within hours the ABA put out a statement, saying Keating's views were "misrepresented."
In the interview Keating made it clear Warren wouldn't be his first choice for the job, given the attributes he said the director should have.
"I think it would be wonderful to have somebody with banking, with financial services, background who understood the need for balance, the need for facts, the need for open-mindedness," he said.
Warren was never a banker, but what about those other attributes? Does she have those?
"I don't know. She's a very pleasant person, but she's not the nominee."