Rep. Latham tells Iowa bankers to get involved

Northwestern Financial Review, Aug 15-Aug 31, 2002 by Bengtson, Tom

U.S. Representative Tom Latham reprimanded bankers for sitting on the sidelines while other industries actively engage in the political process. Latham was the keynote speaker at the Iowa Independent Bankers' congressional breakfast July 20th on the concluding day of its annual convention at Okoboji.

"If you don't get involved, you are going to get ripped. I see the realtors beating your brains out," Latham said. "They are supporting candidates and that is why you are going to lose this. You are going to lose issues because of inactivity and sitting on the sidelines."

Latham, a regular at the IIB convention year after year, was referring to the real estate industry's effort to block a regulatory decision that would allow banks to engage in real estate brokerage. Latham sits on the House Appropriations Committee, which on July 9 adopted an amendment to an appropriations bill that would prevent the Treasury Department from granting banks the ability to deal in real estate.

"The real estate issue is an example of what long-term complacency will do," Latham told the bankers, who he believes have not been sufficiently active on this issue, nor most other issues.

"The credit unions have 350 of the 435 seats in congress tied up," he said. "If you sit back, they will get all 435. When a credit union issue comes up, we are flooded with letters."

Jim Brown, president of Hardin County Savings Bank of Eldora, Iowa, stood up after the breakfast to affirm Rep. Latham's comments. "We need to figure out ways to get directors and customers involved," he said.

Latham is Iowa's Fifth District congressman. With district boundaries redrawn for the upcoming elections, Latham will be running in the new Fourth District.

Latham said the country is in the middle of a "crisis of confidence," referring to the threat of terrorism and the shaky stock market. He blames much of the irregular corporate accounting on the 1993 tax bill, which put a cap on the amount of money companies can deduct from their income tax for officer salaries. "This is what encouraged companies to begin looking for other ways to compensate their executives with things such as stock options."

Latham lamented the farm bill, which will add $180 billion to the cost of government farm payments over the next 10 years. Latham voted against the farm bill, which he said encourages production, doing nothing to help stabilize prices. "More than 2 million acres of land will come into production in Iowa alone," he said.

Latham said the 2001 Tax Act, which he supported, had prevented our country from tumbling into a serious recession. "It is very difficult to reduce the deficit when we are at war," Latham said.

Latham said he supports permanent repeal of the estate tax, a measure the House recently passed. "People spend more money avoiding the death tax than they do paying the tax," Latham commented. The Senate is not likely to take the issue up before the fall elections.

Latham was critical of the Senate, which has not acted on many of the bills sent over from the House. "They have 60 to 70 pretty important pieces of legislation sitting on their desk over there and everything is looking pretty grim," he said. "Everything in the Senate is positioning for November. Sen. Daschle is killing everything to make sure the President doesn't get any victories."

By Tom Bengtson