Town of Islip IDA Luncheon (March, 2014)
BankUnited Chairman and CEO John Kanas addressed a record crowd at East Islip’s Irish Coffee Pub on a coming flood of regulations that will hurt banks, and by extension, borrowers, including small business owners and young people hoping to buy their first home.
The blame, Kanas said, goes to Congress, which overreacted to Wall Street’s role in the financial crisis.
“Most bankers are complaining about regulators. Regulators aren’t the problem,” Kanas said. “They have been charged with enforcing regulations that have a deleterious effect on the banking industry and the general economy. It isn’t the enforcement of the rules. It’s the rules themselves. It’s that we as an electorate have allowed our Congress to overreact to the recession and that overreaction has translated into rules.”
While Kanas said he wants “noting to so with politics,” he said “the mood in the United States, as most of you sadly recognize, is getting more progressive, liberal and forgiving. Until that mood switches and people like you who manage businesses and employ people and pay taxes can get involved in the political system, I’m afraid we’re going to see more of the same. We need to get more involved in supporting candidates that support growth in business.”
Kanas’ former bank, North Fork, which grew to be the 17th largest bank in the country with $60 billion in assets, $37 billion in deposits and 355 branches, had 27 people monitoring risk at a cost of $5 million.
BankUnited, with $16 billion in assets, has 137 people monitoring risk at a cost of $36 million despite its considerably smaller size.
“It’s cutting into bank profitability, making banks less popular and less interesting to people who invest other people’s capital,” Kanas said. “Banks work on tiny margins, spend money to keep up with government regulation and make less money. The industry is going to find it more difficult to attract capital. Unfortunately, we’re in the middle of it.”
He did place some of the blame on the banking industry for not being vocal enough.
“It’s shameful. I’m as guilty as anybody that we haven’t been more involved in the political process,” he said. “We need to be involved in the political process. Every group that’s anti-business is involved in the political process. But we on the business side are not. Our voices don’t get heard. We don’t have good representation. Then we complain about the results.
“We need to spend time, money and effort getting our voices heard, not only locally, but in Washington,” he said. “There’s a big election coming up this year and two years from now.”
Islip Councilwoman Trish Bergin Weichbrodt welcomed the crowd before Kanas’ address, taking the opportunity to tout the town’s long and continuing success at attracting businesses to Islip — and making sure they stay there. The councilwoman was feted with a surprise birthday cake at the end of her remarks.