Why banking groups are congratulating Biden, even if Trump won’t
Despite President Trump’s refusal to concede the presidential election, financial services trade groups were quick to congratulate President-elect Joe Biden on his victory and are pledging to work with the incoming administration on industry priorities.
These statements are normally routine and perfunctory, and help the associations jumpstart getting their priorities in front of lawmakers and others in positions of power.
But the 2020 election was highly contentious and a significant number of Americans don’t believe it was fair. Because of that, industry groups must tread carefully when publicly discussing politics to avoid angering their members.
“My honest answer is I don’t believe that it [alienates anyone] but I am going to caveat that,” said Greyson Tuck, a board member at the consulting and law firm Gerrish Smith Tuck. “With the political climate the way it is today, I don’t know if there is a right answer either way. I do think it’s appropriate when a winner has been declared.”
On Saturday, multiple media outlets projected that Biden would win Pennsylvania, giving him enough electoral votes to claim victory. Biden is currently projected to win at least 279 electoral votes with a few states still undecided.
Since then, various financial services groups, including the Credit Union National Association, the American Bankers Association and the National Association of Federally-Insured Credit Unions, have congratulated Biden and Vice President-elect Kamala Harris. Other business-oriented groups, including the U.S. Chamber of Commerce and the Business Roundtable, have issued similar statements.
“I think in transitions for a presidential election, it’s traditional and gracious to congratulate the president-elect,” said Debbie Matz, a former chairman of the National Credit Union Administration. “There will always be people who didn’t vote for that person but offering to work together is part of the American system of democracy."
Besides being good manners, these statements are meant to signal to the association’s members that the group is prepared to work with new leadership on industry priorities, said Steven Reider, president of the consulting firm Bancography.
“Trade groups that want to be part of the new administration’s first week’s agenda better get in line,” Reider added. “You have [70 plus] days left to get your agenda in front of that transition team.”
In a statement on Saturday, Jim Nussle, president and CEO of CUNA, congratulated Biden and Harris on their victory, adding, “We look forward to working with Mr. Biden’s administration to advance the credit union mission and increase financial well-being of American consumers.”
To ensure it doesn’t get ahead of the news, CUNA relies on the Associated Press and other major outlets to call an election before putting out a statement, said Ryan Donovan, the group’s chief advocacy officer. The trade association generally puts out these types of press releases after an election and when a new member joins the NCUA board.
“We approach it with recognition that there are supporters of both candidates within our stakeholders,” Donovan said. “We are mindful of that. We hope that credit union volunteers, executives and members understand that no matter the outcome, we are ready to work with anyone who won.”
Groups traditionally phrase these statements extremely carefully and that is perhaps even more important in 2020 given the divisive nature of the election. Trump has vowed to fight the results in court, and many Republicans, including Senate Majority Leader Mitch McConnell, have backed this decision.
A significant portion of the electorate is also questioning the result. Thirty-four percent of respondents believe the election was either “probably not” or “definitely not” free and fair, according to a survey by Politico and Morning Consult taken in the days since Americans cast their votes. That number jumps to 68% for Republicans and those who lean that way.
Additionally, the banking industry tends to skew more conservative than other sectors of the economy. Arizent, the parent company of American Banker and Credit Union Journal, conducted a survey before the election that found 61% of bankers who responded believed Trump’s re-election would be the best outcome for the country. By comparison, 56% of all respondents, which included fields beyond just financial services, shared that view.
Overall, sources said, these press releases tend to be fairly generic and written in a way to avoid offending voters who supported the losing candidate. They also frequently steer clear of policy details.
For instance, the statement from Rob Nichols, president and CEO of the American Bankers Association, is just over 100 words and only four sentences. He notes that his group and "member banks stand ready to work with the Biden administration and lawmakers from both parties to bolster the economy, increase opportunity and create a brighter future for all Americans.”
But Nichols didn’t get into specific policy preferences. A spokesman for the ABA said issuing these types of press releases is “standard practice,” and that it did so after the 2016 presidential contest and 2018 midterm elections.
The CEOs of several megabanks have commented on the election, including JPMorgan Chase CEO Jamie Dimon and Bank of America CEO Brian Moynihan, according to reports from other media outlets. It makes sense for the money center banks to comment since they have “significant leadership” and can help “signal to the equity market of a smooth transition,” Reider said.
But smaller credit unions and banks that don’t have that level of clout are better off staying out of the fray, sources said, in part because highlighting the election results could needlessly frustrate some consumers.
Jason Lindstrom, president and CEO of Evergreen Credit Union in Portland, Maine, and chair of the CUNA Marketing & Business Development Council, said his institution traditionally stays out of politics. Discussing the election wouldn’t further the $381 million-asset institution’s role of providing financial products and services to its members, and could risk alienating at least some of them, he said.
But Lindstrom did believe it was right for industry trade groups to start acknowledging the results since their job is to lobby for credit union priorities.
“They are our advocacy wing,” he added. “They may alienate a credit union CEO. But at the same time they are who we pay to advocate on behalf of the credit unions. They need to start the relationship building early on.”