American Bankers Association Chair Kenneth Kelly appeared on Bloomberg TV today to discuss the banking industry’s fight against fraud and the need for a diverse bank sector to support the various facets of the U.S. economy.
Kelly – who is chairman and CEO of First Independence Bank in Detroit – was questioned about the nomination of Kevin Warsh to be Federal Reserve chairman and the policy priorities of the banking industry. As for the former, Kelly said that he takes Warsh at his word that the Fed will remain independent. As for policy, one concern for bankers is the implications for deposits if the payment of interest loophole for stablecoins remains in place, he said. Another concern is fraud.
“Right now, we’re seeing trillions of dollars being impacted in fraud, and typically it is hitting the people who are the most vulnerable,” Kelly said. “So we need an all-hands-on approach to fraud, being sure that social media companies are taking care of their responsibilities and not turning a blind eye to allow fraud to happen to our seniors and others. That’s an area that all bankers can agree on.”
Kelly called the diversity of the U.S. banking system one of its greatest strengths, with its mix of large, midsize and community banks. But “we have a challenge” in supporting the formation of de novo banks, he said.
“I think about the rural community I grew up in, Eufaula, Alabama, with 15,000 people,” he said. “I got my very first loan … because someone in the community knew me and knew my character and was willing to loan me money. So having that ability to have, as I call it, the capillaries in rural communities, is very important in the banking system.”
