Criticism of banking conference branded ‘false’ and ‘misleading’

For the editor:

Assistant Professor Jeremy Kress, in an op-ed published Friday in the American Banker, makes false and misleading claims as he denounces the annual Banking and Payments Conference co-hosted by the Bank Policy Institute and The Clearing House.

First, Assistant Professor Kress says, “The revenue TCH and BPI derive from this year’s event is likely to support their day-to-day lobbying and advocacy activities.” This statement is false. In fact, our conference is budgeted to break even, and any variance in budget is added or deducted from net assets. The conference does nothing to fund the other activities of either organization – whether it’s The Clearing House’s payment operations or BPI’s research and advocacy. In addition, the conference budget only includes direct out-of-pocket costs (space, food, marketing); if the cost of BPI and TCH staff time were included in the accounting, the conference would consistently operate with a substantial deficit.

Assistant Professor Kress says: “Sponsors generate significant revenue from their annual party. For example, BPI won $1.4 million to have organized conferences in 2019 (the most recent year for which information is available). Remarkably enough for someone claiming to be a banking expert, Kress only reports the revenue side of BPI’s IRS Form 990 and not the costs side, which reveals that the total spend for all of our conferences, meetings and events that year was $3.47 million. Thus, BPI ran a shortfall of approximately $2 million on all its conferences, meetings and events in 2019. With regard to the conference co-hosted by TCH 2019 in particular, this event was slightly over budget, which allowed BPI to have a surplus of approximately $75,000. And, again, including the cost of BPI staff time, the conference went off with a net deficit.

Second, Assistant Professor Kress describes the event as an “exclusive” and “comfortable” affair. In fact, the event is open for registration and includes discounts for students, scholars (including Assistant Professor Kress), and government employees; the event is open and widely attended and covered by the press; and one transcription of all major panels is published after the conference and all plenary sessions, including all introductory remarks, are publicly released. By tradition, the first panel is made up of leading analysts from outside the banking industry who can provide an informed and objective view of how we are doing.

One might wonder why we would organize a loss-making conference. The answer is that we believe that valuable discussion about regulation and payment policy comes from bringing together leading bankers, analysts, lawyers, consultants, academics and regulators. There is no equivalent in this country. (Its parallel in Europe, Eurofi, is funded by industry and includes even greater participation from decision-makers.) By contrast, most academic conferences eschew the inclusion of practitioners.

Finally, we note that there are many nonprofit organizations in Washington that, in fact, depend for their income on conferences featuring executive and legislative branch officials whom they regularly lobby for support. Of course, these events don’t include the talk that Assistant Professor Kress is trying to quiet down.

Jim Aramanda, President and CEO, The Clearing House

Greg Baer, ​​President and CEO, Bank Policy Institute

Editor’s Note: Kress’ BankThink article has been updated with a mention of event spending disclosed by BPI in 2019.