Swimming Upstream

By Evan Sparks

Rob Nichols strides into the room with a warm smile. The tip of his nose is sunburned. “I forgot I was getting my picture taken today,” he admits. “I was out salmon-fishing with my brother last weekend and I got a little too much sun.”

The fishing was excellent. Nichols and his brother, Mark, maxed out their daily catch limit of 40-pound salmon on the Sol Duc River in Washington state’s rugged Olympic Peninsula. The brothers make the trip twice a year when prized king salmon are running. “The bite was on,” he says—he and Mark hit their limit each day. “I’ll have a bunch of fresh salmon FedExed to me here in a couple of days.”

The weekend trip provided a brief respite in a rush of activity, just two weeks after Nichols was announced as the American Bankers Association’s next president and CEO. As he got up to speed on ABA, he wrapped up his work as head of the Financial Services Forum, a trade group representing the country’s largest banks, insurers and asset managers.

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Rob Nichols and his brother, Mark (right), fish the Sol Duc River in Washington state.

As Nichols transitions to a job representing banks of all sizes, he brings a track record of strategic victories at the Forum. But he recognizes that in today’s policy environment, all bankers are swimming upstream. Sometimes mere survival counts as victory. “Post-Dodd-Frank, a lot of what we were doing was stopping bad things,” he says, “an unfortunate way of measuring one’s success—but success nonetheless.”

The upstream fight is one a salmon fisherman intuitively understands. Hatched in mountain streams, the wild fish travel hundreds of miles to the ocean, and a few years later—fattened and ready—they fight their way upstream to the very spots where they were hatched, avoiding predators, ascending waterfalls and cascades and gaining thousands of vertical feet. Little wonder they give great sport when hooked.

Salmon populations are healthy in the Olympic Peninsula, notes Nichols, who is like most sportsmen a passionate advocate for sustainable fisheries. But the story is different in other parts of the Northwest—particularly the Columbia River basin, where for more than a century hundreds of dams have obstructed the traditional migration patterns of wild salmon.

The dams completely changed life for the salmon, which now had to migrate up and down fish ladders at the edges. The fish ladders are often hard to find, and with only one way up or down, sea lions and other predators lie in wait. On the Columbia River, the salmon population is one-tenth of what it was before the big dams went in.

Few people argue that the dams should be dismantled—the salmon must adapt to their new environment. Likewise, the regulatory environment for banks has permanently changed. Dodd-Frank and other laws have erected new “dams,” blocking old ways of doing business. In some cases, regulators have established narrow pathways through which bankers must navigate.

As the incoming head of ABA, Nichols’ goal is to help bankers not just survive but thrive, finding new pathways through thorny regulatory challenges and keeping the value of their services front-and-center for all Americans.

On message

Nichols keeps the average American customer at the center of his vision when communicating about bank issues. His advice to bankers is to “talk about how what you do leads to economic growth and job creation,” and he plans to sharpen this focus at ABA.

“Policymakers couldn’t care less about whether a particular policy helps or hurts a bank,” he says. “They care about whether a particular policy helps or hurts their constituents, if it impacts growth or prospects for economic recovery. Those are the terms on which you need to communicate to policymakers here in Washington.”

Nichols brings this emphasis from his decade at the Financial Services Forum, where he led a multi-pronged effort—including Hill advocacy, media appearances and live events—to demonstrate the value banks of all sizes bring to the economy and their customers. In a 2013 article in Politico, Nichols emphasized this point: “Community banks are an essential aspect of our financial system. The prospects for economic growth and job creation are inextricably linked to the prospects of community banks, along with the health of the broader financial system.”

The CEOs Nichols worked with at the Forum appreciated this focus. “Rob is an effective voice in Washington about the important role banks of all sizes play in driving the U.S. and global economy,” remarks Bank of America chairman and CEO Brian Moynihan. Likewise, John Stumpf, chairman and CEO of Wells Fargo, praises Nichols as “a strong and thoughtful leader for banks of all sizes within the financial services industry for many years.”

That’s also what Betsy Duke, a longtime Virginia community banker who has served as ABA’s chairman and a Federal Reserve governor, thought as a member of the search committee. “The biggest priority today is the reputation of the banking industry,” she says. “I think the way Rob frames the question—that banks are so important in the economy, to small businesses, to local economies—is the way to go. I expect him to organize the advocacy efforts around those themes, which I think will be more successful.”

Just as Nichols emphasizes the economy’s need for banks of all sizes, he recognizes that unity across the industry will pay dividends in advocacy. “We’re stronger with banks of all sizes working together,” he explains. “When an industry is divided, it’s less likely to achieve legislative successes. Having been in Washington a long time, I’ve seen it.”

Getting to work

Like a salmon facing a giant dam, Nichols has a realistic sense of the obstacles banks face in serving their customers and bringing economic growth to their communities. One of these is overregulation, which he says “is impeding a faster growth path.”

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As the incoming head of ABA, Nichols’ goal is to help bankers not just survive but thrive, finding new pathways through thorny regulatory challenges and keeping the value of their services front-and-center for all Americans.

Central to that rising regulatory burden is the Dodd-Frank Act and the tens of thousands of pages of regulations that implement it. Repealing Dodd-Frank is “unlikely,” he acknowledges, but “making Dodd-Frank work for banks of all sizes is hugely important.” He will focus this year and next on winning meaningful regulatory relief, especially for small banks that cannot afford to bear the compliance burden. Nichols will also keep up ABA’s focus on “policy distortions that create an unlevel playing field,” such as the credit union tax exemption and the Farm Credit System’s status as a government-sponsored enterprise.

Nichols is building on the work already done as part of ABA’s Agenda for America’s Hometown Banks, and on the “true partnership” ABA has with the state bankers associations. To get a bill passed in this difficult legislative environment, he emphasizes the need for “bringing customers into the conversation” so that lawmakers understand how bank regulations affect constituents—and for bipartisan action. “He is a bipartisan leader and reaches across the aisle to achieve better results,” says U.S. Bancorp Chairman and CEO Richard Davis.

He also comes to the job with goodwill on Capitol Hill. “I have known Rob since first being elected to the Senate, and I have no doubt that he will do an outstanding job leading ABA,” says Sen. Bob Corker, a Tennessee Republican with a record of working across party lines on the Senate Banking Committee. “He has been a tireless advocate for the banking industry during some of its most tumultuous years.”

Looking to the future

Beyond near-term policy goals, Nichols wants to help bankers prepare for the future. “I don’t know how banking products will be delivered to my children, but I know they’ll be delivered differently,” he says. “Staying ahead of that curve and ensuring that community banks are on top of this issue of technological convergence is a critically important long-term priority.”

He is also concerned that today’s young people no longer “see the need for banks in their lives,” pointing to reams of survey data showing that many in the rising millennial generation consider banks obsolete as institutions with which they have a relationship. “A payment app on your phone is not the same as a bank,” Nichols explains. “We need to communicate the important role that banks play at every stage of your life.”

Rob and Rebecca Nichols with their children, Henry and Martha Lauren.

Rob and Rebecca Nichols with their children, Henry and Martha Lauren.

Nichols’ first bank experience—one he describes in detail—was as a young boy with a junior savers account at Rainier National Bank in Seattle, where he grew up. He would go to the bank with his father to deposit his earnings from delivering papers and mowing lawns. The bank is long gone, merged into what is now Bank of America, but the memories drive Nichols’ passion for banking.

Nichols brought this formative experience to Washington, D.C., where he studied public policy at The George Washington University. After graduating, he worked in the West Wing under George H.W. Bush during the consequential moments of the early 1990s. He was later a top aide to influential Republican members of Washington’s congressional delegation: former Sen. Slade Gorton and the late Rep. Jennifer Dunn.

Nichols met his wife, Rebecca, in college; they celebrated their 20th anniversary in July. Their family grew with son Henry and daughter Martha Lauren. Both Rob and Rebecca are fervent advocates for child health; Rebecca serves on the children’s health board at Children’s National Medical Center, while Rob is vice chairman of the nonprofit group Food Allergy Research and Education. Nichols notes that food allergies are growing in prevalence, with one in five kids projected to have a food allergy by 2020. FARE supports scientific research and engages in allergy-focused advocacy—for example, passing a bipartisan bill that encourages states to put epi-pens in schools to treat life-threatening allergic reactions.

‘A time of critical concern’
Nichols became immersed in the financial sector as assistant secretary for public affairs at the Treasury Department during the George W. Bush administration. “We spent a considerable amount of time focused on banking policy and trying to create a set of economic conditions where the financial sector could do its important job,” he says.

“From his experience both inside and outside government, Rob understands that America’s financial future depends on a diverse and robust set of institutions of all sizes,” explains then-Treasury Secretary John Snow. “His knowledge and experience make him well suited to help chart the future path of the banking industry, especially in appealing to younger Americans.” Sen. Rob Portman (R-Ohio) also worked with Nichols in the Bush administration and was “impressed with his grasp of complex policy issues and his abilities as a problem solver.”

From Treasury, Nichols was hand-picked to lead the Forum. He moved a relatively sleepy outfit from New York to D.C., building it into what Time magazine called “perhaps the country’s most powerful trade association” and earning recognition from the New York Times, The New Republic, The Hill and others as one of the capital’s most effective lobbyists. Not long into his tenure, he faced the financial crisis and mortgage bust, and the Forum helped support emergency actions to “keep markets moving at a time of critical concern,” he says, then fought an uphill battle to shape the post-crisis regulatory restructuring that sought to end too-big-to-fail and deal with the causes of the crisis.

In taking on the job at ABA, Nichols will lead the entire banking industry at a critical moment. “The banking industry is undergoing a great deal of change,” says ABA Chairman John Ikard. “We sought a visionary, strategic leader, and Rob Nichols hits the mark on all counts.” He will benefit from the track record of outgoing president and CEO Frank Keating. “It’s a huge honor to be at ABA,” Nichols says. “It’s an equal honor to follow in the footsteps of someone I admire, someone of such character and dignity and accomplishment—and someone I call a friend.”

Nichols is well-suited to address thorny challenges. “He has a temperament that invites people to work together toward solutions that are sometimes not easily anticipated,” says former White House Chief of Staff Andrew Card, whom Nichols worked for just out of college. “I’ve witnessed him make a difference in everything he’s done.”

As Nichols fights for a better regulatory structure for banks, helps the industry evolve with the future and ensures banks appeal to rising generations of customers, he knows he will be swimming upstream. The obstacles are difficult, but not insurmountable, and he still wears a smile.

About Evan Sparks

Evan Sparks
Evan Sparks is editor-in-chief of the ABA Banking Journal and vice president for publications at the American Bankers Association.
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