Banking is an Ethical Profession
Luis Lobo es director de Mercados Multiculturales de BB&T
By: Luis Lobo. Recent economic events and the Great Recession have reduced the confidence that individuals, families and businesses once had in the banking industry. Bankers must now recommit to serving as ethical and involved financial advisors.
You can read volumes on how our economy got to where it is, but at the end of the day, consumers began to make financial decisions without seeking the advice of bankers. Bankers also failed to help individuals understand how to manage their finances. The two trends lead to poor financial decisions, including toxic mortgages. This is partially due to 1. the speed of information available through the Internet, and 2. a perceived devaluation of financial services. (Remember free checking?)
To help clients and communities achieve their financial goals, bankers must have strong character based on honesty and integrity. Such character leads them to routinely make sound decisions and provide financial advice in the best interest of others.
When I began my career in 1983, it was during one of the harshest recessions of the late 20th century. BB&T, my new employer, had come to Belmont Abbey College to recruit for its Leadership Development Program (LDP). On my first day of work, I found my LDP class to be one of the most diverse groups of North Carolinians I had witnessed: five whites (two of them female), three blacks and a Latino (me).
Our first job out of the training program was to collect on past-due loans. My father, an immigrant to this country, gave me great advice: Treat your clients with respect, help them manage their finances better, and they will be loyal for life.
When I joined the faculty of the American Bankers Association Stonier Graduate School of Banking 10 years ago, we had 12,500 banks in the United States. Today there are about 7,800, and the number is shrinking as bank failures and other challenges lead to more mergers and acquisitions. In a free-market economy only the best survive. The key lies in how you define “best.” To me, the best bankers are those who know their success is tied to the financial success of their clients and the communities they serve. Doing what is right for clients in the long-term and helping them understand the discipline needed to achieve their financial goals has been the most rewarding part of my career. It has also been very painful to watch families, businesses and communities hurt by “easy credit,” which caused the housing collapse and harsh economic downturn of the last five years.
Today, the banking industry has a black eye. I understand why. In the last five years, it has become obvious that many — regardless of social or economic status — do not have the knowledge or discipline needed to make wise financial decisions. It is also true that my industry cannot ignore the nearly 20 percent of the American population affected by job losses and other financial hardships of recent days. Bankers must once again get involved in their communities and provide financial training to various groups — from small business capital investment to responsible home ownership and basic personal financial management.
Financial institutions, regulators and industry educational organizations offer a variety of resources. Banks are using their websites to provide learning plans and financial calculators on basic budgeting, education savings and retirement planning. The Federal Reserve and the FDIC, in print and online, offer banks, organizations and individuals courses on life-cycle budgeting and planning. During this upcoming school year, the American Bankers Association Stonier Graduate School of Banking at the University of Pennsylvania will offer middle- and executive-level students a course on how to provide financial education in their home communities throughout the United States.
Clearly, the resources are there. But bankers can no longer expect the public to educate themselves. Involvement requires us to team up with businesses to reach their employees and share this knowledge. To reach into our communities, we must work with faith-based and other trusted organizations to educate established and newer multicultural groups. Banks can use their significant branch networks, throughout our nation, as classrooms and centers of learning.
The public looks to banks to keep their finances secure and be responsible providers of credit. As a result, we are also one of the main job creators and contributors of economic progress. I am proud to be a banker! Luis G. Lobo is an executive vice president and multicultural markets manager for BB&Tand the Chairman of the American Bankers Association Stonier Graduate School of Banking.
In the final analysis, your attitude determines your effectiveness in everything, every time! LGL www.LuisLobo.Biz
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