Artisan Unscripted 4

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[00:00:20] jim-adkins_1_12-16-2021_130045: Welcome to Artisan Unfiltered, a regular podcast hosted by Artisan Advisors. I am Jim Adkins and my co-host is Jeff Voss. Today. We have Randy Hultgren as our guest. Randy is president and CEO of the Illinois Bankers Association, which is one of the oldest state banking associations in the country.

And currently represents over 105,000 Illinois bankers across 4,500 offices throughout the state. Randy's background is one of public service having served in Illinois house and Senate, then moving to the us house of representatives. In addition to his public sector work, Randy has had his share of private sector experience with stints at [00:01:00] performance, trust the investment advisors and Wintrust financial, and somewhere within all that work experience, Randy somehow found the time to become a lawyer.

So we planned a very fast paced, free flowing conversation with Randy. Touching on three areas of discussion, the legislative process and the banking industry, the current state of the banking industry and what lies ahead. And then finally the IBA's agenda for 2022 to welcome.

[00:01:24] randy-hultgren_1_12-16-2021_130040: Jim Jeff. Great to be with you. Thank you for having me, uh, really grateful for Artisan Advisors and the great work that you all do, serving banks really all over the place, but, uh, uh, we're really grateful for all that you do for our members here in Illinois. So good to be with you. I have to be honest.

I'm, uh, this'll be different for me. We started a podcast ourselves about a year ago, and so I have had the privilege of being a host of a podcast for the last year. So I may slip in every once in a while asking you guys a question. 

[00:01:53] jeffrey-voss_1_12-16-2021_130045: That's okay.

[00:01:54] randy-hultgren_1_12-16-2021_130040: Hosting kind of gets in the blood, but great with you. 

[00:01:58] jim-adkins_1_12-16-2021_130045: Yeah, we'll rotate. We can rotate the [00:02:00] hosting duties. That's fine with me. Yeah.

[00:02:02] jeffrey-voss_1_12-16-2021_130045: Well, Randy first, uh, we want to congratulate you on your appointment to, uh, be the president of the IBA back in July of last year. Uh, you know, it's, it's quite, uh, quite a responsibility taking over for Linda Cook who had been there for so many years. And, uh, we look forward to today, uh, finding out more about your plans for the future, with the IBA.

[00:02:25] randy-hultgren_1_12-16-2021_130040: Thanks, Jeff. I appreciate that. You know, it's been wonderful. A tough time to start a job. You know, I got hired on April 6th, 2020. It was literally the week PPP came out. Uh, you know, the, the idea of our, uh, great executive committee and board was to hire me so I could follow Linda around for a few months before she retired end of June last year.

And I followed her around on zoom, on conference calls, but was remote for those first three months. It was a really strange way to start a new job, but I'm absolutely loving it, such a privilege to represent. Great banks and bankers, uh, throughout [00:03:00] Illinois and, uh, being able to be there working for them every single day.

It's such a positive. I was, uh, again just loved my time in public service, but this has been wonderful as well. It's, uh, I love what I do. And it's such an honor, as I'm sure you guys feel as well, working with advising banks. They do great work. And it's one of the things that I just love about this industry is it's all about helping people make their dreams come true.

That's what banking is. And it's part of my story. I grew up in a family funeral home in Wheaton, Illinois, and worked for a little community bank. Uh, back then Gary Wheaton bank, uh, in Wheaton, Illinois, Jerry Bradshaw was the of the bank back in this mid seventies. My mom, my dad was a funeral director in Chicago, had the dream of owning a funeral home.

New, if you would ever even be able to afford it or not. He was an hourly worker at a funeral home and met with this Jerry Bradshaw community banker. He had a big adding machine on his desk and he was crunching the numbers that my folks brought in. And it was [00:04:00] kind of shaking his head saying, I don't know that this quite adds up.

But I believe in you and I believe Wheaton needs a funeral director like you and a family like yours to be running the funeral home here in Wheaton. And that was mid seventies, uh, that, uh, changed my life, changed the trajectory of our family. And honestly, I I'm convinced I wouldn't be serving in the role I'm serving in today, or I've had the privilege of serving in Congress or a lot of other areas.

But for that community banker seeing something in my parents, so, and those stories happen every single day as you guys know. Uh, and so it's a, it's a fun. Thing. And it's one of the things that I'm hoping to do more of is tell the great stories of what bankers are doing, and also inspiring young people to see that banking is a fantastic career where you can help people.

You can help people's dreams come true. That's what millennials want is a, is something where you can have some impact where it's going to provide for your family and your future, but also that you can make an impact in banking. Great, great career for that. So, anyhow, sorry, long story, but I love this. It's been a great [00:05:00] privilege and a excited, just to be talking with you guys and excited about the future of banking and the role of the IBA and Artisan Advisors to continue to come alongside helping banks. 

[00:05:11] jim-adkins_1_12-16-2021_130045: no, you're right. You know, and Jeff I'm sure will echo this. The Illinois bankers across the state are such good passionate people. You know, they care about their communities. The impact they make is incredible. And, you know, one of the things that Jeff and I, when we started this company third, 12, 13 years ago, was, you know, we need to support this fine work and protect this industry and help.

And, and so we share the same love of the industry and the people, because there's some of the finest people I've ever met 

[00:05:45] randy-hultgren_1_12-16-2021_130040: It's so true. Yeah. And it's, it's one of the things that I love about bankers is that they just don't toot their, own horn. you know,

they just feel like, Hey, that's my job is to help them like help people's dreams come true and serve on the boards of local nonprofits and get small businesses through things like COVID, [00:06:00] that's our job.

But it's, you know, it's, uh, the rest of the world needs to know what bankers are doing. Young people who I think would be great in banking going forward, need to know about that. But also quite honestly, uh, some of our elected officials need to know the great work that banks are doing and how important a bank is.

And I'm sure you guys see this all the time where a bank really is the cornerstone of a community oftentimes, and if they lose their bank, it's just a matter of time before that community is not going to be the same. And unfortunately I think it eventually might go away. That's how important the local community bank is.

So, uh, passionate about it, but also, uh, encouraging our members and our banks to tell their story or let us tell their story for them. If they're too modest to tell their story, let us tell it for them, because it's really important that the rest of the world know the great work that banks are doing. 

[00:06:48] jim-adkins_1_12-16-2021_130045: You know, as far as the story goes, you know, going switching and talking about your legislative, um, history and, and your time in Congress. Well, you just [00:07:00] real quickly, because I often wonder this, Jeff and I were talking about this the other day, what's a week, like for you. And when you're up there serving your district, uh, in Congress, what is it like, you know, how does it feel?

Like what does, what do you do, I 

[00:07:17] randy-hultgren_1_12-16-2021_130040: Yeah, it's, uh, it was a great privilege. Again, I got to serve from 2011 until 2019. So it was four terms, eight years. And what a privilege to be able to do that again, I just loved it. Uh, but, uh, also, you know, it takes a toll on family, uh, on friends, on all the things that, uh, we're involved in, but it really was kind of two different lives, basically one was policy. And so that was basically four days a week that I was out in Washington, DC. I'd usually fly in on a Monday, Monday morning. We'd I'd have meetings, uh, prep for the week meeting with staff we'd have votes Monday afternoon, and then it was solid. I had someone on my staff that was my scheduler and he, or [00:08:00] she would spend the entire day filling up my day. So every 15 minutes I had from 7:30 in the morning until 9:30 at night at appointments meetings, different things. So it was very full, uh, running one thing to the next it's. I think one of the challenges of elected officials and members of Congress is you can be so busy that it's hard to take the time to really think deeply plan look forward strategize. And sometimes I think that's the strategy of a leadership or others out there is keep us so busy that we can't think about creative ideas or problem-solving. So you really had to kind of carve out time to make time to do that. But it was meeting with constituents.

It was committee hearings. It was meeting with other legislators and then always being on call really at any, any time where votes could come up. We didn't really know when that would happen. They would give us 15 minutes notice of that first vote would be at least 15 to 25 minutes that we'd get over to the House floor and a walking over there.

And that's the one time that all members of Congress, 435 of [00:09:00] us would meet together over at votes. People you would see often or people you served on committees with otherwise. Uh, again, it was, you kind of get pigeonholed a little bit out there and it was difficult to get to know people who weren't either from your state delegation, where you be kind of bumping into at other things or on your committees or, you know, areas of interests that you have.

And that was something I was very intentional about of wanting to build relationships across the aisle. I'm Republican but, uh, I again realized that anything that's going to last, anything, that's a good policy, really ought to be bipartisan. You ought to get both Democrats and Republicans working together. You need House and Senate working together along with the administration.

If something really does have a chance to last. So that was something that was important to me of, uh, of reaching out and building those relationships, but it was busy. Uh, and then we'd finish up, uh, Thursday. So it was usually four days. We were out there Monday through Thursday or Tuesday to Friday. And then, you know, it was, we. Funny things people [00:10:00] still laugh about is last votes on a Thursday or Friday. There's about a hundred cars packed out in front of the Capitol of our, our cars are staff people in cars and that last vote, all of a sudden members of Congress are rushing to their car, uh, to get to the airport to try and get that next flight out of Reagan, uh, uh, get home.

And then we get home and it was a pretty busy weekend, you know, where you'd have a constituent meeting. A lot of times there was fundraising that you had to do parades events, rotary club, Kiwanis, pancake, breakfasts, all of these types of things. So, uh, it really was seven days a week. Uh, and again, really having to protect family time, finding time to carve out.

And again, what a privilege, you know, I think. Best memories I have. And there were so many, but you know, I'd say my favorite memories were things of solving problems and issues for constituents being able to cut through the red tape of government, where they just felt like they had no place to turn. And for us to be able to find an answer a solution for them.

I love that. I would also say [00:11:00] honestly, just every time I got to walk over to the United States Capitol to get ready for a vote. And just looking at that dome, that rotunda, uh, you know, and that. It truly is the most recognizable building in the world. More people around the world recognize the United States Capitol than any other building in the world.

The Eiffel tower, anything else? Uh, the United States Capitol is the most recognized building. So to walk over there and realize what a privilege I had to be with. I guess. about 12,000, uh, when I was, there was even a little bit less than that 12,000 people in the history of our nation who get to serve in Congress, uh, what a great privilege.

I felt very unworthy of that privilege, but also humbled and honored and challenged to do my best. So, uh, it was, it was a busy life reality too, was, you know, running every two years. We need to talk about that at some point. 

I think that made sense. Uh, at the founding of our nation, when we, you know, had a relatively small nation and a relatively small Congress, it made sense.

But right now, uh, with so [00:12:00] much money being spent every two years and, you know, I think the public gets just gets tired of elections being so often and being so expensive. So it's one of those things that, uh, never ended as soon as you'd finish one election, you got ready for the next one. And so that election cycle was always on your mind.

The fundraising cycle was always on your mind and then fitting in trying to get things done on your committees. You really, I served on the financial services committee, six of the eight years that I was out there and loved that and was able to get some big things done, uh, in the work there. Uh, honestly, a big reason why I ran for Congress was.

Dodd-Frank where I felt like it was just an overreach by government. And I felt like a lot of the entities that didn't cause the crisis were getting blamed for it. Community banks that really had nothing to do with the financial crisis and crash back in 2007 and 2008, and yet they've bore the brunt of this.

So it was a big reason why I ran grateful to get elected and also grateful, uh, had the privilege in my last term. To be able to vote on Senate bill 2155, which was significant reform to Dodd-Frank. [00:13:00] It was, again, a reason why I ran it's funny. It was one of those last votes, the day where I had somebody waiting in the car, taking me to the airport.

And so I went in to vote. We have like a little card that we can put into almost like a little, um, credit card slot. There's about 20 of these on the house floor where you can. So went over there. We had a couple of votes here. It was this big bill, a reason why I ran for Congress, put my card in there, push the button, green button.

Yes. Ran out the door. And then that thought starts going through. I hope I really pushed the button on, whereas headlines, Holtgren doesn't vote. 

[00:13:36] jim-adkins_1_12-16-2021_130045: Yes, 

[00:13:37] randy-hultgren_1_12-16-2021_130040: Uh, and then they also had this thought of, you know, what, this is kind of a big deal. This is sort of why I ran for Congress. And so I caught myself literally at the steps, going down to the Capitol, went back in, looked up at the big board.

Definitely did see Hultgren with a green dot next to it. So I did vote, but I just kind of savored it for a second. Oh, this is pretty cool. You know, this is like a little, Mr. Smith goes to [00:14:00] Washington type thing where, you know, just, uh, you know, funeral directors, kid, uh, can have the privilege of serving in Congress and have something that is significant enough to have my wife and kids and family and friends and everybody else supporters come together to help me be able to do that.

It's something you can't do by yourself. Uh, and then to be able to, um, have a real result through that process, just to savor that little. But it was just a little bit. And then I ran to the car, we rushed off to Reagan. I got on my plane and I went back to this stuff back in the district. So anyhow, it's busy.

It's great. What a privilege. Uh, but, uh, but this is, uh, this is sweet. I'm loving my work right now with the Illinois Bankers Association. 

[00:14:40] jeffrey-voss_1_12-16-2021_130045: so, Randy though, is it relates to the legislation that members of Congress vote on? so much information that needs to be digested by, by the Congress, Congress, themselves, you know, not just the committees, but the, all the congressmen that vote. [00:15:00] How, how do they do it? You know, obviously staff are an essential part of how you guys learn about each of these, the technical aspects of what you're voting on.

Maybe you can comment on that.

[00:15:14] randy-hultgren_1_12-16-2021_130040: Yeah, it's a challenge. I think it is one of the big challenges is literally the fire hose of information that you have serving as a member of Congress, where just as relentless, the amount of information, the length of bills, uh, just so much to read, to go over. And so I relied very heavily on fantastic staff.

I absolutely could not have done my job without the, people that worked for me, a lot of them, young people, you know, like right out of college, coming in and helping, and yet brilliant, hardworking, underpaid, and yet passionate about helping me, helping our, my constituents, uh, making sure that I had the information that I need sort of needed.

So that was super important. It was, you know, a lot of time and focus on our part. The reality was I knew the most about the committees that I [00:16:00] served on in legislation that came through the committees. The committees really are still very important. Both House and Senate, but also, but especially the House where we are committee driven.

And we spent a lot of time, uh, more time in committees than we do on the house floor. So it really is a opportunity for us to be able to, um, to hear more detailed testimony. Uh, and then, you know, so, you know, a lot more, I think the subject matter on the areas where you serve on the committees, but I also would have.

Friends that I trusted that I respected who served on committees that I didn't serve on that I could turn to when I knew votes were coming up, that I hear from my staff, we would talk about bills, but I would also talk to other colleagues from other states or from Illinois, other places served on committees to get their input.

And then, you know, for sure, uh, the biggest impact for me was constituents. So if, if a constituent called about something, if I met with the constituent about, uh, an issue. Definitely that resonated. That was part of my thought process. [00:17:00] That was part of the weighing process of how I was going to vote on something.

And especially if there was a significant number of constituents who took the time to contact me. And there was really a couple of different ways that constituents contact us. one was these mass email appeals, and those are important, but they don't resonate as much as if somebody takes the time. To write a handwritten note.

It might just be three sentences long and just saying, Hey, I think this is a great bill, or this is a horrible bill. Uh, that is something that really resonated for me. Uh, I read those, I got all of those. Uh, I would see the stack of postcards or email, uh, lists that went so both are important, but there's something powerful about a handwritten note or a phone call or meeting with a constituent to talk through an issue that had a big impact on me.

And last thing I would say is, uh, you know, the lobbyists get a bad name, bad reputation, but I couldn't have done my job without, uh, industry experts who had the time and ability to go deeper on issues. And reality is I was able to [00:18:00] determine pretty quickly the ones I could trust. The ones that were being honest with me that cared about me. Doing the right thing. Knowing my district giving me information, but also telling me the honest truth of pros and cons on issues so you know, I really relied heavily on industry experts or, you know, that nasty word lobbyists of, uh, being able to get information from that from them. So it was all of those things, but for sure constituents were the ones that resonated the most.

And when I would, I loved it when the Illinois bankers used to come out to Washington DC. I cleared my schedule. I never missed a chance to be able to meet with bankers from Illinois. And I would take notes. My staff would take notes and it resonated with me and absolutely impacted how I vote on issues after having a chance to meet with the banks in my district and the issues that matter to them, for sure, uh, resonated and impacted how I was going to approach my votes.

[00:18:56] jim-adkins_1_12-16-2021_130045: The, um, one thing that I've always wondered. [00:19:00] we're, you know, we have to, uh, you know, legislation comes down, uh, banking, legislation, guidance from the different regulators and things. It's up to us to, uh, put a lot of it in place for our clients. And one thing that's always bothered me, or I certainly wondered about is people that are writing legislation that aren't bankers.

And we see that a lot when we, when Jeff and I, and some of our people read some of this stuff, we think that's not practical. They should've asked somebody. Do the staffers and the people that are writing this, do they reach out to industry participants and say, Hey, by the way, take a look at this. What do you think?

Because we could save you a lot of time, just call the Artisan and we can save a lot of time. some of this.

[00:19:50] randy-hultgren_1_12-16-2021_130040: Not enough, you know, I think they did some, but I would absolutely agree with you that a lot of the people who, uh, were drafting legislation or putting legislation together, [00:20:00] It didn't come from those industries. And that's the reality is, you know, it's a, it's a different career path and they're not always going to come from that.

But we needed to hear from those different industries of, are we doing this the right way? Is this really going to solve what we want it to solve is one of my greatest frustrations of time in Congress or time in the state legislature in Illinois. Was, uh, you know, theoretically a good idea, uh, that, that someone put forward maybe rushed through and then unintended consequences from unthought through, you know, not playing it out all the way or presenting it to, to folks actually who are going to have to deal with this day to day to be able to get their advice of is this, does this. really do what we want it to do?

Or what would you recommend? This is what we hope to accomplish. This is what we're thinking of doing. Is there a better way for us to do it that. That's what, how it should be done. And I think sometimes that happens, but not nearly enough, it should, it should be more, but I also think it's on us to be engaged [00:21:00] and to be that reference that, uh, legislators will turn to when they've got an issue that they want to deal with.

That's one of the things that I would say to people often, I still say to our bankers is let's build these relationships before we need them. Uh, so I, you know, the first time I get a call from someone, it was nice if I already had a relationship with them, if I already knew about their bank already knew about the impact they were having, it just helped us be that much further along when something came up.

And this idea that in reality, I worked for my constituents, you know, they, they were my boss. And so for me to have that relationship, so, and especially having like core groups of. Folks, uh, you know, I had, uh, a banker round table, uh, where I had, I think it was 10 or 12 bankers in my district. I would hear from many, many more, but these are kind of the ones that maybe were a little bit closer relationship from different parts of the district that I have, their mobile numbers.

I was able to give them a quick call and say, what do you think about this? Are we heading [00:22:00] in the right direction? Is there something. We're not seeing, you know, that we're going to regret later on. And when we do that good things happen. But unfortunately a lot of times it doesn't. And usually what scares me too, is the last minute stuff, you know, like, uh, an omnibus type bill, Christmas tree type bill that, uh, you know, has everything.

And all of a sudden it just gets kind of shoved through at the last minute. Those are the things that are most scary for me. I used to talk about it that in Springfield and Washington, too, that it felt like it took forever to get good things done and, bad stuff would happen overnight. So literally, you know, something that, uh, we would regret, uh, would just fly through it, just get shoved into something that was going to have to pass, was going to be already on the agenda.

And then they would just slip something in, and those are the things. You know, we still regret. And so taking the time, one of my heroes growing up, uh, was my Congressman, a guy named Henry Hyde, Congress from the suburbs of Chicago, just as [00:23:00] men. I mean, he was a gentleman, a statesman, but, uh, I just remember so clearly big Henry Hyde, uh, talking about, uh, you know, the only thing worse than the grinding gears of government is the greased shoot of government.

Things just flying through and no one's taking a look at it. That's worse. So as frustrating as the grinding gears are that's how it was intended. That's how our founders set it up to be difficult to pass legislation.

[00:23:26] jim-adkins_1_12-16-2021_130045: Right. And now I think you're pointing is. You know, if there's a lot more communication going on, we can avoid some of those unintended consequences. Your reform legislation on Dodd-Frank was very well done. And it was something that the industry really needed. Unfortunately, you know, it's too bad. We had to have reform legislation in the first place, right?

If we'd gone back to these community bankers and said, Hey, you know, this. What do you think about this? Most community bankers would have said about the original Dodd Frank, this is not geared toward you guys are aiming your gun at the wrong group. 

[00:23:57] randy-hultgren_1_12-16-2021_130040: Yeah,

Yeah. And it really was, it was, you know, [00:24:00] it was a local guy, a Rahm Emanual at the time. We said you can't waste a good crisis. Uh, and So it was, it was all of this. I would say file cabinets full of bad ideas, uh, that got dumped into one big bill. Some of it really good, some things really needed to be done.

Absolutely. You know, there's some things that, uh, there were real problems that needed to be addressed, but then there were a lot of other things that, that really shouldn't have been. And I appreciate that. We spend a lot of time on the House version that I think was even better. We ended up kind of having to go with what the Senate could pass, which was more than 2155 version, which was a scaled down.

Dodd-Frank reform is still very good, but not even as good as our House version would have been, but you're right. It would have been so much better if we could have dealt with that stuff in, uh, a reasonable process where there's open conversation, give and take dealing with it. There were real problems.

There was problems of lack of oversight in certain areas, but community banks really weren't the problem.

[00:24:59] jeffrey-voss_1_12-16-2021_130045: [00:25:00] So how, yeah. I'm gonna ask this question and it's a regulator type question, bankers, as you know, often a struggle in communicating with. Uh, it's it's examiners. Um, how, how does Congress communicate with those same bodies? Obviously, you guys are drafting the legislation there they're responsible ultimately to implement it, but do they weigh in on and the legislation itself before it ever gets produced or.

Is that something that, that is produced independent of them and they just have to deal with.

[00:25:43] randy-hultgren_1_12-16-2021_130040: Uh, it depends, you know, so I think it really is the circumstance where sometimes they absolutely do. Sometimes they are the driving factor, why legislation gets written and certain things regulators can do without legislation. Activity without, uh, legislation, driving them, the decisions they make, some things are [00:26:00] left up to them.

And, and I think that's a real problem too. When we pass legislation, that is to be determined by the regulators, you know, where we hit, we don't, we just kind of, again, shove something through and hand over responsibility that again, I think, uh, our founders intended for Congress to lay out the framework and lay out the practical.

Processes again, it's hard work with. 435 of us to work that out, but that was really what we're supposed to do. But sometimes I think we gave too much authority to regulators to put in a lot of the details in the structure and functioning of regulation. And I think that's a mistake, but so I do think regulators are still sometimes involved early on.

They definitely are involved later on. And oftentimes, you know, they're the ones who are implementing the legislation that has passed. And sometimes again, it's written in a way where there's, um, room for them to kind of make it how they want it to be. You know, we've seen different [00:27:00] entities with different administrations play very different roles or have a very different perspective of how aggressive they ought to be, uh, in oversight, uh, in regulation, in examination. And so, uh, I still think, you know, a lot of this does, it comes from the top. There is a direction that can be set by administrations that their appointees, uh, run with.

And then the reality is, is. A big chunk of high percentage of many of these entities that are not, um, political, uh, theoretically you know, that they are career hire-ees of the government. I would say bureaucrats, uh, but you know, they're, they're there for their career and they stay through administrations and, uh, and so working with them as well, figuring that out, uh, and then kind of circling back full circle. We as members of Congress had responsibility for oversight of regulators and [00:28:00] examiners. And so they would come before us, depending again, on the entity, usually several times a year that they would come and testify before our committees, where we'd have a chance to be able to ask questions, to be able to drill a little bit deeper on things.

And, you know, maybe bring up, uh, questions or challenges of why they are doing what they were doing. And then again, full circle, if, if they are unresponsive, if we feel like they're regulating in a way that was not intended by the original legislation, there's opportunity for us to introduce new legislation, to try and reign that in or clarify that further. It's a difficult process, but it's all of this kind of trying to work together. 

[00:28:36] jeffrey-voss_1_12-16-2021_130045: Yeah, we, we find in dealing with our bank clients that. The best defense usually is following the written regulations that are there. And, and what we, what will you see in practicality is, uh, many times the examiners will take that gray and, and try to shape their own [00:29:00] rules out in the field. And what we focus on is what the written word says.

And if, if we stick to that and we tell them, The banker to stick to what's what's written usually that's their best defense. And if they're following what was written, uh, that, that usually bears them well. 

[00:29:20] randy-hultgren_1_12-16-2021_130040: Yeah.

I think it's good advice. I also think if they feel like they can. Um, and I think the here, again, it's got to be a very respectful relationship. It's gotta be a, a recognition of. the power that the regulator has, but, you know, I think there are appropriate ways to, to ask questions or to present, uh, maybe a specific scenario that's unique for this bank, for this area.

That's important, again, in a very respectful way for those regulators to know about that, or, you know, certain requests of. We'll do this, but I do want to know you. We want you to know of, you [00:30:00] know, how challenging this is. We're, you know, a team of five or six people at a small bank. We're going to have to pull somebody away from working with customers to be able to put together what you're asking for.

We'll do that. If you really feel like you need that, but want you to know that this is just the reality of the situation that we're in. So I think that's important too, you know, always in a respectful way of, uh, letting them know. I think for the most part, I hope, uh, regulators are, are open to that. Um, you know, it is, it's a different scenario, uh, that I've seen.

So I was in elected office for 24 years. Uh, when I first back ran back in the nineties, it seems like people who wanted to work in government for the most part, were looking for a nine to five job with a pension, uh, was kind of the idea of working in government. I think it's been different over the last decade or so where people want to work in government because they want to impact, you know, they have an agenda that they want to impact.

And that's a lot of times where they're going to certain regulatory [00:31:00] entities is to, to have that impact. Uh, and. I don't know. I I'm nervous about that. Uh, again, I think that ought to be a legislative process of really determining agendas and how regulation ought to be, uh, implemented. So I do think that's something we have to be wary of or aware of, at least if there is a change in motivation or, or using this kind of a gotcha type approach, 

I've seen that at times where, uh, it can feel like regulators are coming in and not leaving until they find something they can write you up for or fine you for. Uh, and, and boy, that's, I don't, again, I don't think that's what was intended, uh, if something is going wrong, absolutely. Uh, that ought to be identified and clarified. But I think we ought to celebrate those times when our banks or small businesses or others are doing good, doing the right thing.

And our government is coming alongside to help them do the right [00:32:00] thing. That's really what I think.

[00:32:02] jim-adkins_1_12-16-2021_130045: I think you're spot on. You know, we do a lot of work with regulators from all different agencies. Jeff's comment earlier, you, you combat the regulators with facts. Be factual, be factual. Keep the personalities out of it. Keep these, you know, these, these perceived slights, uh, you know, to your, you know, to your professionalism, put those away.

Those are probably in your head anyway, but battle them with facts and be reasonable. But at a certain point, you know, when a regulator digs in they're in, okay. And you, you know, our approach has always been, we're going to take you all the way to the end. And then when you dig in, we're going to say, okay, we're going to do it your way, but know that we disagree with this, but we will do it your way because you're the regulator, you know?

And so we found that approach has really been the best approach over the last decade. You know, we've had a lot of regulatory [00:33:00] issues for sure. Um, 

[00:33:02] randy-hultgren_1_12-16-2021_130040: Now I think that's wise advice. 

[00:33:03] jeffrey-voss_1_12-16-2021_130045: Let's let's uh, change gears. We're going to ask you some big picture questions here, like, uh, do you, do you think, you think we need more community banks in our country? 

[00:33:16] randy-hultgren_1_12-16-2021_130040: Well, we need community banks. I think we need, um, many community banks. And, and I honestly, I think we need banks of different sizes. Uh, you know, I don't think we want to follow models of other countries where they've got just a handful of big banks. I don't think that. It's horrible for communities. We talked about that earlier of the damages done when a community bank leaves.

So we absolutely do need, I think we do need more community banks. And so it makes me sad. It makes me concerned when, you know, in Illinois we've only had one denovo bank in a decade. Uh, and yet we've had so many banks that have closed or consolidated got bought out. I'm not sure exactly what, what the right number is, [00:34:00] but, uh, this continued trend of always shrinking is not healthy.

There's gotta be a point where we start seeing growth again. So, uh, I hope that happens soon. So yeah, I'd love to see more community banks. Uh, because again, I, uh, there is such value there there's, um, Yeah, there's challenges, you know, it's, it's tough to run any bank, but especially a smaller community bank.

It is very challenging dealing with, how much regulation is there, how expensive it is, how difficult it is to find good talent. All of these are real challenges that, uh, that banks face, but it's, it's important and we need them. Uh, so Yeah.I would, I would say more is better and especially just changing this trajectory of always declining back to a point where we're starting to increase again, is really what I'm hoping for and what work we're working for at the Illinois Bankers Association.

[00:34:51] jim-adkins_1_12-16-2021_130045: Yeah, I think, you know, Jeff and I were looking at some stats the other day and one in the mid eighties, Jeff, we had around 14, 15,000 [00:35:00] individually chartered banks. Now we're down to what, 5,000 Jeff.

[00:35:04] jeffrey-voss_1_12-16-2021_130045: Yep. 4,000 and change.

[00:35:07] jim-adkins_1_12-16-2021_130045: And now that's a long time it's, you know, 30 years or so. But, uh, and so that's a long time, but it's also, uh, troubling to me to see, uh, that shrinkage and, you know, we would like to, you know, we, we would want a better environment for the creation of community banks.

We would like the government to encourage. The creation of these banks. I don't think, especially over the last 10 years after the last, fall out that we had back in 2008 and nine, there was no encouraging of Denovos, right? No. Why are you crazy? You go to a regulator and they said, what are you doing?

You know? And, uh, we would like that to flip. We would want them to encourage it. Maybe there should be in some incentives to help these community banks get started because. Uh, they're, they're the lifeblood of our economy. And I, I [00:36:00] hope that Washington understands that.

[00:36:04] randy-hultgren_1_12-16-2021_130040: That's one of our things we're going to have to continue to treat. 

[00:36:08] jeffrey-voss_1_12-16-2021_130045: I would agree with you, Jim. And Randy, you know, when we, when we look at the, uh, the industry, one of the, one of the things that came out of that, uh, last downturn, Uh, 2000s was what I would call the graying of the industry and the gray of the industry is obviously a huge concern. You look around the boardrooms and you see these guys who were in their fifties, you know, back in the 80s and now they're in their eighties. And when you look at the people running the institutions there, they're no longer in their fifties, they're in their they're in their seventies, you know, on their way to retirement. And when you look at the staff beneath it, uh, there was that period of about 10 years [00:37:00] after the downturn, where very little was put into development of, of young talent.

A lot of the larger institutions were merged out of existence and they had the training programs. So, you know what, what's, what, what's your thought? And we'll call it the graying of the industry. You see it as well?

[00:37:22] randy-hultgren_1_12-16-2021_130040: Yeah, very concerned. Yeah. I was with a group of small banks, CFO, or CEOs, uh, just a couple months. And every single one of them was saying, we're not sure what's going to happen when I'm gone. You know, I don't have there's no next generation. That's interested in taking this bank over. Uh, Yeah, it's a real challenge.

So it's something we're very engaged in thinking about literally every single day is how do we train up next generations of bank leaders. We've got a fantastic program the Future Leaders Alliance, that is an awesome training program for young bankers to be future leaders of banking, but even going beyond that, [00:38:00] of reaching back, we've got awesome scholarship program for young people going to college, interested in banking and finance. And then even before that, we've got a couple of great programs. We at the IBA became the sponsor of the stock market game in Illinois. We also work with Bonzai, which is a financial literacy program and recognizing that we need to start middle school, high school, letting people know again, of great opportunities in banking. And we got to get that going right now. Uh, you know, that's the hope of, uh, having future leaders in banks all over, all over the state, all over the country. Uh, but especially in some of these smaller communities and that there is there's something that's special, certainly in working in a larger city, but there's something really special in working in a community where, you know, I, love this time of year being able to watch "It's a Wonderful Life".

Uh, but that still is happening every single day of, uh, of people. Coming alongside. And, you know, being able to look back over a year and [00:39:00] think about all the lives that were impacted, and they're not the domino impact of a bank and a banker that they can have in a community is still really powerful. And letting young people know that that still can happen today.

That's not a fairytale. That's real.

[00:39:14] jim-adkins_1_12-16-2021_130045: And I, I think that then Jeff and I talked about this with a number of industry players, one we, one way rather to bring you up. Into the banking space is to technology. And I think banks have to take a different view or attitude towards technology. They have to look at themselves, they have to realize they are in the technology game and it's, it goes beyond just, you know, your website and things like that.

There's so many things out there. That I think would excite young people. And we've often said that, you know, our strategy would be get two or three very smart young people, right out of college that have technology backgrounds, put them in a room and come back in a couple of months and basically tell them, wow, me, show him, tell me what you're going to come up with.

Show me something [00:40:00] really cool. I'll be back in a couple months. I mean, I think that's the kind of attitude that our community banks need to take. Because, if not, you're not going to draw that young person in. You're just not going to do it. You got to give them something to just get them excited. And sometimes opening accounts is not enough.

Right? You've got to have some technology and other things like that to get them excited.

[00:40:24] randy-hultgren_1_12-16-2021_130040: Totally agree. I do have to just put a plug in for one of your earlier podcasts where I figured out one of your guests said that I think it was in eight weeks. You know, we jumped like five years in technology advancement in banking. That's incredible. Uh, that's a little scary, but it's also incredible and exciting.

And it's this new opportunity again, of the big impact relatively small banks can have because of technology, but it is that hurdle. It's scary. It feels expensive, but you know, it really, it there's opportunity there to provide some, some services. Uh, New products [00:41:00] that, you know, never would have been thought of a few years ago, and now they're right there.

Uh, and it's doable. And so something been excited about and think, uh, uh, we just need you to tell them. Story, but also helping our bankers understand it and how important young people are going to be to people to help us with that technology. I, my wife and I have four great kids for a lot of years. I said kinda my main reason I had kids as was for tech support, uh, you know, Uh, that's not true.

So there's a lot of other reasons. I love my kids, but it is amazing how even one and a half year old grandson, it seems like, uh, uh, can do more, uh, you know, figuring out than I can. 

[00:41:43] jim-adkins_1_12-16-2021_130045: Right. I mean, I it's, I was laughing with of my, my kids are older and on their own now, but, you know, I was, they were asking me what are were some of the weird classes I took in college? And I said, Hey, I remember taking typing in college. And they went, what people actually taught [00:42:00] typing? Oh, yeah. Back in the day they taught typing and he said, oh, we just started typing.

I go, I know, I know I saw it as a it's. Uh, it's interesting how they can pick things up so carefully or quickly rather. And I'd love to get more of them in this space, in the banking space, because it'll only help everybody. And I like to see that. 

[00:42:21] randy-hultgren_1_12-16-2021_130040: I was telling my kids about, uh, my college, uh, my big high school graduation present was a Commodore 64 computer on which, you know, I don't know, five and a half inch floppy disc or whatever that was like cutting edge. Uh, that was pretty amazing. So, 

[00:42:38] jim-adkins_1_12-16-2021_130045: Yeah, there was, yeah, you were big time pal. 

But. what you know, long-term effects of COVID-19 when we look back over 10 years, Randy, what, what do you think we're going to say about what we've just gone through [00:43:00] as far as how it affected banking business.. 

[00:43:02] randy-hultgren_1_12-16-2021_130040: Yeah. I think, uh, banks are there to serve their communities. Banks are going to do whatever they need to do to help people. Uh, I love that again, story after story, after story of, of banks, bankers working through the night, working through weekends, working through holidays. Just to help customers who had no place else to go, uh, and how banks responded quickly, uh, when government didn't know what else to do with community banks that got that done.

So I think that's going to be an ongoing story that we can tell. I also think, you know, this new access of technology. This are, uh, other platforms that had no idea how to, how to do this. And how it has become a part of life. And it really has changed how we're going to do business, how we're going to do banking, you know, even some of the signing software, a lot of things that you just don't have to do in person anymore, where a lot of things can get done from a distance.

I think those are just going to grow the conveniences. Are there so this nimbleness. It is going to continue, [00:44:00] um, the reality that whatever comes, eople still are going to want a trusted advisor. Uh, they're gonna want someone they can turn to and grateful that I think banks are going to be needed no matter what.

Uh, and if we can help our bankers be on the forefront, recognizing new technology. And even with, you know, cryptocurrency other things, you look at surveys, people are interested in this, but they want to make sure they can still keep that relationship with the banker, uh, that there's a trust level there.

And so that's not going to go away. So I think it is, you know, that, uh, we're resilient. Uh, banks are resilient. Communities are resilient. Uh, we're nimble. We're able to do things that we never thought we'd be able to do. We're able to learn and grow and change and all of that is very positive. So, uh, in spite of all the negatives, um, and you know, I don't know that we ever completely go back.

I don't think we do go back to how we were. I think it really is, you know, this next normal of where things are going [00:45:00] from here. And, uh, we've learned a lot. We're going to take that and be ready for the next challenge. That's going to come our way, knowing that there's going to be more challenges coming our way, but together we're going to be able to get more done than we can apart.

[00:45:14] jim-adkins_1_12-16-2021_130045: Yeah. Our clients want bank, clients want the best. They want all of it. They want in-person. They want technology. They want what they want and they want it delivered efficiently. And with a smile, that's what they want. And so, yes, we're not going to go back, but I also don't think that when it's an, a very important issue, you want to sit down and look at somebody it's still a very important thing.

Uh, now those instances, you know, are changing and, and maybe not as frequent as they were back 10, 12 years ago, but, uh, they customers still want the option to take the product delivery and the way they want to take. And I think that's very important.

[00:45:54] jeffrey-voss_1_12-16-2021_130045: Yeah.

[00:45:55] randy-hultgren_1_12-16-2021_130040: Hey, uh, as my podcast host is still coming out in me. I'd love to ask you [00:46:00] guys. What's what's the number one piece of advice maybe that you're giving going into 2022, maybe a challenging year. What do you think? Uh, an opportunity maybe banks, uh, ought to be looking at that our members ought to be looking at.

And what do you think maybe, uh, one of the biggest challenges that they'd better be ready for, better be thinking about anything that comes right to mind of, you know, an opportunity to challenge that you're advising your bank customers to be aware of, to be thinking about maybe the lean into 

[00:46:28] jim-adkins_1_12-16-2021_130045: I, I think one of, you know, we're right now helping a Denovo. Yes. We're there is there, Denovos happening and it's one of the more unique Denovos. It's completely digital. And I think to watch, uh, this bank build itself. From the ground up on a digital basis has been a remarkable process.

And I, it just makes it more important for us as, as advisors to move our banks, our clients, uh, further along the digital spectrum. I don't think they're far, they're far enough. [00:47:00] In technology and they've got to commit more resources to that. Cause at the end of the day, that's where the industry's going and competition's already there, you know, with fintechs and things like that.

So my, one of my big things is making sure that banks define where they are on the technology spectrum and where they want to be. I guess that'd be a technology gap, I guess we'll just, we'll create that new term, the technology gap. Yeah. we'll create that. But, uh, but that's, that's where I'm at. Jeff, what do you think?.

[00:47:28] jeffrey-voss_1_12-16-2021_130045: Yeah, I, I would say, um, planning is an opportunity for institutions to really focus on what they do well. Um, and stick to the things that you do well, try to try to mediate the things that you don't do that well. Um, we, we see a lot of banks that kinda meander through the years and they're at this inflection point right now of trying [00:48:00] to decide what, what are we going to do?

We're we're gray. Um, we'd may not have people behind us, but they should have a well-thought out plan. And the plan shouldn't be, you know, 10 years from now, you can have a vision for 10 years from now, but you should at least be thinking about the next two or three years and plan for a con you know, a continuation of the new normal.

It's not going to go back to the way it was. And the new normal probably has some element of, of COVID that we're operating with. And the use of the technology will be an essential. Of of what they're doing going forward. So if they're, they're trying to avoid having to spend the money, we would tell them, you know, you, you need to face this and if you want to be competitive, if you want to stay having the ability to serve your clients, uh, you're going to need to do that and then focus on your, on your staff and your team.[00:49:00] 

Um, you know, it, it's hard to find good people today. And, and especially the management team, um, it's critical to keep your management team happy if they're good.

[00:49:14] jim-adkins_1_12-16-2021_130045: Right. One more quick add onto that. It's an existential question. You know, we tell our clients, okay, why, why are we here? Why are we going to be, are we going to be relevant over the next two and three years? Is there a real reason why we're doing this? Or are we just here waiting for somebody to come and buy us and that's,, that's a strategy you can do that.

That's great. But if that's not top of the mind strategy, why are we relevant? And I think it's a hard question. It's an easy question to ask, but it's a hard question to solve. And I think that that's a big thing relevancy for the community bank. It's a, it's an issue for the whole industry. You know, why are we here?

Why do we have them? And I think that's probably the biggest challenge over the next couple of [00:50:00] years.

[00:50:00] randy-hultgren_1_12-16-2021_130040: Yeah, it's great. One of the things I'll just real quick is one of the things I love to, and that we want to get across to our banks is that they don't have to do this alone. And it's one of the things I love about our relationship with Artisan Advisors and other. Relationships that we have. And even the association that we're, we're, there's people there that want to help that want to be a sounding board that, , that really want these banks, these community banks, especially to succeed, to be able to serve their communities and to be strong and viable for decades to come.

So, you know, this feeling that ha you don't have to do this alone, reach out and get some help. And it's what, again, uh, I love about what you all do in the Great, team that you put together.

[00:50:41] jim-adkins_1_12-16-2021_130045: We're going to wrap this up here pretty soon, but I think what our one question that I have is what are the big strategic goals for IBA in 2022? What are the big, big ones that you have basically said this? These are, these are our measures of success. 

[00:50:57] randy-hultgren_1_12-16-2021_130040: Yeah, it's our new chair is [00:51:00] wonderful. Michelle Gross is our chair. She's COO of Bement bank down in Bement, Illinois, just outside of Champaign. Michelle and our executive committee, uh, and our senior staff have agreed that. Our strategic plan was about six or seven years old. And so it's the perfect time for us to do a new strategic plan for the IBA. Right. in the midst of that, uh, over these next five, six months, we're putting together a strategy of really our trajectory for the next decade or two decades, for sure.

The next three to five years of how we're going to be able to continue to serve our members most effectively. Uh, so that's a big thing that, uh, I think again, the timing is perfect coming off of pandemic. Uh, the. Really difficult, challenging, uncertain years going into another challenging year, I think in 2022.

Uh, but still believing more than ever that these relationships, these, uh, ability to, to get advice And direction and help from an association or from outside advisors is incredibly important. So we [00:52:00] just want to make sure we're doing the right thing. So that's, uh, really number one priority for us. This next year, and then continuing to be nimble, continuing to define that value proposition of why is it vital for a bank and, uh, and the bankers, uh, the folks that work in that bank to be members of the Illinois Bankers Association, what value proposition do we put forward?

And continuing to think about that every single day of, of what are we doing to help our members. Better serve their customers, better serve their communities, uh, better ensure their future to continue that service for decades to come. And like we said, to even setting those plans themselves for a transition, that's going to happen and succession planning and all of that.

So for us, it's making sure that. Doing the right things that were the right size, that we've got the right focus and we're doing the best we possibly can to come alongside and help our banks and continuing to be a strong voice at every level of government, federal, state, local. [00:53:00] And it's one of the things, again, I love that the Illinois Bankers Association in Illinois is the only association that's doing that work.

Uh, that's uh, being a voice at the federal level, state level and local level city council. And I saw it where. Ideas, whether good or bad, a lot of times start at the city level and will go quickly to the state and we better be aware of that. We better be engaged. And so I'm really proud of our advocacy team that we are engaged at city council in Chicago, uh, knowing that ideas that start.

Very likely are going to go to Springfield. And so we better be engaged. We better be a part of stopping some bad things, encouraging some good things. So those are the types of things that we're going to continue to focus on of, of helping banks. As we transition out of these last crazy couple of years and figuring out what a, what, what banking is going to look like going forward, uh, how banks are going to be profitable going forward.

It's, there's a lot of questions out there, but again, I believe in it, I believe it's important and talking to. [00:54:00] Consumers, uh, the, the, the users of banks, they still want to have that relationship. They want the technology, but ultimately when push comes to shove, they want a person that they can talk to who can help them.

[00:54:11] jim-adkins_1_12-16-2021_130045: Right. And as you said, the banks are not alone. They have the IBA, there's a lot of good advisors out there, you know, that are helping in certain aspects of the industry. Uh, we're all in this together. And I echo your sentiments there. We're here to help. Everyone's here to help the bankers. Uh, it's such an important thing for our state or country and, uh, we're here to help. 

[00:54:37] randy-hultgren_1_12-16-2021_130040: that's great. Yeah, I totally agree. And, uh, just encouraging them to right now, take the time, uh, to build some of those relationships, reach out to some people who are willing to do some of that help, I think would be, uh, so good for them as we finish out this year to get into 2022. 

[00:54:54] jim-adkins_1_12-16-2021_130045: Correct. um, that wraps up our discussion with Randy , if you're interested in [00:55:00] learning more about the Illinois bankers association, please visit www.illbanker.com we hope you've enjoyed today's podcast. Until next time, this is Jim and Jeff signing off.

Have a great day.