Unlike Government, Banks Prune and Optimize

Bancorp South’s plan to prune and optimize its branch banking operations caught my attention.

The Tupelo-based bank just completed a nine-month study of its branch operations. It resulted in a plan bank officials say will “optimize” operations by “pruning” 23 lackluster branches. It will also save about $4.4 million annually.

The head of Bancorp South is Aubrey Patterson. He chaired the Commission on Mississippi Educational Structure that conducted a nine-month study of Mississippi’s 152 school districts. The study recommended that districts prune support services and back-office operations down to 82 or one per county. That would save about $12 to $14 million annually.

Guess what? The board of directors at Bancorp South approved pruning its branches, while the Mississippi Legislature buried bills to prune school district operations.

Our politicians, both state and federal, would do well to pay attention to how commercial banks, like Bancorp South, do things.

You see commercial banks are among the most American of businesses. Unlike their distant Wall Street cousins, they provide loans and financial services to Main Street and rural America. They keep local economies functioning. And, their operations are fully American with no jobs shipped overseas to augment profits.

They are also among the most taxed and regulated of American businesses. Paying full corporate tax rates and heavy fees to keep the FDIC afloat, commercial banks send more of their earnings to the federal government than most businesses. And, they operate in a regulatory environment where regulators scrutinize iotas, not just credit risk.

Attentive politicians would see that commercial banks show how American businesses can adapt to changing times, use technology to improve productivity, and prune operations to optimize efficiency and service delivery. They would see that taxed and regulated businesses can thrive in America without sending jobs and capital overseas.

Indeed, had Wall Street’s iotas been as zealously scrutinized as commercial banks’, there would have been no financial crisis. Of course, politicians had a lot to do with that lack of scrutiny.

Or, if U.S. based multi-national corporations were as pro-American as commercial banks and paid a similar share of taxes, then the deficit and unemployment rates could be noticeably reduced. Ask our federal politicians how the corporate tax code got so many deficit friendly loopholes in it.

The problem is that politicians prefer partisanship and special interest deals and ignore well-researched plans to prune and optimize government. Just as our Legislature ignored the plan from Patterson’s commission, Congress has ignored the bi-partisan deficit reduction plan prepared by the Commission on Fiscal Responsibility and Reform, the earlier Grace Commission Report, and so many others.

Voters would do well to pay attention to how commercial banks do things…and politicians don’t.

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