Challenges don’t dent a banker’s pride

GUEST COLUMN DAVID POPWELL.

Despite the effects of the fiscal crisis and attacks in the courts, the industry has learned from the mistakes and is stronger than ever, says

I AM PROUD to be a banker. I say that knowing that the 2008 financial crisis battered our industry’s reputation and tested the trust of our customers. We faced harsh criticism, and we continue to be saddled with new rounds of regulations. Unfortunately, the bad decisions of a few overshadowed the dedication and professionalism of the many.

So why am I proud? Because the banking industry and First Tennessee have both learned from the mistakes and are stronger than before the 2008 crisis. We are working hard to serve our customers and our communities, helping to sustain this weak recovery through consumer and business lending. Banks, including First Tennessee, have fortified their capital position. Customers can rely on our safety and soundness. Without healthy banks, the economy cannot grow and create the jobs our country needs.

At First Tennessee, we have earned the trust of Tennesseans for 148 years. We built that legacy by dealing fairly and honestly with our customers.

We recognize the financial crisis caused real pain to real people. Rightly or wrongly, our industry has taken the brunt of the blame. In this litigious age, it is not surprising that numerous lawsuits have been filed against numerous banks. First Tennessee’s parent company, First Horizon, was named in a recent filing in Philadelphia in which two borrowers alleged our company collected unfair fees on mortgage insurance. Today there are almost a dozen similar suits against other companies, most filed by the same Philadelphia law firm.

Allegations are not facts, and exaggerated or erroneous claims against corporate defendants with perceived deep pockets are all too common. While we will not litigate the case here, it’s important to note that our standard business practice was to let our mortgage customers know that one of our affiliates was reinsuring their loans and give our customers the option to opt out of the reinsurance arrangement. Regardless of what our customers chose to do, the insurance premiums they paid, which were approved by the state insurance commissioner, did not change. And since the insurance was the standard rate, the borrowers who sued did not pay anything more than what the state allowed.

Such lawsuits generate publicity. What gets attention are the outrageous charges crafted by lawyers to foster the perception that banks are acting inappropriately. These charges, however unfounded, are designed to stoke resentment without regard for the damage inflicted on the reputation of their targets. As Mark Twain said, “A lie can travel halfway around the world while the truth is still putting on its shoes.” That’s even more true in our Internet age.

First Horizon sold our national mortgage business in 2008 and charted a new course under new leadership. We refocused on our core businesses of regional banking through First Tennessee and capital markets through F TN Financial, and we’ve made steady progress in returning to profitability and building a stronger company. But while we’re focused on the future and on serving our customers and rewarding our shareholders, we are still working our way through the challenges of our former mortgage business. We operate under regulatory oversight and legal accountability, and we take responsibility for our actions.

So despite the difficult economic and reputational climate, I am proud to be a banker. Our industry’s lending is back to pre -2008 levels: $7 trillion-plus. In 2010, financial services contributed $1.2 trillion, or 8.4 percent, of the U.S. GDP and employed 5.7 million people. First Horizon employs 4,600 of those professionals throughout Tennessee and beyond, including 2,500 in the MidSouth. We are committed to those employees and to our customers, communities and shareholders. And we are committed to maintaining the trust we have built in Tennessee since 1864.