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Does your mortgage association wield political clout or inspire political doubt?

In the last few weeks I’ve attended two legislative Lobby Days at the state capital here in Atlanta, Georgia.  One was hosted by the Georgia Association of Mortgage Brokers (GAMB) (Correction by Sherwood: It turns out Brokers Lobby Day was actually hosted by the Georgia Mortgage Brokers Political Action Committee (GMBPAC) and not GAMB.  While it doesn’t change the core message of this post for GAMB and its lobbying efforts, I do owe GAMB an apology for the mis-attribution and have made corrections in red.) and one by the Mortgage Bankers Association of Georgia (MBAG)

The contrast in preparation, organization, attendance, and overall professionalism was dramatic and cannot be overstated. 


In my first lobby day experience, we met in a room; there was a general sense of disorganization.  Attendance was not impressive.  I don’t know the actual number, but I would be surprised if more than 20 brokers showed up.  We were given handouts and a brief overview of some of the key elements of a new bill that the group wanted to oppose and told we were supposed to go talk to our representatives about “our” opposition.  The overview of the bill was good, but no position statements or talking points had been written to help the group stay on message and provide a unified front.  In fact, we were asked to look at the overview and try to determine what our own talking points were going to be when we went to talk to our representatives. Interestingly, 8 of the 10 overview points of the bill I was actually in favor of, so I wasn’t personally sure how to lobby against it.  Anyway, I tried to take the issues that I did oppose and determine what a concise communications strategy would be for a legislator.  I suggested that we at least do a “rude Q&A” before people went into the field so that people would be prepared to counter some possible objections a legislator might have, like hypothetically, “uh, why is accountability bad?”, but since there were really only two or three other people in the room at the time, I don’t know how effective that was.  No appointments with senators or representatives had been scheduled for the attendees, so we were all kind of flying by the seat of our pants. 

One noteworthy item; there was one meeting with the bill sponsor that some people went to, but some of us kind of missed that window because we felt so unprepared and didn’t want to embarrass ourselves.  I did hear later that this meeting went well, but it’s unclear to me exactly how “constituents” like us influenced the result.  The few senators who were tentatively scheduled to come by the room and meet the group, well, they just didn’t come; I guess more important things came up.  There wasn’t much structure to the day, so me and two other individuals just went Rambo and ended up cornering a poor senator from our district in a dark hallway for five minutes and tried to present an ill-practiced and ill-prepared set of talking points on why the bill was flawed (made more difficult because this particular senator wasn’t even aware of the bill yet).  After that really awkward experience and somewhat feeling like an imposter in the capital, our task was thankfully over with and we just went home.  I’m not sure why, but our lobbyist was pretty much quiet the entire time and provided no guidance to the attendees.  To this day, I’m still not entirely sure who was running the show. 


In my second lobby day experience, we met in a room, it was very well attended, 70+ I believe, including individuals from Savannah, Macon, Augusta, and other places from around the state.  Our lobbyist took immediate control of the day, told us exactly what was going to happen and when.  First thing on the agenda was a legislative overview from both:

  • Rob Braswell, Commissioner, Georgia Department of Banking and Finance
  • Rod Carnes, Deputy Commissioner, Georgia Department of Banking and Finance 

Next was an overview of the entire legislative process, starting from when the lobbyist got wind of something in the works, to the legal review that occurred next, to the actions the legislative team takes upon getting involved in the process, etc. etc.  The legislative team was asked to stand and be recognized, nice touch when there are 7+ people who stand up in the crowd in addition to the 4 at the head of the room (and the lobbyist got slightly peeved because by his count, they were missing some people, another nice touch!).  This was followed by general remarks about the bill at hand under discussion, what was good, what was bad, what was happening to it, etc. as well as some of the background to how the legislative process works during the rest of the year mixed in.  Somewhere in there was a pep talk about how great next year was going to be for everyone.  While all of this was going on, we would have occasional interruptions as various high profile politicians dropped by to share their perspectives on the current bill(s) under consideration, sharing their respect and admiration for how well the organization was represented within the capital, and how they hear the associations concerns on a regular basis.  These were individuals like:

  • Casey Cagle – Lieutenant Governor of the State of Georgia
  • Chip Rogers, Chairman, Senate Finance Committee
  • James Mills, Chairman, House of Representatives Banks & Banking Committee

There were a few others, but sadly, I neglected to write down their names.  All had glowing statements for the association and iterated several times that the issues and concerns of the association were being heard at all levels of government; most offered a few minutes time to answer any questions from the group.  The Commissioner and Deputy Commissioner from the Department of Banking and Finance stayed the entire time to help with any questions as the day progressed.  After the high profile guest politicians had come and departed, the entire room got up and walked down and took a group picture on the Senate floor of the capital (Initially, I didn’t think that was going to be cool, I was wrong.)  This time I didn’t feel like an imposter, I felt like a guest.  Apparently, there was also supposed to be a picture with the Governor, Sonny Perdue, but that was cancelled at the last minute (but, maybe next time!).  At no time were we ever asked to go find our local representative and lobby them with a personalized, random, off-message, and un-rehearsed set of talking points, because, well…

… you could tell things were being handled.  The three politicians and two regulators I mentioned above are probably the most influential in the state in terms of passing, modifying, and/or killing finance regulations, and they were clearly involved.  You also had at least 11 other people in the room (and apparently there were more) on the legislative committee who were actively working issues throughout the year.  This association felt confident enough in its lobbying position that they could afford to spend their time during Lobby Day educating their members, inviting high profile politicians to come by and share their thoughts, and schedule fun photo opportunities for the group.  It felt like a fieldtrip and not an incursion into enemy territory. 

Now, if this had been your experience, would you have felt it was then incumbent upon your short time in the capital to go brace some poor legislator from your district, in a dark hallway, without an appointment, who may not have even heard of the bill yet?

Yeah, I didn’t either.

In Agreement

Interestingly, in this case, both associations were opposed to the same bill.  But what a world of difference organization and leadership make to the success of an organization.

Which group would you rather be a part of?

These are both volunteer organizations, both important constituents in the mortgage industry, and both driven by member donations and time.  So which association would you rather have at your back?  Which one do you feel would be able to get your interests heard at the capital?  If GAMB (GMBPAC) and MBAG were ever on opposing sides of a bill, who do you think would win the hearts and minds of legislators?  Who do you think would get the royal shaft? 

Judgment Day

Mortgage brokers are being assaulted from all sides right now, from state and federal regulators, consumer groups, mortgage insurance companies, and lenders.  Your role in this industry is in serious jeopardy.  To slightly augment a Terminator line, “Listen to me if you want to live”.

Get active in your lobbying associations, for mortgage brokers in Georgia, that’s GAMB and nationally that’s NAMB.  (Correction by Sherwood: Although GAMB and GMBPAC can support each others lobbying efforts, they are technically separate legal entities, thus leading to my original attribution mistake.  Join and/or participate in either one, they both seriously need your help).  I am telling you; you are not being represented well enough right now for you to survive the public onslaught because your role in this industry is an abstraction, your association doesn’t have the right message or enough resources, your leaders are floundering, and you are not involved and accounted for.  You will be regulated out of business if your state and national presence doesn’t radically change.  Give these organizations your money, but more importantly, give them your time; right now, or you won’t be around in twelve months.  And if you find your leaders aren’t getting it done, raise bloody stinking hell until those leaders are replaced.  And if you can’t find quality replacements, step up and lead yourself.  I’m completely convinced that your survival in this industry depends on it.

And don’t mistake this as broker bashing and jumping on the public bandwagon.  While our company does enjoy a healthy roster of lender clients, mortgage brokers still represent a majority of our business.  We have no incentive or interest in seeing brokers fail.  We would very much like to see you succeed and our involvement in your associations over the years reflects that commitment.  But the sober analysis of our balance sheet is crystal clear; lenders are thriving and brokers are dying. 

For you to survive, you must radically and immediately change the conditions on the ground, you must improve:

  • Your lobbying
  • Your messaging 
  • Your involvement

To be clear, your state and national associations are the only advocates you have right now against a tidal wave of opposition.  Without GAMB (or state equivalent) and NAMB, you are alone and you will be swept away by the coming tsunami.  You must vigorously and rigorously get involved, right now, if you want to continue to survive in this industry. 

Otherwise, in the court of public opinion, you will be weighed, you will be measured, and you will be found wanting.  You will also be out of a job.

< Flame Retardant Suit:  ON >

Comments/feedback welcome.

February 18, 2009 by · 5 Comments

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About Sherwood

Sherwood joined Top of Mind Networks in November 2004 after working seven years at Microsoft; providing rare but powerful evidence that it is possible for an individual to emerge from the collective even after full assimilation has occurred. When he is not listening to ambient, electronica, dance music or reading a scifi/fantasy novel, he loves to transform great ideas into compelling products and services.


5 Responses to “Does your mortgage association wield political clout or inspire political doubt?”
  1. Brian Brady says:

    “But the sober analysis of our balance sheet is crystal clear; lenders are thriving and brokers are dying.”

    Thriving at what, Sir? Greasing the government to bail them out?

    What is needed is LESS influence by the industry on Capitol Hill, less lobbyists, less earmarks, and less reward for poor credit decisions. What direct lenders did, to the detriment of shareholders’ equity, and at the expense of the American taxpayer is reprehensible.

    The two of the largest direct lenders: Citi and BofA decided to exit the wholesale channel because of those “bad brokers”. Today, they’re about to be nationalized. Still, they fiddle while Rome is burning.

    Purchase money consumers overwhelmingly trust an independent mortgage broker to a direct lender because they KNOW we can offer superior terms and transparent compensation.

    Pandering to the Rotarian Socialist movement is NOT a cause to which I’d hang my hat.

    Originators, neither should you.

  2. Sherwood says:

    Brian, thanks for your post.

    I understand and appreciate your point(s), although I don’t know if you will ever see LESS lobbying, that just doesn’t seem realistic or plausible.

    And while I totally agree with you on how reprehensible things are now with lenders being bailed out, and how the mortgage broker is being unfairly maligned in the media; the only thing in my mind that will change the equation for mortgage brokers is if the right legislators in the right places have the benefit of understanding the “other” side of the story.

    In terms of hanging your hat on that, no, of course not, I don’t think this is the only thing that has to happen for the world to right itself again, I just believe it is a necessary part of the bigger equation. I couldn’t possibly have fit everything I think the mortgage broker needs to do into one blog post, so I chose the most recent topic that I had just witnessed first hand.

    I believe the mortgage broker does have a message that will resonate, but from where I’m sitting, that message does not appear to be getting through loudly enough. I believe that is largely because mortgage brokers are not as involved and not driving their associations like they need to be. I recently saw proposed legislation that was essentially trying to wipe out YSP, AGAIN, for the upteenth time. Is that something mortgage brokers would be okay with? I have my doubts.

    Without strong and constant representation by mortgage broker associations, these kinds of business threatening provisions in legislation will eventually get passed to the detriment of the entire industry and purchase money consumers alike. Mortgage brokers and originators ALREADY depend on their associations to try and stop the legislative onslaught. I’m simply asking them to recognize that and to give back to the only organizations right now who have their back.

    You know, Microsoft, right before they were investigated by the Department of Justice, spent only $1.9M (1997) on lobbying efforts on Capital Hill. In 1998, when the Justice Department investigation got into full swing, they spent, $3.9M. Microsoft continued ramping up spending annually and eventually settled the lawsuit at the end of 2001. By 2003, they were steadily spending over $8.0M annually. Just last year, in 2008, they spent $9M. You may well remember the total and visceral disdain Microsoft had for lobbying and the government, even during the lawsuit. That perspective didn’t get them anywhere, except labeled as an opportunistic and monopolistic juggernaught. Today, you rarely hear anything about Microsoft’s evil empire in the news anymore and they are still a monopoly right? That, I believe, is no accident, and is a reflection of their effective lobbying efforts.

    I disagree that getting involved in the political process to make sure mortgage brokers don’t get shafted by legislation is pandering to a Rotarian Socialist movement. To the contrary, I think mortgage broker involvement would provide a forceful resistance to the very pandering to which you are referring. I also think political involvement for mortgage brokers is a necessity for them to survive (at least how they currently exist and do business today).

    If you wish to stop a socialist movement from expanding, you need free thinking, freedom loving, capitalist minded, individuals like mortgage brokers and originators to get more involved in their government and associations. I see no value in encouraging them to ignore these critical institutions.

    Just ask any Microsoft executive today if they feel that ignoring government affairs and politics in their industry is an effective and winning strategy for survival and success.

  3. Brian Brady says:

    “If you wish to stop a socialist movement from expanding, you need free thinking, freedom loving, capitalist minded, individuals like mortgage brokers and originators to get more involved in their government and associations.”

    That’s the definition of Rotarian Socialism, Mr. Lawrence; a group of business people who try to legislate their existence. Follow me here. A capitalist movement doesn’t need a trade union nor a government to condone or promote its value proposition to the consumer. If we must legislate our existence, then our existence is tenuous at best. The only permission we need is the borrower’s. Does that make sense?

    The free market works if we let it work. It is when we lobby and legislate, in favor of or to the detriment of certain groups that we lose trust with the consumer; they think the game is rigged.

  4. Interesting argument, but I don’t think it quite gets there. I don’t think what we’re looking for here is for the government to “legislate our existence”. I think what we’re looking for here is to prevent the government from “legislating us out of existence”. It’s a subtle point, but compare it to a “civil liberty”. The government can’t possibly articulate every civil liberty you are granted, but they can specifically take away certain civil liberties if they get motivated enough to do so.

    The point of having unified and strong representation is to make sure the government does not take a function away vs positively affirming a function must exist. For instance, if the broker says “We do X, Y, Z, which promotes free competition and capitalism and better prices for consumers”, then the government may say, hmm, okay, we will leave you alone. THAT is what we want. But if the government doesn’t hear the brokers voice, then the government will simply listen to the bankers and put brokers out of business or something equally disadvantageous so that being a broker doesn’t make a whole lot of financial sense.

    I also would say that having dissenting voices and views tends to slow government down, which with few exceptions, is a good thing. Having a broker voice to compete with the banker voice may have already slowed things down enough to where legislation won’t be as bad as it could have been.

  5. Jennifer says:

    I wanted to comment about what Brian typed the part below that I copied and pasted fromhis response:
    “The free market works if we let it work. It is when we lobby and legislate, in favor of or to the detriment of certain groups that we lose trust with the consumer; they think the game is rigged.”

    In regards to this statement the SAFE ACT does single out the lack of regulation for the loan officers at BANKS!!!! These guys are EXEMPT! So yes that is in favor of one very big string group. Banks are already taking the YSP from their loan officers. The banks are running their seasoned experienced loan officers away by minimzing their pay so the banks can hire uneducated unregulated employees and pay them slightly over minimum wage to complete a mortgage it will probably take over 90 days to close loans if the mortgage business becomes extinct. I have learned that only 1,500 applications at the Georgia Banking & Finance will get approved because of the credit requirement that is involved in the approval process!!!! It’s a shame too that good credit is a requirement because loan officers work on commission the ones working in 2009 struggled all year and have bad credit as a result of the economic down turn. Having good credit or bad credit doesn’t mean you are not capable of helping someone get their loan closed on time & be ethical while doing it!

    Bank have the upper hand here on this issue!!!! Before long banks will try to take over Real estate too!!!

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