When U.S. Rep. Roger Williams (R-Weatherford) convened a hearing of the House Committee on Small Business on the topic of "From Nothing to Something: The Story of the American Dream,” the person he invited to testify was Zan Prince, chairman of the board of First Bank Texas.
Prince, whose office is in Willow Park, provided her remarks on Feb 28 before the small business committee for Chairman Williams and other members.
“First Bank Texas is a family-owned community bank, the fulfillment of the American dream of Joe Sharp, a man with a strong foundation of hard work and an entrepreneurial spirit from West Texas dry land cotton farmer roots,” Prince told the committee. “He was the product of strong faith, family values, and a public education that prepared him to reason, to figure stuff out in business and life. He often said that the impossible just took a little longer.”
Prince’s testimony was in the context of Williams’ desire to “learn more about the current state of small business from the people who know it best: our country’s entrepreneurs,” as he said in his opening remarks.
Prince described how regulations have impacted her banking company since it was established in 1982.
“In 1982, bank documents were simple,” she said. “Over time, we’ve added layers of ‘consumer protection’ that has done little to improve the understanding of accounts or transactions for our customers. Fiscal and regulatory policy are important.”
She referred to the proposed rule by the Consumer Financial Protection Bureau that would require covered financial institutions to collect and report to the Bureau data on applications for credit for small businesses, including those that are owned by women or minorities.
“The proposed CFPB rule 1071 to collect small business loan data to ensure “fair” access to credit by all small business owners misrepresents the lending market,” Prince said. “There are no two small businesses that are alike. There’s no standardized small business box of circumstances that resembles consumer mortgages or car loans. If enacted, the process for lending to small businesses will be bogged down in technicalities that ignore creative, entrepreneurial plans to establish or grow a business.”
Prince said there are plenty of laws on the books to hold people accountable. “yet every crisis brings more laws and rules that good people follow, and others still ignore.”
“The 2008 response to the financial crisis is a textbook example that should have focused on the cause, big banks, but instead, imposed costly regulations for community banks,” she added. “Regulations designed to make ‘Too big to Fail’ banks accountable result in needless regulation of community banks that aren’t and weren’t part of the problem. Those layers of additional requirements come at a cost to the end user of bank products and the bank’s shareholders.”
Prince expanded her thoughts in comments to The Community News:
“Take out the character, take out the vision, take out the enthusiasm, the entrepreneurial piece of small business and gather information just like it's a one to four family, and it's just not— so there's this disconnect with regulators and with with real world on Main Street,” she said. “They have a proposed rule that is just not effective for small business Main Street. Our organization has worked person-to-person with the same people that we see at high school games, or at church or the grocery store and it’s a partnership. We know our customers, we know our communities, we know the things that might be most successful in our communities. And we just don't think it's appropriate for regulators to say it needs to be a certain price with certain terms, all the same, because no small businesses are the same.”
Prince said she got more questions from Republicans than Democrats, including a lot of questions about access to credit and community involvement.
“When it's all said and done the community bank is a sponsor on the high school school scoreboard. The community bank goes to the junior livestock auctions. The community bank is a sponsor on the education foundation or the volunteer fire department and and it's important that we don't leave our communities in a place that they don't have the stability and the access to those people who are really their partners,” she said.
Prince provided her own “nothing to something” story about her local bank.
Her father, Joe Sharp, took his family and a group of investors to Baird, Texas, to start a bank in 1982. That small bank grew to a banking organization that today has a billion dollars in assets and 14 locations.
Sharp graduated from Munday High School in 1955 in a class of 25 students. He went on to Hardin Simmons and then graduated from what was then North Texas State University.
“What he took was the ability to reason and the grit to make a difference and to work through whatever the process was,” Prince said. “He was kind of funny, he always said that the impossible just takes longer. With that mindset and a foundation of ethics and and commitment to work, it was very successful for him and and our family. He went with a foundation of faith and family and a commitment to hard work in an entrepreneurial spirit, and we did that person-to-person, building relationships.”
In response to the recent collapse of Silicon Valley Bank, Prince said “it's important that you have somebody that you know, somebody that knows you. I give my cell number to customers, I'm more than available and willing to talk to them about their issues, their visions, their dreams. Our bank, since 1982, has weathered all kinds of storms hand-in-hand with customers who found themselves in situations that weren't right and, you know, for the most part, we work really hard to work them through that — not just discount the character and the commitment to work to make things all come out right in the end.”
Another “nothing to something” story during the hearing was the testimony of Drew Davis, a 17-year-old entrepreneur from Hillsboro, Missouri.
Prince recalled that Davis, who has cerebral palsy, said he turned in a paper to his business teacher about a business he would do, and the straight-A student got a grade of 82 on the paper, being told by the instructor that it wouldn’t work.
“So it goes back to the ability to not take no, and to work, and have the spirit,” Prince said. “That young man has Crippling Hot Sauce today.”
Crippling Hot Sauce has sold more than 16,000 bottles and is in 90 different retailers across Missouri.
Davis is a constituent of Blaine Luetkemeyer, U.S. Representative for Missouri's 3rd District. Luetkemeyer said Davis’ accomplishment is impressive for a 17-year-old.
“Even more impressive is that Drew has accomplished this while living with cerebral palsy,” Luetkemeyer said. “He named his company ‘Crippling Hot Sauce, to show he is not letting his disability slow him down or hinder his sense of humor. In fact he is using his company to help support the nearly 800,000 Americans living with cerebral palsy today by committing five percent of his proceeds to cerebral palsy research.”
Another witness was Roy Heim, founder and owner of Heim Construction Co. in Orwigsburg, Pennsylvania.
Both Heim and Prince spoke of the cost of compliance with federal regulations.
“We spend an enormous amount of time and money to stay compliant, employing 15 full-time employees in our office who work countless hours to ensure we remain in compliance with the forever-changing regulations,” Heim told the committee. “Many of these laws and regulations, while well intended, make it much more difficult, if not impossible, for small business to comply, complete, and survive, let alone profit.”
In response to a question from Congressman Aaron Bean of Florida, Prince said “Every day, the regulatory requirement increases, or the interpretation of a regulatory requirement is ever-changing.”
Prince said back when her bank started, regulatory compliance probably took part of the time of one employee.
“Today, it’s at least six full-time employees,” she said.
Prince closed out her testimony highlighting two local businesswomen: Sherry Waters and Debra Smith.
“Both ladies have built their businesses on hard work, an entrepreneurial spirit, integrity, and excellence that makes our community great. Both ladies have been very involved in support of our non-profits, schools, candidates for elected office, and our elected officials,” Prince said. “Community banks provide 77% of agricultural loans and over 50% of small business loans. We provide the community partnerships that preserve local schools, charities, and businesses that make our communities thrive. Without community banks and small businesses, who fills the gap? Who makes a difference in our community? Who provides that which is unique to who we are today? I encourage you to continue to focus on an environment that creates opportunities for those small businesses and community banks.”
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