Latest / Bloomberg Intelligence / FNB Pandora's Mason, ULA's Megenhardt, on Cleveland Fed (Audio)

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FNB Pandora's Mason, ULA's Megenhardt, on Cleveland Fed (Audio) · Bloomberg Intelligence

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  Speaker 1: one point six And that's a Bloomberg Business flash. You're
• 1:26
  Speaker 1: listening to Taking Stock with Pim Box and Kathleen Mays
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  Speaker 1: on Bloomberg Radio. We are gearing up for our very
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  Speaker 1: special interview today with Loretta Mester. She is President of
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  Speaker 1: the Federal Reserve Bank of Cleveland. There's so much focus
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  Speaker 1: on FED Bank presidents, but you know, it's not just
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  Speaker 1: a president, It is a whole staff. It is many,
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  Speaker 1: many people each of the regional Fed banks. And we're
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  Speaker 1: very happy to welcome now to the show to people
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  Speaker 1: who are part of the local community, the local region,
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  Speaker 1: the collegian Cleveland FEDS District UH to talk about what
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  Speaker 1: they do, what they do with the Cleveland Fed, and
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  Speaker 1: more broadly, what they see in the regional economy, because
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  Speaker 1: certainly this is one of the aspects of what Loretta
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  Speaker 1: Mester is watching as she helps formulate and guide policy.
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  Speaker 1: Very happy. They welcome Todd Mason. He's president and CEO
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  Speaker 1: of the First National Bank of Pandora in nearbort Via, Pandora, Ohio.
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  Speaker 1: A community banker. He is on the Cleveland FED Board
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  Speaker 1: of Directors, uh Dave Meganheart, executive director at United Labor
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  Speaker 1: Agency right here in Cleveland, and on the Cleveland FEDS
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  Speaker 1: Advisory Council. Gentlemen, I welcome you both. Thank you. I'm
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  Speaker 1: sure you've been here many times. It's my first visit.
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  Speaker 1: So Todd start by telling us a little bit about
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  Speaker 1: the First National Bank of Pandora. You know, your your business,
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  Speaker 1: community you serve, and how things look to you. First
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  Speaker 1: National Bank of Pandora is a small community bank in
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  Speaker 1: northwest Ohio. We're only a hundred and fifty million in assets,
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  Speaker 1: so we are a true community bank. We have agriculture,
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  Speaker 1: small businesses, and a lot of retail business. Okay, how
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  Speaker 1: is business right now? Actually, business is improving. If we
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  Speaker 1: take a look at what's going on in our community.
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  Speaker 1: The house market is increasing, the prices are increasing, and
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  Speaker 1: a few take a look at our homes right now,
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  Speaker 1: if it's priced appropriately. Thirty days when will sell Okay? So,
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  Speaker 1: Dave Meginhart as executive director of the United Labor Agency,
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  Speaker 1: what does the United Labor Agency do? What do you do? Sure? UM,
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  Speaker 1: We're a labor based nonprofit based in Cleveland, and we
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  Speaker 1: specialize in workforce development. And we like to tell people
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  Speaker 1: that we're the emergency room of the economy because we're
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  Speaker 1: often working with companies that are closing or experiencing layoff
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  Speaker 1: or companies that are hiring. So we're sort of had
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  Speaker 1: the whole cycle, the whole life and death cycle of
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  Speaker 1: any kind of business transaction. So what we do is
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  Speaker 1: we find uh workers or human capital for those companies. UM.
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  Speaker 1: And if they you're experiencing layoff, we try to find
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  Speaker 1: your work for those workers. How how is the labor
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  Speaker 1: market doing here? Is specific clee in Cleveland. I think
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  Speaker 1: Ohio is a pretty diverse state, but in Cleveland, how
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  Speaker 1: do things look? UM? It has been It's really improved
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  Speaker 1: over the past couple of years. There's a lot of
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  Speaker 1: activity in the hospitality sector. There's a lot of manufacturing.
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  Speaker 1: There's an uptick with that. Transportation. Commercial transportation is always
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  Speaker 1: really big. UM. We have a lot of job orders
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  Speaker 1: that are coming from UM. From companies UH, goods and
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  Speaker 1: services UH and healthcare. Of course, as Toby cross Grove
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  Speaker 1: said earlier, you know that's always a driver in Cleveland. UM.
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  Speaker 1: What the people that we work with are more of
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  Speaker 1: the lower skilled workers. There's a huge demand for that.
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  Speaker 1: I think as Ohio's population is aging, there's a lot
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  Speaker 1: of health healthcare, there's a lot of state UM UH
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  Speaker 1: nursing assistance, medical assistance that cand you know what we
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  Speaker 1: look at that. We look at that for people that
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  Speaker 1: can get into a career and come up a career ladder.
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  Speaker 1: So it's a good first step for people. UM. Todd Mason,
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  Speaker 1: President and CEO, First National Bank of Pandora. How long
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  Speaker 1: have you been on the Cleveland FEDS board and what
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  Speaker 1: exactly ta listeners? What does a director do at a
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  Speaker 1: at a regional bank. I'm in my fifth year and
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  Speaker 1: we run for a three year increments on a term
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  Speaker 1: and there's two term limits. And at first at the
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  Speaker 1: Cleveland FED we have two main things that we do.
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  Speaker 1: Number One, just like any other director, we oversee the
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  Speaker 1: operations of the bank. We look at UM strategic planning,
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  Speaker 1: budgeting and all those type of items just like any
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  Speaker 1: other director. On the other side. Our second main idea,
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  Speaker 1: Our second main topic that we talk about is what's
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  Speaker 1: going out in our regional community. Each board member has
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  Speaker 1: a diverse background, different professional background, and we get that
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  Speaker 1: information because the FED is data driven and sometimes that
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  Speaker 1: data is a little bit slow to come. So all
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  Speaker 1: the directors, one of the things that we do is
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  Speaker 1: get that regional information, grab it, get it to our
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  Speaker 1: meetings and help Loretta with her monetary discussion. So do
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  Speaker 1: you have any influence over policy? You give Loretta Master
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  Speaker 1: a snapshot of what you're seeing in your business in
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  Speaker 1: your community. Are you allowed some input and will you know?
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  Speaker 1: I think if you raise the key rate that be
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  Speaker 1: pretty good. I'm a community banker. I could use a
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  Speaker 1: little more net interest margin. We are all free to
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  Speaker 1: give our opinions on what is going on in our
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  Speaker 1: regional communities and how it is impacting us. Then Loretta
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  Speaker 1: will make her decision on what she feels she should do. Okay, Well, similarly,
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  Speaker 1: Dave Megan Hurt, your executive actor, United Labor Agency. You're
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  Speaker 1: on the Cleveland Fence Advisory Council. So how does that work.
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  Speaker 1: I know there's been a lot of people and there's
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  Speaker 1: more and more focus on the fed around diversity. Do
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  Speaker 1: they pay enough attention to the community. Are they paying
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  Speaker 1: enough attention to the labor market when they consider raising
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  Speaker 1: interest rates? Again? Sure? So the Business Advisory Council we
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  Speaker 1: meet twice a year, uh and it's a you know,
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  Speaker 1: it's made up of small businesses from it could be
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  Speaker 1: anything from UH tech startups to more of established manufacturing
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  Speaker 1: businesses and people like me, which are you know, we're
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  Speaker 1: from labor. Um. We work obviously with you know again
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  Speaker 1: with people that are experiencing displacement or looking for work.
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  Speaker 1: We A'm very tight in with the local area unions. UM.
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  Speaker 1: You know, our job is to take all this information
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  Speaker 1: about what we see on the street and bring it
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  Speaker 1: to UH Loretta and also bring it to our staff.
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  Speaker 1: They listen to us, they want to they want to
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  Speaker 1: know that. I think it. I think it really helps
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  Speaker 1: to hear what we're experiencing every day. UM. I think
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  Speaker 1: they have nine of these Business Advisory councils across the
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  Speaker 1: district in all the major cities throughout Ohio, West Virginia, Pennsylvania,
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  Speaker 1: and Kentucky, parts of all those states, all of Ohio
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  Speaker 1: and parts of the other states. UM. So, I think
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  Speaker 1: that if you think about all of that information, all
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  Speaker 1: of those different businesses and labor leaders and community leaders,
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  Speaker 1: and you know you can aggregate that. I think that
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  Speaker 1: helps then bring it up into the president. Okay, well,
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  Speaker 1: uh something aside from monetary policy. The FED Reserve oversees
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  Speaker 1: lots of banks. At a regional bank, you are involved
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  Speaker 1: in exam examinations, all that kind of thing for a
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  Speaker 1: community banker though, Todd Dodd Frank. We have a lot
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  Speaker 1: of community makers on our show depending on what's in
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  Speaker 1: the news and what they're doing, and they say over
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  Speaker 1: and over it's Dodd Frank, is is put uh made
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  Speaker 1: a very heavy compliance burden. It's raised costs. Community banks
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  Speaker 1: didn't cause the Great Recession or the Great Financial crisis.
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  Speaker 1: How is it affecting you? And is this something that
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  Speaker 1: the Fed and other people oversee banks need to be
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  Speaker 1: more mindful of shoreviews and changes made in Dodd Frank
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  Speaker 1: for example, a great point, Dodd Frank. The regulators that
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  Speaker 1: are writing the rules over ten thousand pages now and
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  Speaker 1: it's not completed yet after seven years. I know in
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  Speaker 1: our small community bank, what we're seeing is we've had
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  Speaker 1: to go higher. A compliance officer, compliance consultant, yet a
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  Speaker 1: third party vendor to come check our double checkers, higher
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  Speaker 1: software and do more things. Everything that Dodd Frank touches
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  Speaker 1: in our small bank, it's now more paper, more time
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  Speaker 1: cons atarter of fact, we're doing research right now taking
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  Speaker 1: our two thousand and seven income statement compared to two
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  Speaker 1: thousand fifty, trying to say what kind of impact does
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  Speaker 1: it have. It looked like God Frank is going to
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  Speaker 1: take a brown ten percent of our net income away
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  Speaker 1: when you compare that time frame. So as a community banker, UM,
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  Speaker 1: we are not a fan of God Frank. Well, we
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  Speaker 1: know that the FED is itching two or some people.
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  Speaker 1: The FED it seemed to be itching to raise the
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  Speaker 1: key rate at least once more this year. Now, Ohio
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  Speaker 1: and this whole region in the several states that the
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  Speaker 1: Cleveland Fed encompasses a lot of manufacturing here, Starker dollar
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  Speaker 1: hurts manufacturing. Would you prefer not to see Dave Um
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  Speaker 1: the U FED make a move like this. If it
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  Speaker 1: makes the dollars Tragle will hurt you the workers here
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  Speaker 1: in this area. I think it will. I think that
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  Speaker 1: Um we're on the rebound. I think it's been a long,
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  Speaker 1: hard slog from the Great Recession. I think there's uh.
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  Speaker 1: You know, for the first time in many years, the
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  Speaker 1: poverty rate has gone down in h in Cleveland, so
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  Speaker 1: we've seen traction. And I'd hate to have anything that
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  Speaker 1: could influence jobs and productivity and profit. Well, Todd Mason,
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  Speaker 1: it may be inevitable. Whatever people want or don't want
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  Speaker 1: to see, uh, in terms of the region you serve,
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  Speaker 1: in terms of the bank, would an interest rate increase
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  Speaker 1: help you because of your profits or hurt you because
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  Speaker 1: it's going to slow down business. I think it's a
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  Speaker 1: little bigger than just profits. We have to take a
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  Speaker 1: look at our retired individuals that's in our community. They
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  Speaker 1: have had a very low rate of return for his
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  Speaker 1: long time, and with this low interest rate they're starting
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  Speaker 1: to reach out and do investments. That's probably not as wise.
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  Speaker 1: And I'm telling you that in our community there anybody
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  Speaker 1: that wants a job has a job, and our houses
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  Speaker 1: are going up and the economy is improving. We really
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  Speaker 1: in our community bank point of view, see, there's no
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  Speaker 1: reason to keep rates at a at a stressed level.
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  Speaker 1: What a trade groundtable, gentlemen, thank you so very much
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  Speaker 1: for joining us. That was Todd Mason, he's president CEO
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  Speaker 1: of the First National Bank of Pandora and p Door, Ohio.
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  Speaker 1: David Meganheart, Executive Director, Unitedly Agency in Cleveland. Davis on
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  Speaker 1: the Cleveland FEDS Advisory Council, Todds on the Border Directors
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  Speaker 1: coming up, Loretta Messer, President of the Cleveland FED. I'm
• 11:08
  Speaker 1: Kathleen his and this is Bloomberg M