WEBVTT - FNB Pandora's Mason, ULA's Megenhardt, on Cleveland Fed (Audio)

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<v Speaker 1>one point six And that's a Bloomberg Business flash. You're

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<v Speaker 1>listening to Taking Stock with Pim Box and Kathleen Mays

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<v Speaker 1>on Bloomberg Radio. We are gearing up for our very

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<v Speaker 1>special interview today with Loretta Mester. She is President of

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<v Speaker 1>the Federal Reserve Bank of Cleveland. There's so much focus

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<v Speaker 1>on FED Bank presidents, but you know, it's not just

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<v Speaker 1>a president, It is a whole staff. It is many,

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<v Speaker 1>many people each of the regional Fed banks. And we're

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<v Speaker 1>very happy to welcome now to the show to people

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<v Speaker 1>who are part of the local community, the local region,

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<v Speaker 1>the collegian Cleveland FEDS District UH to talk about what

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<v Speaker 1>they do, what they do with the Cleveland Fed, and

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<v Speaker 1>more broadly, what they see in the regional economy, because

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<v Speaker 1>certainly this is one of the aspects of what Loretta

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<v Speaker 1>Mester is watching as she helps formulate and guide policy.

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<v Speaker 1>Very happy. They welcome Todd Mason. He's president and CEO

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<v Speaker 1>of the First National Bank of Pandora in nearbort Via, Pandora, Ohio.

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<v Speaker 1>A community banker. He is on the Cleveland FED Board

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<v Speaker 1>of Directors, uh Dave Meganheart, executive director at United Labor

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<v Speaker 1>Agency right here in Cleveland, and on the Cleveland FEDS

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<v Speaker 1>Advisory Council. Gentlemen, I welcome you both. Thank you. I'm

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<v Speaker 1>sure you've been here many times. It's my first visit.

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<v Speaker 1>So Todd start by telling us a little bit about

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<v Speaker 1>the First National Bank of Pandora. You know, your your business,

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<v Speaker 1>community you serve, and how things look to you. First

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<v Speaker 1>National Bank of Pandora is a small community bank in

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<v Speaker 1>northwest Ohio. We're only a hundred and fifty million in assets,

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<v Speaker 1>so we are a true community bank. We have agriculture,

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<v Speaker 1>small businesses, and a lot of retail business. Okay, how

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<v Speaker 1>is business right now? Actually, business is improving. If we

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<v Speaker 1>take a look at what's going on in our community.

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<v Speaker 1>The house market is increasing, the prices are increasing, and

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<v Speaker 1>a few take a look at our homes right now,

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<v Speaker 1>if it's priced appropriately. Thirty days when will sell Okay? So,

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<v Speaker 1>Dave Meginhart as executive director of the United Labor Agency,

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<v Speaker 1>what does the United Labor Agency do? What do you do? Sure? UM,

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<v Speaker 1>We're a labor based nonprofit based in Cleveland, and we

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<v Speaker 1>specialize in workforce development. And we like to tell people

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<v Speaker 1>that we're the emergency room of the economy because we're

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<v Speaker 1>often working with companies that are closing or experiencing layoff

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<v Speaker 1>or companies that are hiring. So we're sort of had

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<v Speaker 1>the whole cycle, the whole life and death cycle of

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<v Speaker 1>any kind of business transaction. So what we do is

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<v Speaker 1>we find uh workers or human capital for those companies. UM.

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<v Speaker 1>And if they you're experiencing layoff, we try to find

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<v Speaker 1>your work for those workers. How how is the labor

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<v Speaker 1>market doing here? Is specific clee in Cleveland. I think

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<v Speaker 1>Ohio is a pretty diverse state, but in Cleveland, how

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<v Speaker 1>do things look? UM? It has been It's really improved

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<v Speaker 1>over the past couple of years. There's a lot of

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<v Speaker 1>activity in the hospitality sector. There's a lot of manufacturing.

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<v Speaker 1>There's an uptick with that. Transportation. Commercial transportation is always

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<v Speaker 1>really big. UM. We have a lot of job orders

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<v Speaker 1>that are coming from UM. From companies UH, goods and

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<v Speaker 1>services UH and healthcare. Of course, as Toby cross Grove

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<v Speaker 1>said earlier, you know that's always a driver in Cleveland. UM.

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<v Speaker 1>What the people that we work with are more of

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<v Speaker 1>the lower skilled workers. There's a huge demand for that.

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<v Speaker 1>I think as Ohio's population is aging, there's a lot

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<v Speaker 1>of health healthcare, there's a lot of state UM UH

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<v Speaker 1>nursing assistance, medical assistance that cand you know what we

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<v Speaker 1>look at that. We look at that for people that

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<v Speaker 1>can get into a career and come up a career ladder.

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<v Speaker 1>So it's a good first step for people. UM. Todd Mason,

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<v Speaker 1>President and CEO, First National Bank of Pandora. How long

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<v Speaker 1>have you been on the Cleveland FEDS board and what

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<v Speaker 1>exactly ta listeners? What does a director do at a

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<v Speaker 1>at a regional bank. I'm in my fifth year and

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<v Speaker 1>we run for a three year increments on a term

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<v Speaker 1>and there's two term limits. And at first at the

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<v Speaker 1>Cleveland FED we have two main things that we do.

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<v Speaker 1>Number One, just like any other director, we oversee the

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<v Speaker 1>operations of the bank. We look at UM strategic planning,

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<v Speaker 1>budgeting and all those type of items just like any

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<v Speaker 1>other director. On the other side. Our second main idea,

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<v Speaker 1>Our second main topic that we talk about is what's

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<v Speaker 1>going out in our regional community. Each board member has

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<v Speaker 1>a diverse background, different professional background, and we get that

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<v Speaker 1>information because the FED is data driven and sometimes that

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<v Speaker 1>data is a little bit slow to come. So all

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<v Speaker 1>the directors, one of the things that we do is

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<v Speaker 1>get that regional information, grab it, get it to our

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<v Speaker 1>meetings and help Loretta with her monetary discussion. So do

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<v Speaker 1>you have any influence over policy? You give Loretta Master

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<v Speaker 1>a snapshot of what you're seeing in your business in

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<v Speaker 1>your community. Are you allowed some input and will you know?

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<v Speaker 1>I think if you raise the key rate that be

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<v Speaker 1>pretty good. I'm a community banker. I could use a

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<v Speaker 1>little more net interest margin. We are all free to

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<v Speaker 1>give our opinions on what is going on in our

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<v Speaker 1>regional communities and how it is impacting us. Then Loretta

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<v Speaker 1>will make her decision on what she feels she should do. Okay, Well, similarly,

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<v Speaker 1>Dave Megan Hurt, your executive actor, United Labor Agency. You're

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<v Speaker 1>on the Cleveland Fence Advisory Council. So how does that work.

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<v Speaker 1>I know there's been a lot of people and there's

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<v Speaker 1>more and more focus on the fed around diversity. Do

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<v Speaker 1>they pay enough attention to the community. Are they paying

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<v Speaker 1>enough attention to the labor market when they consider raising

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<v Speaker 1>interest rates? Again? Sure? So the Business Advisory Council we

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<v Speaker 1>meet twice a year, uh and it's a you know,

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<v Speaker 1>it's made up of small businesses from it could be

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<v Speaker 1>anything from UH tech startups to more of established manufacturing

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<v Speaker 1>businesses and people like me, which are you know, we're

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<v Speaker 1>from labor. Um. We work obviously with you know again

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<v Speaker 1>with people that are experiencing displacement or looking for work.

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<v Speaker 1>We A'm very tight in with the local area unions. UM.

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<v Speaker 1>You know, our job is to take all this information

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<v Speaker 1>about what we see on the street and bring it

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<v Speaker 1>to UH Loretta and also bring it to our staff.

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<v Speaker 1>They listen to us, they want to they want to

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<v Speaker 1>know that. I think it. I think it really helps

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<v Speaker 1>to hear what we're experiencing every day. UM. I think

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<v Speaker 1>they have nine of these Business Advisory councils across the

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<v Speaker 1>district in all the major cities throughout Ohio, West Virginia, Pennsylvania,

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<v Speaker 1>and Kentucky, parts of all those states, all of Ohio

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<v Speaker 1>and parts of the other states. UM. So, I think

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<v Speaker 1>that if you think about all of that information, all

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<v Speaker 1>of those different businesses and labor leaders and community leaders,

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<v Speaker 1>and you know you can aggregate that. I think that

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<v Speaker 1>helps then bring it up into the president. Okay, well,

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<v Speaker 1>uh something aside from monetary policy. The FED Reserve oversees

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<v Speaker 1>lots of banks. At a regional bank, you are involved

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<v Speaker 1>in exam examinations, all that kind of thing for a

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<v Speaker 1>community banker though, Todd Dodd Frank. We have a lot

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<v Speaker 1>of community makers on our show depending on what's in

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<v Speaker 1>the news and what they're doing, and they say over

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<v Speaker 1>and over it's Dodd Frank, is is put uh made

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<v Speaker 1>a very heavy compliance burden. It's raised costs. Community banks

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<v Speaker 1>didn't cause the Great Recession or the Great Financial crisis.

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<v Speaker 1>How is it affecting you? And is this something that

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<v Speaker 1>the Fed and other people oversee banks need to be

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<v Speaker 1>more mindful of shoreviews and changes made in Dodd Frank

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<v Speaker 1>for example, a great point, Dodd Frank. The regulators that

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<v Speaker 1>are writing the rules over ten thousand pages now and

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<v Speaker 1>it's not completed yet after seven years. I know in

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<v Speaker 1>our small community bank, what we're seeing is we've had

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<v Speaker 1>to go higher. A compliance officer, compliance consultant, yet a

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<v Speaker 1>third party vendor to come check our double checkers, higher

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<v Speaker 1>software and do more things. Everything that Dodd Frank touches

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<v Speaker 1>in our small bank, it's now more paper, more time

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<v Speaker 1>cons atarter of fact, we're doing research right now taking

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<v Speaker 1>our two thousand and seven income statement compared to two

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<v Speaker 1>thousand fifty, trying to say what kind of impact does

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<v Speaker 1>it have. It looked like God Frank is going to

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<v Speaker 1>take a brown ten percent of our net income away

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<v Speaker 1>when you compare that time frame. So as a community banker, UM,

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<v Speaker 1>we are not a fan of God Frank. Well, we

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<v Speaker 1>know that the FED is itching two or some people.

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<v Speaker 1>The FED it seemed to be itching to raise the

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<v Speaker 1>key rate at least once more this year. Now, Ohio

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<v Speaker 1>and this whole region in the several states that the

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<v Speaker 1>Cleveland Fed encompasses a lot of manufacturing here, Starker dollar

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<v Speaker 1>hurts manufacturing. Would you prefer not to see Dave Um

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<v Speaker 1>the U FED make a move like this. If it

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<v Speaker 1>makes the dollars Tragle will hurt you the workers here

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<v Speaker 1>in this area. I think it will. I think that

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<v Speaker 1>Um we're on the rebound. I think it's been a long,

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<v Speaker 1>hard slog from the Great Recession. I think there's uh.

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<v Speaker 1>You know, for the first time in many years, the

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<v Speaker 1>poverty rate has gone down in h in Cleveland, so

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<v Speaker 1>we've seen traction. And I'd hate to have anything that

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<v Speaker 1>could influence jobs and productivity and profit. Well, Todd Mason,

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<v Speaker 1>it may be inevitable. Whatever people want or don't want

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<v Speaker 1>to see, uh, in terms of the region you serve,

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<v Speaker 1>in terms of the bank, would an interest rate increase

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<v Speaker 1>help you because of your profits or hurt you because

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<v Speaker 1>it's going to slow down business. I think it's a

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<v Speaker 1>little bigger than just profits. We have to take a

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<v Speaker 1>look at our retired individuals that's in our community. They

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<v Speaker 1>have had a very low rate of return for his

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<v Speaker 1>long time, and with this low interest rate they're starting

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<v Speaker 1>to reach out and do investments. That's probably not as wise.

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<v Speaker 1>And I'm telling you that in our community there anybody

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<v Speaker 1>that wants a job has a job, and our houses

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<v Speaker 1>are going up and the economy is improving. We really

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<v Speaker 1>in our community bank point of view, see, there's no

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<v Speaker 1>reason to keep rates at a at a stressed level.

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<v Speaker 1>What a trade groundtable, gentlemen, thank you so very much

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<v Speaker 1>for joining us. That was Todd Mason, he's president CEO

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<v Speaker 1>of the First National Bank of Pandora and p Door, Ohio.

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<v Speaker 1>David Meganheart, Executive Director, Unitedly Agency in Cleveland. Davis on

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<v Speaker 1>the Cleveland FEDS Advisory Council, Todds on the Border Directors

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<v Speaker 1>coming up, Loretta Messer, President of the Cleveland FED. I'm

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<v Speaker 1>Kathleen his and this is Bloomberg M