Zions Bank: We Haven't Forgotten Who Keeps Us in Business

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Hurray for the red white and blue. And for those who don't know, Zions also has a majority holding in the Utah Legislature.

And on the Executive Branch level, the Utah Department of Financial Institutions (DFI) is regulated more by Zions than Zions is by the DFI. It has been that way since the late 1990's. Regarding the Bank/Credit Union disputes, when Zion's President Harris Simmmons said jump, DFI head Ed Leary (or to those of us in the business refer to him "Mrs. Simmons") said "how Hi?" on his way up. And the incompetence of Ed Leary and Utah's bought and paid for legislators resulted in all of the major Utah Credit Unions deciding to be federally chartered rather than state chartered because Simmons had succeeded in getting a bill passed which would in essence tax the large credit unions out of business. The result, Utah lost tax revenue from credit unions that previously had paid certain state taxes.

Zions Bank officials have always argued for deregulation, of them. But when they can harm competitors through the apparatus of the state, using their bought and paid for legislature, they are perfectly content with it. They are also content to get federal money to buy up failing banks in order to secure their deposits and provide some liquidity to their corporation.

For those who think that the only moochers of government dollars are the truly big national banks, don't be so naive. Even regional banks such as Zions have their eyes on federal money to bail them out of some bad decisions or to take advantage of the bad decisions of other bankers. As an observer of Zions for many years, I suspected that Harris Simmons ultimate goal was to suppress the competition and consolidate Zion's position sufficiently that he could get top dollar for a major merger with one of the big players such as Bank of America, Wells Fargo, Chase, or Washington Mutual. However, with the big boys realing, I think Zion's next strategy will be to buy up as many small struggling financial institutions as possible, with federal assistance. But I could be wrong. But don't think they will eschew federal money while also asking for as little oversight as possible from state and federal regulators.

Consolidation will give Zions Bank a good position to reap serious profits when the economy turns around. And if Zions starts showing serious losses, they are now big enough in the intermountain region to be assured that the feds will bail them out rather than let them flounder.

This is my rare post regarding financial markets in Utah. For reasons I keep close to my breast, I may remain silent for a while as events unfold in an ever-changing and volatile financial market place.