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Academic Challenge Leads to Senate Recommendation

A team of Lundquist College students has directly influenced five U.S. Senators and the Senate Banking Committee—and the American Bankers Association and the Federal Home Loan Bank.

Seniors Olivia M. Forrester (finance), Jane Low (finance), Carson Hansen (finance), Angus Folmli (finance), and Deiahdeen Alhjaj (operations and business analytics), representing the college’s Commercial Banking course, made another outstanding submission to the FDIC Academic Challenge in November. This isn’t the first time a Lundquist College team has excelled at the relatively new competition. Last year’s team was a national finalist.

The Academic Challenge is a two-round competition aimed at increasing understanding of the banking industry and the FDIC’s role in it through engaging undergraduate students in dialogue about banking trends and policies. Students answer a question using a dataset, data codebook, and public data sources and present problem solving solutions to significant issues or risks, recommending specific actions to the FDIC.

In December, faculty advisor Roger Busse was notified by bankers that the submission and its research were so compelling that it was circulated in Washington D.C. and would be used by research teams in developing a senate memorandum.

“Our research and submission have had an important impact,” said Busse, James F. and Shirley J. Rippey Professor of Practice at the Lundquist College. “Five U.S. senators have issued a memorandum that incorporates parts of the students’ paper and its research and calls for action by the Federal Housing Finance Agency (FHFA) in Washington D.C., which mirrors our recommendations to the FDIC. Clearly the paper’s findings and recommendations—which were reviewed by Senator Tester’s office—have garnered the full support of these additional important senators.”

The memorandum is issued from U.S. Senators Jerry Moran, Tammy Duckworth, Bill Haggerty, John Tester, and Tim Scott, addressed to Sandra Thompson, director of the Federal Housing Finance Agency (FHFA), entitled “Preserve Community Bank Access to Federal Home Loan Bank Advances.”

“This letter calls for the FHFA to issue an immediate ‘interim financial rule that would modernize the Federal Housing Finance Agency regulatory capital standards and align them with the primary regulators,’” Busse explained. “The memorandum was directly influenced by the Lundquist College of Business FDIC National Academic Challenge submission, ‘The Impact of Inflation on Banks’ Accumulated Other Comprehensive Loss (AOCL), Access to Liquidity, and the Systemic Risk to Community Banking in an Emerging Recession,’ and its research.”

Said Busse, “Our students’ good work is making a difference and is helping to actually solve a potential systemic risk to the commercial and community banking system that could be significantly detrimental, not only to the affected banks but to the thousands of communities they serve during a severe financial crisis.”

—AnneMarie Knepper-Sjoblom ’05, Lundquist College Communications