Richard's Rapid Fire - May 12, 2017

CBA Committee Chair Todd Hollander of Union Bank Testifies on Small Business Lending

Seventy percent of the small business loans are made by banks with $1 billion or more in assets. With the CFPB launching a formal inquiry into the small-business lending landscape, we stand with the Bureau in its endeavor to better understand the small business lending market. However, we urge the Bureau to proceed cautiously when developing rules for Section 1071 of Dodd-Frank. This provision would place considerable and unnecessary burdens on small businesses and lenders, producing a negative effect for all involved and the greater economy. We were happy to have CBA’s Small Business Banking Committee Chairman Todd Hollander of Union Bank at the CFPB’s field hearing in Los Angeles to bring attention to this issue.

CBA Small Business Banking Committee Chairman Todd Hollander (Center Left) of Union Bank speaking at the CFPB's field hearing in Los Angeles.

 

CBA Meets with the Treasury Department

This week, CBA Board Member and Chair-elect Brad Conner of Citizens Bank, Mark Erhardt of Fifth Third, Gail Gandy of Wells Fargo, Jim Matthews of Capital One, and Rich Porrello of Huntington joined the CBA Team in D.C. for a meeting with the Treasury Department. We visited with high-level Treasury officials to discuss regulatory overlap, the community reinvestment act, and small business, small-dollar, and indirect auto lending. We look forward to continuing to offer our expertise to executive branches, and to help chart a path forward, which benefits both banks and consumers.

(L to R) Rich Porrello of Huntington, Jim Matthews of Capital One, Gail Gandy of Wells Fargo, Mark Erhardt of Fifth Third, and CBA Chair-elect Brad Conner of Citizens Bank before their visit to the Treasury Department.

 

Large Banks Cover the Default Risk of Smaller Banks

For those who caught the news on First NBC Bank’s failure, did you notice how much it cost the FDIC? The cost to the agency’s deposit insurance fund was estimated at a whopping $1 billion. The reality is, the premiums paid by our nation’s largest banks overwhelmingly cover the default risks of smaller-asset banks. With the largest banks in the U.S. holding more than half of our deposits, it’s understandable they would pay more than half of the total premiums paid into the FDIC’s deposit insurance fund. If anything, this solidifies the argument in favor of a robust banking industry. Breaking up the big banks, as some like to champion, would only hurt the nation, not help it.

 

Drought in Retail Deposits Looming?

According to a report released by JPMorgan Chase, banks with $50 billion in assets or less may face significant obstacles in obtaining retail deposits, which are needed for loan growth, due to the shrinking of the Federal Reserve’s balance sheet. The report calls for these institutions to begin merging to be able to weather a potential drought in retail deposits. On the other hand, the report notes large banks are well equipped to ride out the storm due to their investments in customer acquisition, branding, and technology.

 

CBA Executive Banking School: Taking Employees Out of Their Silos

Our freshman class is filling up for CBA Executive Banking School. Each summer, the banking industry’s rising stars make a trip to Furman University in South Carolina to learn how to successfully navigate the complexities of the retail banking industry. From retail strategy, to financial strategy, to the overall bank management strategy, students leave our banking school with a holistic understanding of how a retail bank operates. Learn more about the school by watching this short video, and be sure to apply for this year’s freshman cohort today. Our application deadline is Monday, May 15, 2017.

 

CBA’s Internal Audit Working Group Visits CBA HQ

Always glad to welcome CBA’s Internal Audit Working Group to Washington, D.C. This week, the group met at CBA HQ to discuss emerging risks, customer complaints, data visualization, and top challenges. We’re looking forward to seeing more of our members over the next few months for in-person meetings.

Great to see Committee Chairman Dan VanSciver of Sallie Mae, Jon Bruner of Ally, Jeremy Harlow of American Express, Michelle Winter of BB&T, Michael Nesler of Discover, Janine Pappas of EverBank, Harry Farver of Huntington, Julie Dennis of Chase, Christian Trudell of KeyBank, Joe Sullivan of M&T, Frank Caruso of PNC, Jim Madias of Synchrony Financial, Michael Pagan of TD, Steve Hizak of United Bank, Jason Seeger of U.S. Bank, Mark Weintraub of Wells Fargo, and Kara Williams and Naomi Reiss of Webster Bank.

Thank you to Paul Sanford of the CFPB, and Monica DeBellis, Reema Singh, and Michael Thor of Protiviti for speaking with our working group  

Paul Sanford, Assistant Director for Supervision Examinations at the CFPB, met this week with CBA's Internal Audit Working Group in Washington, D.C.

 

Three Things to Know to Be in the Know

SoFi plans to apply for a bank charter in the next month

Consumer Watchdog to Look Into Small Businesses’ Access to Loans

Federal Student Loans Just Got More Expensive

 

Lagniappe

CBA member San Antonio Federal Credit Union has officially changed their name to Credit Human Federal Credit Union.

Meredith Verdone was named chief marketing officer for Bank of America.

Congratulations to Tracy Hixson of Fifth Third Bank and Jason Warden of Bank of America for winning CBA’s CBA LIVE survey contest.

 

CBA's OnSite Education Team was in Pittsburgh this week teaching MarketSim to 30 PNC employees.