Richard's Rapid Fire - October 6, 2017

CFPB Final Small-Dollar Rule Falls Short For Consumers

The CFPB’s long-awaited small-dollar rule is finally here, and you guessed it! The Bureau whiffed at an opportunity to provide assistance to the millions of Americans experiencing financial hardship. It is hard to believe just days after the CFPB reported more than four in ten Americans were struggling to pay monthly bills – often because of unexpected or emergency expenses – the Bureau would drive Americans to pawnshops, offshore lenders, high-cost installment lenders and fly-by-night entities. The CFPB should have worked with other regulatory agencies to examine the use of small-dollar lending programs, such as deposit advance products, so Americans can receive short-term, emergency loans from their banks. As those in the banking industry know, these products come at lower costs and with more protections than payday loans from other lenders.



Retail Banking’s Senior Leaders Attend CBA LIVE

Hot out of the gate, dozens of bankers have already registered for CBA LIVE 2018: Beyond the Bank. Each year, retail banking’s senior leaders gather at CBA LIVE to learn from industry experts, explore innovative technologies and network with their peers. Join us March 12-14 in Orlando and be sure to register today to take advantage of our early bird rates. 


CFPB Examiners Fast Tracked Through Commissioning Program, Inspector General Reports

Reporting by the CFPB’s Office of Inspector General (OIG) found the agency fast tracked employees through their examiner commissioning program. Since its implementation in 2014, the Bureau has held the program’s importance and necessity to its overall mission. Yet, according to the OIG, the Bureau did not take the proper measures to ensure their examiners were ready for prime time. The Bureau has said they plan to act on about “one-third” of the OIG’s recommended fixes, but this is a development worth monitoring going forward.



Yahoo Report: Three Million Hacked, Notified Four Years Later 

Count ‘em: Three billion. Once thought to be only one billion accounts, Yahoo recently disclosed each of their 3 billion accounts were hacked – a fact they made public 4 years after the 2013 hack. In the wake of these revelations, as well as the Equifax hack, the importance of protecting consumers’ sensitive financial and personal data should be top-of-mind for Washington policymakers. Over the years, banks have worked tirelessly to ensure their cybersecurity programs meet the highest of standards. Their work has not gone unnoticed by consumers with 63 percent of Americans trusting banks to safeguard their private information better than the federal government, credit reporting agencies or other companies, according to a recent Morning Consult poll. Congress should take note and pass comprehensive data security legislation to increase data security standards for all stakeholders, across all industries.



Speaking of Data Security…

The CFPB’s inspector general alerted the agency that they are at risk of potential hacks and they must work to strengthen their cybersecurity protections. Given the prevalence of high-profile hacks and the CFPB’s practice of gathering sensitive information from consumers and financial institutions, this report should raise concerns in Washington.



OCC Releases FY18 Supervision Operating Plan

The OCC's Committee on Bank Supervision released its Operating Plan for 2018, which outlines it supervisory strategies for the fiscal year. The objectives are used by the agency to develop individual operating-unit plans and risk-focused supervisory strategies for the institutions they oversee. This year’s areas of focus include:

  • Cybersecurity and operational resiliency;
  • Commercial and retail credit loan underwriting, concentration risk management, and the allowance for loan and lease losses;
  • Business model sustainability and viability and strategy changes;
  • BSA/AML compliance management; and
  • Change management to address new regulatory requirements.



Former CBA Board Chair Mary Navarro Receives Lifetime Achievement Award

Team CBA, along with members of our Board of Directors and membership, were in New York for American Banker’s annual Most Powerful Women in Banking event this week. It was wonderful  to see former CBA Board Chair, and longtime Board Member, Mary Navarro of Huntington Bank honored with a “Lifetime Achievement Award.” But no award can really do justice to the work Mary and the other CBA members honored last night do for their customers and our industry. From what my team tells me, everyone at the event had a blast.

Former CBA Board Chair Mary Navarro with current CBA Board Chairman Brad Conner of Citizens Bank at American Banker’s Most Powerful Women in Banking celebration in New York City.


Equifax, Wells CEOs Testify on Capitol Hill

Former Equifax CEO Richard Smith and current Wells Fargo CEO Timothy Sloan were on Capitol Hill this week. In his opening remarks before the Senate Banking Committee, Mr. Sloan focused on the cultural and business changes Wells Fargo has undergone in the last year, including hiring back more than 1,000 workers who left or were wrongly fired. He also stressed that one of his most important responsibilities is to make sure Wells Fargo is financially sound for its employees, customers and shareholders.  As for former Equifax CEO Richard Smith, he was quite busy this week testifying before the Senate Banking Committee, House Energy and Commerce Committee and the House Financial Services Committee. Additionally, a Senate judiciary Subcommittee held a hearing on the Equifax hack as well.


You may read CBA’s summaries of those hearings here:

Senate Banking Committee/Senate Judiciary Subcommittee

House Energy and Commerce Committee

House Financial Services Committee



Quarles Confirmed For Fed Board, Otting Next

In bipartisan fashion, the Senate confirmed Randal Quarles, an investment manager and former Treasury official, to be a Member of the Fed’s Board of Governors by a vote of 65-32. During his confirmation hearing, Quarles noted the need for regulatory reform – a position we agree with. From time to time, all rules and regulations must be revisited and modernized. We look forward to working with Mr. Quarles to advance the needs of consumers and small businesses. Next up, Joseph Otting, a former banker, is slated to be voted on as OCC Comptroller.


Membership Spotlight: Technology and Putting Consumers First - U.S. Bank’s Jim Welsh Enters the Conversation

Banking is undergoing a fundamental transformation.  Bankers know this; consumers know this; and, Washington better start paying closer attention. Technology is changing the way consumers’ bank. The industry is no longer defined by brick and mortar, but a more inclusive approach to banking which includes mobile and digital technologies. U.S. Banks new Head of Retail Banking Jim Welshunderstands these points crystal clear, noting his focus will be on using technology to make consumers’ lives easier. Jim offers a stripped down view of the consumer experience, technologies influence on banking, and more in a Q&A with American Banker. Be sure to read his take on banking’s pressing issues here.


CBA Community Reinvestment and Small Business Banking Committees Join Team CBA in D.C.

CBA’s fall committee in-person meetings continued this week as our Community Reinvestment and Small Business Banking Committees visited D.C. Here are a few of our top takeaways and market observations:

  • In regions affected by recent hurricanes, many banks are offering 90-day payment deferrals and waiving fees to help customers; additionally constructions loans are starting to increase in the aftermath of the hurricanes;
  • Bank deposits continue to be strong and credit quality is still high; and
  • There are concerns raised regarding how natural disasters are treated by examiners during their meeting with the regulators.

Thank you Jim Matthews of Capital One for your dedicated service to CBA and the Community Reinvestment Committee. At the meeting, Jim was succeeded by Sue Whitson of BMO Harris Bank as Chair of the Community Reinvestment Committee and Yvonne Blumenthal of U.S. Bank was named Vice-Chair of the Committee.


Thanks to the rest of the attending Community Reinvestment Committee Members for such a robust discussion, including Reza Aghamirzadeh of Citizens Financial, Jan Bergeson of Ally, Lloyd Brown of Citigroup, Morris Churchill of HSBC, Ronna Cottom of Woodforest, Doug Craycraft of Chase, Christina Cudney of United, Brad Dossinger of M&T, Joy Hoffman of Bank of the West, Amy Howcroft of PNC, Angela Hudson of Bank of the Ozarks, Sharon Jeffries-Jones of BB&T, Cathy Niederberger of PNC, Donna Normandin of Frost, Ruth Owen of Everbank, Karl Renney of Eastern Bank, Gwen Robinson of Santander, Kathleen Robison of TD Bank, Doug Schaeffer of Woodforest, Tish Secrest of Bank of America, Alan Urie of Synchrony, and Paul Vicente of Fifth Third; and thank you all attending Small Business Banking Committee members, including Committee Chair Gail Gandy of Wells Fargo, Chip Knight of Hancock Whitney, John Kenefick of KeyBank, Matt Dickson of Bank of the West, Amir Madjlessi of Santander, Michael MacIntyre  of HSBC, Katherine Van Broklin of Citi, Sean Simpson of Synovus, Richard Foster of Frost, Craig Sievertsen of Banner Bank, Michelle Grace of Chase, Jack Murphy of Citizens, Ken Connell of Huntington, Kala Gibson of Fifth Third, Tony King of IBERIABANK, Kris Puskar of Eastern Bank, George Buchanan of Regions and Dan Hoke of U.S. Bank.


Thank you to Tim BurnistonHeather Czermark, & Britt Faircloth of Wolters Kluwer, Rick EbreyLaRhesa Moon and Rick Claypoole of Harland Clarke, Joe Proto of Transactis, and Vonda Eanes of the OCC, Patience Singleton of the FDIC, and Theresa Stark of the Fed for meeting with our committees.

CBA's Community Reinvestment Committee was in Washington, D.C. this week for its fall in-person meeting.


Rick Ebrey of Harland Clarke offers a presentation to CBA's Small Business Banking Committee during its in-person meeting this week in Washington, D.C.


Three Things to Know to be in The Know

CFPB imposes new curbs on payday lenders

OCC’s Noreika Resumes Attack on CFPB’s Arbitration Rule

Trump Interviews Jerome Powell for Fed Chairman Job





Santander Consumer named three individuals to new executive positions, including Juan Carlos Alvarez de Soto as CFO, Richard Morrin as President of Chrysler Capital, and Sandra Broderick as Executive President and Head of Operations.