View from CBA - January 9, 2015

January 9, 2015

CBA LIVE 2015 – Early Bird Registration Ends Today!

Reminder – your opportunity to save $300 on CBA LIVE ends today so be sure to register. You also should take a moment and make your hotel reservation. We have reserved blocks of rooms at both the Hilton Bonnet Creek and the Waldorf Astoria – the meeting space for CBA LIVE is in the middle and connected to both hotels so you may stay at either place. We are in Orlando, FL this year so join us and escape the cold!
 
CBA Adds to Congressional Affairs Team

CBA has been laying the groundwork to provide our membership with an Advocacy Team to fully represent our interests with Members of Congress and regulatory agencies. I am happy to report we are well on our way to completing this goal just in time for the start of the 114th Congress this week. Specifically, we have added three new team members under Senior Vice President for Congressional Affairs Reagan Anderson, including:

  • Kristen Fallon | Vice President, Congressional Affairs. Kristen joins CBA from the office of Sen. Jeff Flake (R-AZ) where she served as Legislative Assistant focusing on issues related to the federal budget, taxes, and financial regulation. She has also served as Legislative Aide to Sen. Mike Johanns (R-NE), a member of the Senate Banking Committee, and Sen. John Warner (R-VA). She holds a B.A. in economics and political science from James Madison University and a M.B.A. from Columbia Business School.
  • Tiffany Haas | Vice President, Congressional Affairs. Prior to becoming a member of the CBA team, Tiffany served as Legislative Counsel & Communications Director for Congressman Donald Payne, Jr. (D-NJ). She advised the Congressman on tax and budget issues, as well as legislation and policy related to the Dodd-Frank Act and the CFPB. In addition, she was a Communications Advisor for the Democratic National Committee working on President Barack Obama's reelection campaign. Tiffany earned a B.A. in political science from George Washington University and a J.D. from Marquette University Law School.
  • Anna Bartlett Wright | Government Relations Coordinator. Anna Bartlett comes to CBA from the House Financial Services Committee where she served as Operations Manager under Chairman Jeb Hensarling (R-TX). Prior she served then Committee Chairman Spencer Bachus (R-AL) as Operations Manager, Executive Assistant and Staff Assistant. A native of Alabama, she holds a B.A. in communications and information science from the University of Alabama.

We will also be adding to our Regulatory Team as well in the very near future.

The (Real) Bank of America

POLITICO Magazine has an interesting long-read out this month looking at the "Real" Bank of America, or the more than $3 trillion in loans currently on the books of the U.S. Government. The vast majority of which are loans to about 8 million homeowners and 40 million students, but also includes special interests such as farmers, fisherman, clean energy firms, and even foreign nations. Most fascinating is the entity overseeing this vast portfolio consists of just four mid-level employees of the Office of Management and Budget with no lending experience. In addition, accounting and collections practices used by the government show they often collect pennies on the dollar in recouping loans. Just think -- what would happen if banks ran their business this way?
 
FCC vs CFPB on Complaint Portals

Another government agency is rolling out a complaint database, this time it is the Federal Communications Commission (FCC). Specifically, they are making it simpler for consumers to file and track complaints against telephone, cable, internet, and radio companies. The FCC takes a very different track with its database, where complaint information is ONLY released by trends and does not indicate the company, isolate the individual complaint, or contain a narrative. Compare this with the CFPB which releases far more information than the FCC or the Federal Trade Commission. In addition to the CFPB's increased data collection, their consumer portal lists individualized complaints and has filtering options including ways to search for a particular financial institution.
 
I find the FCC's complaint portal much better for both consumers and the industry. This is something the CFPB should consider when making updates to their system in the future.
 
Easy Credit or Easy Assumptions?

Mark Fogarty, Editor-at-Large for National Mortgage News, took a look at mortgage loans over the last decade based on race and found denials to whites (the largest racial category) were an even higher percentage of the total a decade ago than they are now. This is further corroborated by a 10-year study of originations by ComplianceTech, which shows caucasians were denied mortgages at an 18.7 percent rate in 2004, which is higher than the 17.3 percent rate in 2013. Meanwhile, denials of applications for African-Americans remained the same pre and post-crash at 31.9 percent and denials for Hispanic and Asian-Americans remained largely the same over the entire time frame.
 
Remember, the Financial Crisis Inquiry Commission did not issue its report on the financial crisis until after Dodd-Frank had already been passed. So Congress did not review the findings of the commission it created to tell them what exactly went wrong. The report's dissenters found the crisis was caused by government affordable housing programs, not market forces. This data is insightful as we look back at lending standards and evaluate what "easy credit" really meant, and how Dodd-Frank has impacted consumers in the time since.
 
CBA and AOL Finance Optimism Index Rises 3.1 Points in November

The CBA/AOL monthly Finance Optimism Index rose to -2.2 in November, gaining from October and showing rising consumer financial optimism as the holiday season began. Americans' optimism about their personal financial future remained relatively stable with a one point increase. Worry about current financial situation decreased 4 points, with those who strongly agree they are worried about their current financial situation remaining at 26 percent of respondents. While the Index did rise in November, consumers still are not feeling optimistic regarding their financial future. Until this Index rises to positive territory, I do not see a robust retail industry.
 
Associate Member News

Former CBA Board Chair Gene Kirby's new company, CE Solutions Group, has joined CBA as our sixth new associate member for FY 2015.
 
Lagniappe

Jorge Junquera, Vice Chairman and Special Assistant to the Chief Executive at Popular Inc., will retire on February 5, 2015 after 43 years with the bank.
 
The Federal Reserve Board has reappointed O.B. Grayson Hall Jr., Chairman and Chief Executive at Regions Financial, to its Federal Advisory Council.
 
President Barack Obama has nominated former Bank of Hawaii Chief Executive Allan Landon for a seat on the Federal Reserve Board. Landon served as CEO and Chairman at the Bank of Hawaii from 2004 to 2010.
 
Tony Alexis has been appointed the Enforcement Director of the CFPB. He had previously been the Enforcement Director in an acting capacity. Alexis joined the Bureau in February 2012 as a Deputy Assistant Director for Enforcement Field Litigation. He previously worked in the Civil Fraud section of the Justice Department as a trial attorney before spending 13 years as an Assistant U.S. Attorney and as a Partner at law firm Mayer Brown.