CBA’s Johnson Discusses Most Pressing Issues Facing Retail Banks On “Banking with Interest”

Consumer Bankers Association (CBA) President and CEO Lindsey Johnson sat down with former journalist, IntraFi Chief Content Officer, and host of the popular banking podcast “Banking with Interest” Rob Blackwell for a candid conversation about the future of M&A, how proposals taking shape at the CFPB will affect the industry, and consumers and what steps Congress can take to ensure the CFPB operates beyond reproach.

Read excerpts from the interview below and listen to the entire “Banking with Interest” episode HERE.

On Bank M&A In the Current Regulatory Environment

“When we talk about M&A, and when we automatically shut that conversation down, you really arbitrarily force things to occur that shouldn’t occur, including banks that should probably have merged to not be able to do that. So, we really want folks to take a hard look – we’re hopeful that the conversations that have happened and some of the comments that have been made will be followed by a different posture at FDIC, the Fed, and even Treasury in terms of M&A activity.”

On Working with CFPB Director Chopra Despite Different Views

“I was thrilled to see Director Chopra at CBA LIVE, which is our annual conference. And that was at the end of March. It was just a couple weeks after the events of Silicon Valley Bank and Signature Bank. And not only did he come, which was a little bit of a late, last-minute surprise, but he stayed, he walked around our exhibit hall, he talked to bankers, he met with our board.

“We had a very good dialogue about not just the events [surrounding] the bank failures, but some of the rules that were coming down the pike: 1071, CRA, 1033 […] So I think that is a very positive sign. We want to continue to see that dialogue and [hope] that open discussion occurs so that we can share real time information back with him.

“I don’t think that it’s necessarily changing his agenda, his trajectory. But I do think that it can have an impact on 1071, for example. We really spent a lot of time focused on the implementation, and so we urged him, we urged the CFPB to work with us.”

• Dive Deeper: CFPB Director Rohit Chopra joined Johnson for a fireside chat at CBA LIVE. To read excerpts from the conversation, click HERE, and to watch a recording of the full conversation, click HERE.

On The Need for A Longer, Phased Implementation of the New Small Business Data Collection Rule

“CBA and our banks do support the intent of 1071. We’ve had significant concerns with some of the elements in this rule and the implementation of the rule itself.”

“We did actually achieve some successes coming out in the final rule, but a couple of things that we didn’t achieve were: the CFPB didn’t create a phased-in approach for 1071. We need more time to actually do it. We want to see a working group established between industry and the CFPB to really work through some of what it is going to take to implement this.”

“It’s going to be an enormous challenge for the largest institutions in the country to set up their systems to be able to go out and get this data that’s required under this rule.

“It’s going to be as Herculean of a task for the CFPB to ingest all the data from all these banks. So, we both benefit, we see the benefit when we partner together, and we have this dialogue and set up a more of a collaborative process as we implement these rules.”

• Dive deeper: To read Johnson’s statement after the CFPB issued a final Section 1071 rule in March, click HERE. To learn more about CBA’s longstanding advocacy efforts to strengthen the CFPB’s proposed implementation, click HERE. To watch a recording of an expert-led panel at CBA LIVE entitled “Mapping Out Section 1071,” click HERE.

On The CFPB’s Misguided “Junk Fee” & Deeply Flawed Credit Card Late Fee Proposal

“[This proposal is part of a much broader political campaign [that conflates] the fees that are highly regulated and are highly transparent – the fees that banks charge for lending access to credit to consumers – with Taylor Swift Ticketmaster fees. That is obscene. That is really unbelievable that you can even put the two in the same sentence.”

“And we really felt like the CFPB did not do the required analysis, the cost benefit analysis to justify how they got to $8. It not only has an impact to the cost of banks, it’s going to impact consumers. And we know this, we’ve talked to banks, we’ve looked at the analysis, and ultimately, the vast majority of borrowers, about 74 percent, even according to the CFPB, who pay their credit card bills on time, will likely see their costs go up for borrowers who pay late.

• Dive deeper: In a recent blog, CBA distilled fact from fiction, underscoring how the Bureau’s misguided proposal will have significant consequences for consumers’ long-term financial health. To learn more, click HERE.

On Congress’ Role In Ensuring the CFPB Operates Beyond Reproach

“CBA believes in a strong regulator to oversee consumer protection. We have believed in that from day one. We think that the agency should be able to operate and to issue regulation without reproach. But we don’t see that happening today. So, we want more stability. We want more transparency. And we want more oversight of the CFPB.

“Ultimately, if the Supreme Court decides that the funding structure is not constitutional, the Supreme Court has the ability to say, ‘Congress, you need to go and remedy this.’ So we are very focused on the remedy aspect of it and the reforms that may come from to instill stability, transparency, and oversight for the CFPB […] we do think there are a number of bills that actually have passed out of [House Financial Services Committee] that would do just that.”

• Dive deeper: Ahead of a House Financial Services Committee meeting to consider multiple pieces of CFPB reform legislation, CBA renewed support for proposals that will instill stability, transparency, and oversight at the CFPB. To learn more about these reforms, click HERE.