Richard's Rapid Fire - February 12, 2016

Small-Dollar Lending Gets Presidential Attention

Earlier this week, President Obama released his final budget proposal which included a $10 million dollar line-item that would fund a small-dollar loan program through Community Development Financial Institutions.  President Obama is right to recognize low-and moderate-income American families often need access to short-term liquidity.  But here is the problem:  Our own government, namely the OCC and FDIC, essentially eliminated a very popular bank product which helped countless working families make ends meet. The result has been extremely costly to consumers who now pay much higher rates through the payday and other nonbank industries.


Members of CBA's Default Management Committee met with the CFPB in Washington this week to discuss first party collections.


Speaking of Payday and Other Nonbank Industries…

New York Governor Andrew Cuomo on Wednesday asked federal regulators to block KeyCorp’s proposed buyout of First Niagara Financial Group, Inc.  One of Gov. Cuomo’s chief concerns is the deal will “likely push consumers to rely on nonbank alternatives, such as payday loans and check-cashing, which come with higher consumer transaction costs.”  As noted above, Cuomo should be taking his concerns to the OCC and FDIC, rather than meddling with regulator’s upcoming decisions.  Politicians apparently do not understand we are in a new era of consolidation.  Given that he is from New York, Gov. Cuomo should know better.


We All Have a Story to Tell

Banking continues to be in the crosshairs of this presidential election, and it is time we start setting the record straight.  The over-the-top, divisive rhetoric about the banking industry is troubling and simply ignores the facts.  Whether it’s buying a home, financing an education or starting a small business, the reality is our member banks partner with consumers each and every day to help them achieve their dreams.  Banks employ millions of people, provide billions in small business loans, and work one-on-one to extend trillions in consumer loans.  Given all they are doing to help Americans reach their financial goals, maybe the curtain should finally fall on this melodramatic rhetoric being hurled at banks.  Our industry is night and day different than pre-2008.


One way to combat this rhetoric is to go on offense.  If you haven’t read this piece in The Plain Dealer, please do.  It provides a fantastic look at some of our member banks’ efforts to better their communities.  


It’s a Miracle:  New York Times, Washington Post Agree Breaking Up Banks is Not the Answer

This may surprise you coming from me, but the New York Times and Washington Post hit the nail on the head when pointing out that breaking up the banks is not necessary.  Today, banks are far better capitalized and possess much improved leverage ratios.  In short, the banks today are not the banks of 2008.  To me, the calls to break up the banks are more like hollow rhetoric than productive policymaking.


Are Subprime Auto Loans the Next “Big Short?”

Some investors seem to think they have found the next “Big Short.”  Citing loose loan terms and rising delinquency rates, a group of hedge fund managers believe the “mushrooming” auto loan space is ripe for betting against.   Per the report, many banks are not interested in making this bet. 


CBA LIVE 2016: #WhatsYourWord on Leadership

T-minus 23 days to CBA LIVE 2016!  We’re counting the days until Phoenix and members of Team CBA are sharing what leadership means to them in one word.  For me, leadership is authentic.   Join the conversation on Twitter and tell us what leadership means to you by including #WhatsYourWord in your post.  Not on Twitter?  Email your photo here.  If you have not registered for CBA LIVE 2016, there is still time.  Visit for the full details. 


Steve Zeisel, CBA Executive Vice President & General Counsel


CBA Marketing and Communications Manager Angie Berkey



Disrupters in Higher Education: Do Students Deserve a Netflix?

Traditional college education could be in for a rude awakening as a nonprofit group is examining ways to slash the cost of higher education by focusing on the needs of students, the Washington Post reported this week. The organization plans to give its stamp of approval to unconventional and often cheaper education programs that provide students with quality jobs and income prospects, while cutting excessive programs and costs. The four-year college experience could end up yielding to more affordable, education-focused and student-driven higher education alternatives.


Three Things to Know to Be In the Know

Walt Bettinger of Charles Schwab: You’ve Got to Open Up to Move Up

Expect No Love From Your Bank On Valentine's Day – Just More Outrageous Fees

Janet Yellen: Market turmoil and dollar could hurt economy




Congratulations to Kim Graham on being named Bank of North Carolina’s Senior Vice President and Director Of Community Relations.


On Thursday, Team CBA gathered to talk about quarterly member bank earnings reports.