Richard's Rapid Fire - February 8, 2019


Obviously the big news this week is the merger of BB&T and SunTrust. Knowing both Kelly King and Bill Rogers for years, I recount many of my conversations with them separately. At last year’s CBA Executive Banking School, Kelly stated BB&T would not buy an out of market bank, and would rather buy a larger bank than a smaller bank because of compliance. And Bill told me he was not going to buy a bank, just for the sake of buying a bank. And, how ironic that I was in Charlotte on Monday, home of the new HQ, and Atlanta to see SunTrust the day of the announcement. I know many of you wish that I don’t visit your bank anytime soon to jinx it. There was one key metric that stood out to me: Efficiency expectation. Can SunTrust (61.6%) and BB&T (60%) meet the predicted 51% efficiency ratio? Their overlapping branch footprint certainly allows for a head start!


Remembering John F. Stewart: As some of you may have heard, John F. Stewart (2009 CBA Board Chair, Membership Team member at Flushing Financial and 25 year Citi veteran) passed away Tuesday. He was an inspiring leader who left a lasting impression on everyone fortunate enough to have met him.


During his tenure as CBA’s Board Chairman, he provided a steady hand and set the course through the 2008 financial crisis. John’s accomplishments are great – West Point graduate, Army Captain, philanthropist and businessman – but the thing that truly set him apart was he did it all with a smile.


The entire CBA family’s thoughts, prayers and condolences are with John’s family, friends and coworkers.


I asked Gene Kirby (2010 CBA Board Chair) to share some of his thoughts of John:


I’m struggling today to understand why the good ones tend to leave us too early. John Stewart was one of the most inspiring leaders I ever met. I worked side by side with him on the CBA Board and also served with John on the Admin Committee when we conducted the CEO search and hired Richard Hunt. John was an incredible leader with a quick wit and he was a loyal supporter of the CBA. His sense of humor kept me laughing and I’ll always remember how he provided support and guidance to me when I moved into the CBA Chairman’s seat. If you’ve seen some of the comments posted on LinkedIn about John’s passing, you’ll get a sense for how he impacted so many people. The one post that summed it up for me is the following one: “As wonderful and inspiring a leader as he was, he was a better human being.”


John F. Stewart - way too young to leave this world, but this world is a better place because he lived in it.

John Stewart at CBA Executive Banking School. 

Cajun ThoughtsCHICK-FIL-A #1 POLITENESS Recently at the Charlotte airport, I stood 53rdin line at the Chick-fil-A. Granted, I could have easily visited many other restaurants, but that never really crossed my mind. It also occurred to me nobody in front of me was complaining one bit about the line, nor were the people who ended up behind me. Let’s be honest, while the food at Chick-fil-A is good, it is not great. The reason Chick-fil-A resonates with customers is the experience. Customers have come to expect fast, courteous service in an affordable way. I was blown away by the pleasantries of the consumer facing employees once again. [There were several “thank you for coming” and “please”]. Upon leaving later that day, I noticed there were 20 people at the Chick-fil-A restaurant. Again, no one seemed to mind. And, yes, I do translate that to bank branches. Do people enjoy the experience at your branch? … CFPB SMALL-DOLLAR RULE By now you have seen the CFPB released their small-dollar lending rule and it is a great first step. No longer will a bank have to underwrite a $500 loan the same way as a $500,000 mortgage. It was an absurd rule that hurt many Americans from receiving credit. There is still work to be done as the CFPB retains the Cordray provision which created two different sets of consumer protection rules depending on bank size. There should be one set of rules for consumers, not multiple, for the same product. Can you imagine if Advil had different FDA protections at CVS than at Ellie’s Drug Store? … SHUTDOWN D-DAY APPROACHING T-minus 7 days until the next possible partial shutdown. I peg it right now at 70% there will not be another partial shutdown, trending downward.




What's the #1 decision your bank has to make NOW? From talent to innovation to the battle for deposits, there's no shortage of areas jockeying for your attention... and your resources. How will you decide?


Don't miss the Monday general session of CBA LIVE 2019 where you'll experience a no-holds-barred debate by top experts on key retail banking issues, including deposits, technology, talent, branches and security.


Register today to be part of CBA LIVE 2019: The Currency of Now taking place April 1-3, 2019 at the Gaylord National Harbor.




CBA Education Funding Committee: CBA's Education Funding Committee was in D.C. this week to meet with new members of the House Education and Labor Committee as well as theSenate HELP Committee to discuss the benefits of private student loans, advocate for a ‘Know Before You Owe’ policy and solutions to prevent over borrowing federal student loans. Our members serve as the primary industry voice for private student loan lenders.

Our meeting with Senator Mike Braun (From left to right): Gary SchleugerBose Washington PartnersHarrison WadsworthBose Washington PartnersTim Morrison, Sallie MaeSen. Mike BraunKelly ChristianoSallie MaeMark Smith, SunTrust.

Congressional Update: Everyone is keeping an eye on the calendar as the short-term funding resolution passed a few weeks ago to end the partial government shutdown expires next Friday, February 15, 2019. Absent an agreement on immigration reform, there could be another shutdown or President Trump could declare a state of emergency along the border, allowing him to unilaterally redirect funds to construct a barrier (wall, steel slats, etc.) along the southern border.


CFPB Releases Revisions to Payday Rule: The CFPB released Wednesday two notices of proposed rulemaking related to its 2017 final rule governing “Payday, Vehicle Title, and Certain High-Cost Installment Loans.”


According to the Bureau, the proposal would “rescind the rule’s requirements that lenders make certain underwriting determinations before issuing payday, single-payment vehicle title, and longer-term balloon payment loans. The Bureau is preliminarily finding that rescinding this requirement would increase consumer access to credit … The Bureau’s proposal suggests there was insufficient evidence and legal support for the mandatory underwriting provisions in the 2017 final rule. Additionally, the Bureau is concerned that these provisions would reduce access to credit and competition in states that have determined that it is in their residents’ interests to be able to use such products, subject to state-law limitations. The NPRM proposing to rescind the mandatory underwriting requirement is open to public comment for 90 days.”


In the second proposal, the Bureau proposed delay the current August 19, 2019, compliance date for the underwriting provision of the rule until November 2020. This rule is open for a 30 day comment period.


The underwriting NPRM is available here and the compliance delay is available here.


CBA will hold a special membership call for members of the Deposits & Payments Committee interested in this issue. For more information, please contact David Pommerehn.


CBA’s full statement is available here.


Upcoming House Financial Services Committee Hearings: Chairwoman Maxine Waters (D-Calif.) released a hearing schedule including sessions around marijuana business banking, financial services diversity, sanctions, homelessness and more.


The hearing to discuss a legislative solution to marijuana business banking problems is the first of its kind. The problem: federal law bans the sale of marijuana, even where recreational marijuana use is permitted, so banks are faced with the dilemma of serving cannabis clients. I am hopeful this will add momentum to resolving the challenges.


Below are session dates and topics:


  • A full committee hearing Feb. 12 on “The Use of Sanctions and Economic Statecraft in Addressing U.S. National Security and Foreign Policy Challenges.”
  • A full committee hearing Feb. 13 on “Homelessness in America: Examining the Crisis and Solutions to End Homelessness.”
  • A subcommittee hearing Feb. 13 on “Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses.”
  • A subcommittee hearing Feb. 14 on “The Affordable Housing Crisis in Rural America: Assessing the Federal Response.”
  • A full committee hearing Feb. 26 on "Holding Credit Bureaus Accountable and Repairing a Broken System."
  • A full committee hearing Feb. 27 on “Monetary Policy and the State of the Economy” with Federal Reserve Chairman Jerome Powell.
  • A subcommittee hearing Feb. 27 on “Diversity Trends in the Financial Services Industry.”



BB&T, SunTrust Banks Announce Merger Plans: BB&T and SunTrust Banks on Thursday announced plans to combine in “Merger of Equals” deal to create the sixth-largest retail bank in the U.S. BB&T CEO Kelly King will serve as CEO until September 12, 2020, at which pointSunTrust CEO Bill Rogers will take over.


Former CBA Board Member Clarke Starnes of BB&T will serve as Chief Risk Officer with current CBA Board Members Ellen Koebler of SunTrust will serve as Deputy Chief Risk Officer of the new bank. Other CBA Board Member Brant Standridge of BB&T will serve as Co-Head of Retail with SunTrust CFO Allison Dukes.


A new name for the bank has not yet been announced. Stay tuned and check out local news coverage from Atlanta, Charlotte and Winston-Salem sources below:



JPMorgan’s Sommers Retires, Gindi New CAO: Former CBA board member Barry Sommers will retire from his chief executive role at JPMorgan Chase’s where he was responsible for traditional private bankers, bank branch-based retail brokers and its group of traditional brokers at JPMorgan securities. Prior to his wealth management leadership,Sommers was CEO of Chase’s consumer banking division for three-and-a-half years. 20-yearJPMorgan veteran and current head of client advice and strategy in the wealth unit David Frame will succeed Sommers following his impending departure.


Current CBA board member Sol Gindi was named chief administrative officer for the bank’s global wealth management unit, a role he has served in for JPMorgan Chase’s consumer bank.


Learn more about JPMorgan Chase’s wealth management division changes here.


Harland Clarke Names Jana Schmidt CEO, Promotes Dan Singleton: Great CBA premier sponsor Harland Clarke promoted president Jana Miller Schmidt to CEO. Schmidt has been president since November 2017 and was previously president of the company’s intelligent solutions division. Previous COO Dan Singleton was also promoted to CEO Valssis & COOHarland Clarke Holdings. Congratulations to both Jana and Dana on this exciting news.




Welcome Andre' Cotten to the CBA Team: Big welcome to our newest Regulatory CounselAndre' Cotten! Monday was his first day on the CBA Team. Andre' comes with a longtime background in the financial regulatory sphere and direct experience with financial institutions. Andre’ passed the customary first day “CBA Knowledge” test with an A+. We are so excited to have him here.






Our State of the Week is NEW MEXICO, where more than 1 out of every 3 residents banks with a CBA member! CBA members in New Mexico hold $26 Billion in total assets, employ 7,000 people, provide $600 Million in small business loans and serve 800,000 customers. Check out our state by state numbers here.