Richard's Rapid Fire - January 26, 2018

January 26, 2018

THE NEW CFPB

 

Must Read Article of The Year – Prince Harry, who? Acting CFPB Director Mick Mulvaney’s recent op-ed in the Wall Street Journal puts all this hubbub surrounding the royal wedding to shame. This is easily the must-read article of 2018, no question about it. While I would encourage you to read the full article, here are a few quick takeaways which show a complete shift in attitude at the Bureau:

 

  • On The Agency’s Philosophy: “We are government employees, and we work for the people. That means everyone: those who use credit cards and those who provide the credit; those who take out loans and those who make them; those who buy cars and those who sell them.”
  • On Enforcement: “We will focus on quantifiable and unavoidable harm to the consumer. If we find that it exists, you can count on us to pursue the appropriate remedies vigorously. If it doesn’t, we won’t go looking for excuses to bring lawsuits.”
  • On Regulation:  “It seems that the people we regulate should have the right to know what the rules are before being charged with breaking them. This means more formal rule making and less regulation by enforcement.”

 

Prepaid Rule Revised – The CFPB’s Prepaid Card Rule, which was finalized in late 2016, has been revised and its effective date delayed until April 2019. The revisions to the final rule included many CBA supported improvements, such as better protection of consumers' identities and greater flexibility to use federally protected digital wallet accounts to make every day purchases. These changes will go a long way towards ensuring consumers receive greater benefit and enhanced protections when using their prepaid cards.

 

TRENDING IN RETAIL BANKING

 

JPMorgan Chase to Add 400 Branches – You read that right! JPMorgan is boosting its branch count by nearly eight percent as it looks to expand its operations in new markets, including Washington, D.C., Boston and Philadelphia. This just goes to show banks are taking an “all of the above” approach to meeting customer needs. Digital banking will be a major part of the future of banking, but branch networks will still play a big role.

 

CBA Launches Podcast Series – We are proud to announce the launch of CBA’s new podcast series, Suite 550. These podcasts will bring listeners closer to the people behind the bank, providing them with first-hand accounts from, well, bankers. For our first episode, CBA’s Board Chairman and University of Arkansas Hall of Famer Brad Conner joins me inside Suite 550 for a candid take on retail banking. The podcasts are available via CBA’s podcast library here. You can also subscribe via iTunes here or by email or Android device here.

 

Day At The Bank: First American – CBA is glad Representative Randy Hultgren, member of the House Financial Services Committee, was able to visit with our member First American Bank this week. CBA’s Kris Fallon tells me it was a great visit, and discussion around the CFPB, tax reform, the community reinvestment act and cyber security. Thank you to First American President and former CBA Board Member John Ward for hosting!

 

REP. RANDY HULTGREN (CENTER) & FIRST AMERICAN BANK TEAM MEMBERS INCLUDING FORMER CBA BOARD CHAIR JOHN WARD (CENTER RIGHT) DURING THIS WEEK'S CBA DAY AT THE BANK VISIT.

 

REGULATOR ROUNDUP

 

Fed Governor Jay Powell Moves to the Corner Office – It is official!  Federal Reserve Governor Jerome Powell has been confirmed to serve as the next Federal Reserve Chair, succeeding Janet Yellen. We look forward to working with Chair Powell to ensure regulatory policies keep the banking industry healthy and benefit American consumers.

 

Honoring Chair Yellen – Over the years, I have met with Chair Yellen on numerous occasions and I’d like to thank her for her service and commitment to ensuring a strong and sound financial system.  Chair Yellen's term expires on February 3, 2018.

 

FDIC Nominee Testifies – President Trump’s pick to head the FDIC, Jelena McWilliams, leaped a key hurdle in her confirmation journey: testifying before the Senate Banking Committee. Ms. McWilliams, Fifth Third’s current chief legal officer and former Senate Banking Committee staffer, possesses a unique combination of policy, regulatory and banking experience, and I am confident her background and leadership abilities will be a tremendous asset to the agency.

 

Here is what you need to know from the hearing: 

  1. She believes community banks have faced major hurdles, including increased consolidation and a lack of de novo charters, as a result of increased regulations. She also stated Basel regulations and the Volcker Rule are issues she would examine for potential regulatory relief.
  2. She agrees with Former FDIC Chairman Martin Gruenberg that Industrial Loan Companies applications pose no greater safety and soundness risk than any other type of bank charter.
  3. She noted cybersecurity would be among her top priorities if confirmed.

 

We expect her to be confirmed by the Senate, and following her confirmation she would complete President Trump’s appointments of key bank regulatory leaders. 

 

Heard in the Halls (of the Fed) – The Fed’s first appointed Vice Chairman for Supervision, the central bank’s chief bank regulator, Randal Quarles is making his imprint felt quickly. As part of a new approach to bank regulation across Washington, Quarles noted, “If we have a choice between two methods of equal effectiveness in achieving a goal, we should strive to choose the one that is less burdensome for both the system and regulators.” This is a commonsense approach to policy that has been sorely needed in Washington, and I look forward to working alongside this new cohort of regulators. (Note: Quarles is currently in charge of bank supervision at the Fed, but he must be reconfirmed by the Senate by the end of January to continuing serving as a Fed Governor).

 

OCC’s Otting Scrums with Senate Dems – Responding to a letter sent by seven Senate Democrats, which said the OCC has failed to implement its recommendations from its internal review, Comptroller Joseph Otting shot back: "Had we had the opportunity to respond prior to your letter being provided to reporters and made part of press releases, I could have assured you that your 'serious concerns' were unfounded.” According to Otting, the OCC is in the process of completing its final recommendation

 

CBA LEADERSHIP SPOTLIGHT

 

Peter Kidd of Fifth Third – We are fortunate to have Peter Kidd of Fifth Third Bank leading the way as Chairman of our Auto Finance Committee, which brings auto lenders together to discuss consumer needs, emerging industry trends, best practices and regulatory changes. Peter has served on our committee for nearly a decade, and his insights are always valuable.

 

LAGNIAPPE

 

Here I Come MUFG –I am headed MUFG Union Bank to meet with former CBA Board Chair and current CBA Board Member Tim Wennes and other valued members of the CBA family.

 

Catch Me at Aquire or Be Acquired – I’ll be providing closing remarks at Acquire or Be Acquired this Sunday in Phoenix. Be sure to say hello if you see me there.