Richard's Rapid Fire - July 6, 2018

No Rest for the Weary with Bureau’s Comment Letters – CBA’s legal team was busy this week working with members to put the final touches on the Bureau of Consumer Financial Protection’s latest RFI. We submitted comments on the Bureau’s Guidance & Implementation process this Monday and focused on two main goals: first, ensuring the guidance process is transparent and, second, making sure guidance does not inappropriately circumvent appropriate rulemaking. You can read more about our comments here.
Mark Your Calendars – Just a reminder, the Senate Banking Committee has scheduled Kathy Kraninger’s confirmation hearing for Thursday, July 19, 2018. She is President Trump’s nomination to serve as the Bureau’s full-time director. 
A Little White House Gossip –It is widely assumed current White House chief of staff General John Kelly will leave the Administration at some point this summer. If that happens, the rumor mill says Current OMB Director and Acting BCFP Director Mick Mulvaney is a leading candidate for the job. Should President Trump tap Mulvaney as the new White House chief of staff, there are three likely scenarios for what would happen to the Bureau’s leadership:
  • Trump could use the Vacancies Reform Act to pick someone who has already been confirmed by the Senate to serve as the acting director. This is what he did when appointing Mulvaney. Potential picks could be Comptroller Otting, FDIC Chair McWillians or Treasury Secretary Mnuchin – just to name a few.
  • If the Senate goes into recess, Trump could make a recess appointment of his nominee Kathy Kraninger to serve as acting director while the Senate considers her confirmation. President Obama recess appointed former-Director Richard Cordray, who was later confirmed by the Senate. 
  • While the least likely option, Trump could pick Mulvaney as his new chief of staff without naming a replacement. This would elevate Deputy Director Leandra English to acting director.
Of course, this is all purely watercooler gossip. It is possible Trump could name someone else as his new chief of staff, leaving Mulvaney heading both the Bureau and OMB until Kraninger is confirmed.
American Banker has more here.
Is the Empire State Going a Mile High? – Conflicting state and federal laws have forced many banks to decide taking legal money from marijuana-related businesses just is not worth the risk. This week, however, New York Governor Andrew Cuomo released a statement clarifying the New York Department of Financial Services would not impose regulatory action on state-charted financial institutions for “establishing banking relationships” with regulated medical marijuana or industrial hemp businesses. 
Square Still Hip to Banking But Not Sure When – A few weeks back, OCC Comptroller Otting said fintech companies the OCC had spoken with about receiving a bank charter high-tailed it for the door when they realized the extra regulatory scrutiny banks undergo. Just yesterday Square confirmed it had withdrawn its application for deposit insurance. 
While Square is not giving up, the company plans to make some changes before resubmitting an application with the FDIC. Square’s ILC application in Utah is still pending. 
A Square spokesperson said, “We have been engaged in constructive dialogue with the FDIC, and our decision to withdraw and refile was a procedural step in the review process that will allow us to amend and strengthen some areas of our FDIC insurance application.” Square did not address which areas needed to be strengthened. 
I still believe banks are well positioned and, if fintechs decide to enter the banking space, it will only show how prepared leading banks are for the competition. We do, however, continue to stress with regulators rules must apply evenly across the board. Financial institutions need a level playing field and consumers deserve the same safeguards whether they are making deposits with an ILC, fintech or bank. 
Banks Reexamine Workforce Needs – The author of a recent report from Novantas told American Banker “banks should adopt skills from other industries to improve their sales approaches.” And banks are doing just that as branches change from transaction centers to hubs for advice or information.
New CBA Board Member Pierre Habis, head of consumer banking with MUFG Union and president of the bank’s new unit PurePoint Financial, said while MUFG recruits employees with more traditional banking experience PurePoint looks for employees with a service or hospitality background. This follows the PurePoint Promise of offering top-notch service in a streamlined business model to help customers save money. Pierre said he views this new model as a disruptor in the industry – in short, he says, “We have disrupted ourselves.”
Putting It All Together – Banks obviously have to have great teams, cutting edge technology and offer customers services and products before the customer even knows he or she might want it. But, so much of banking is about maintaining your brand and reputation. Huntington Bank uses the tagline “Welcome” to, as Forbes noted, help a top-25 bank keep its hometown feel. In Forbes’first-ever ranking of top banks by state, Huntington received honors in “six states, including first in Indiana, Michigan and Wisconsin.”
The survey also noted Capital One joined Huntington in being the only two banks to take top honors in more than three states.
CBA Board Member and head of Huntington’s consumer and business banking Andy Harmening sums it all up: “When you marry the people, the products and start to put technology in the mix, I’m pretty excited what the next three to five years hold for our company.”
Finding that right mix is crucial, but at Huntington it has paid dividends with profits doubling since 2013 and stocks more than doubling in the last five years. 


John Jordan and His Talented Committee – As a founding member of the recently formed Talent Management Committee, John Jordan has played a critical role in establishing the committee’s mission and goals. John is Managing Director, Head of Consumer Academy and Advisor Development for Bank of America and has been on the Bank of America team since 2003. John brings a wealth of knowledge in the client experience, product and segment analytics as well as sales and strategy within wealth management.  
When John is not contributing to his team’s success at Bank of America or working with the Talent Management Committee, he is busy with his family and rooting on his Auburn Tigers (or are they the War Eagles?)


Cliff McCauley Appointed to Finance Commission – Talk about recognizing talent when you see it. Texas Governor Greg Abbott recently appointed CBA Government Relations Council member Cliff McCauley, senior executive vice president with Frost Bank, to serve on the state’s Finance Commission. The commission oversees the banking, savings and loan, and consumer credit agencies. Congratulations Cliff! I know you will make Frost and CBA proud.
Chris Furlow Takes Helm at Texas Bankers Association – My good friend Chris Furlow officially took the reins of the Texas Bankers Association this week. Chris has worked on Capitol Hill, served as a Deputy Assistant Secretary of Commerce and was appointed Executive Director of the Homeland Security Advisory Council. He graduated from Louisiana State University – making him simply a Cajun as opposed to a Ragin’ Cajun from my alma mater University of Louisiana at Lafayette. Either way, I am happy to welcome Chris, on behalf of CBA, to the TBA. 
Just remember, there is only one true @cajunbanker.
Happy Anniversary! – I hope everyone had a fantastic Independence Day and took some time to reflect on the blessings we have. Last week I mentioned CBA Team Member Danni Lu’s father becoming an American citizen and this week I wanted to celebrate another big day. CBA Team Member Mitslal Girmay, who is in our accounting department, became a U.S. citizen five years ago Monday. Happy anniversary Mitslal and thanks for your continued contributions to CBA. We have a great, diverse team here and I am proud of the work they do on behalf of our members every day.


(L-R) CBA Board members Bob Kottler of IBERIABANK and Michael Cleary of Santander met up for a little July 4 fun in Bristol, RI, home to America's oldest Independence Day parade.