Richard's Rapid Fire - June 1, 2018

My Visit to Huntington Bank – I always enjoy visiting with CBA members and this week I had the pleasure to meet with the folks at Huntington Bank. First and foremost, they are a great group of bankers who work tirelessly on behalf of their customers. We had a lively discussion on the regulatory environment, small-dollar rulemaking, M&A activity and bank innovation. I was glad CBA Board Member Andy Harmening and a host of CBA Committee Members and CBA Executive Banking School students and alums were able to join. What a great turnout.


Waiting on OCC – In the days ahead, an Advanced Notice of Proposed Rulemaking (ANPR) on the CRA is expected to be issued from the OCC and it may be done in coordination with the FDIC and Fed.
The Three “D’s” at the OCC: Digital, Downgrades and Delays – As we await the ANPR, the OCC continues to undergo a transformation under its new leadership. Below are three areas I believe will see the biggest changes:
  • Digital – As consumers become more digitally savvy, regulators and banks must work together to tailor the Community Reinvestment Act (CRA) to meet the needs of 21st Century borrowers. We expect the upcoming ANPR from the OCC to take this into account.
  • Downgrades – Former Acting OCC Comptroller Keith Noreika addressed this issue in a meaningful way during his tenure by revising the agency’s exam policy. Speaking on CRA downgrades, Noreika noted they “should be supported by strong evidence of quantitatively and qualitatively material instances of discriminatory or illegal credit practices directly related to CRA lending activities that have resulted in material harm to customers.”
  • Delays – Under recent leadership, CRA exams are moving at a much quicker pace than in the past. I am hoping the OCC can get to a point where they are able to complete an exam in 6 months or at the least complete one exam before they start another at the same bank.
RFI Process: Greater Transparency Needed at Bureau – Without question, informed, transparent governing is the best way to produce policy that is good for both banks and consumers. Previously, the Bureau of Consumer Financial Protection has not always adhered to such an approach and has pursued a seemingly predetermined political agenda to unilaterally shape the public message. In our recent comment letter to the Bureau on external engagements, we made our views clear: Greater transparency and openness at the Bureau is needed and would serve the agency well.
CBA’s Doppler Radar – Keeping our finger to the Washington winds, we expect President Trump to name a permanent Bureau Director by June 22, 2018. As we have mentioned before – but it is worthwhile to keep top-of-mind – if an official nomination is made by June 22, 2018, Acting Director Mick Mulvaney can continue to serve until the nominee is confirmed.
Mulvaney Lifts Hold on Data Collection – Nearly six month ago, Acting Director Mulvaney halted the agency’s collection of personally identifiable information due to potential data security concerns. This week, he lifted the hold after an “exhaustive review” which found the agency’s systems are well-secured.
Change of Tune at Education Department – Will private student lenders finally get a fair shake on the Education Department’s Federal Student Aid (FSA) website? If FSA official Wayne Johnson’s comments are any indication, it sure looks like it.  In a recent speech, he noted FSA “might move to assist private student lenders in building awareness amongst student populations that are unserved by federal loans.” Today, 98 percent of private student loans are being repaid. Private lenders have been serving their borrowers well and consumers can benefit from these types of loans. I wrote Dr. Johnson to say thank you for working to ensure students know all their options.

Bureau Advocates for Small-Dollar Rule Delay – The Bureau requested a stay of litigation on a lawsuit challenging its small-dollar rule. The request is based upon the Bureau’s decision to reconsider the original rule. The agency also moved to delay the rule’s compliance date until 445 days after the final judgment of the litigation.

Big Banks Lead the Way on Technology – Big banks, such as Citigroup and JPMorgan Chase, are investing heavily in technology and innovation. This does not come as much of a surprise as banks have been laser focused on boosting their mobile, online and overall digital presence to meet growing consumer demands. In a recent report by Tom Brown, CEO of Second Curve Capital, he highlights how 57 percent of millennials would change their bank for a better tech platform and 65 percent of clients would consider leaving a firm if digital channels are not integrated. For those with an eye on the future, investment in technology is an essential move and big banks are leading the way.
Will Regulatory Relief Lead to More M&A? – Given the new SIFI threshold of $250 billion, compared to the old $50 billion threshold, M&A activity is sure to pick up. As mid-sized banks look to increase their efficiency, M&A could be a way to improve profitability. There was a great piece in the American Banker – in fact it was one of my must reads this week – discussing this potential trend. If you have a moment, I would encourage you to read it.
Speaking of M&A… – CBA member Rockland Trust Company has acquired Milford National, a fellow Massachusetts-based bank. The deal is expected to close in the 4th quarter of this year. Additionally, Citizens Financial Group purchased Tennessee-based Franklin American Mortgage, along with their $41 billion mortgage servicing portfolio.


CBA Education Funding Committee Chair John Vidovich – In addition to chairing one of our most active committees, John is the Vice President of Business Development with Discover Financial. He was an active member of the committee prior to his time as chairman and has been an active member in the banking industry for even longer. Shortly after graduating from Alfred University in New York, John got his start in student lending at Sallie Mae, where he worked for nearly a decade, before joining another CBA member, Citi. He was with Citi for 11 years prior to joining Discover when they acquired Citi’s student loan portfolio. John and his wife live in Clifton, Va., with their two sons – so his background in student loans is coming in handy.


CBA Talent Management Committee Leadership – Jenny Rhodes of PNC will serve as Vice Chair on our newly formed Talent Management Committee.
Lisa Frazier – Wells Fargo hired Lisa Frazier to head its innovation group.
The Fallon Family – CBA is excited to welcome our newest family member to the world, Thomas Maxwell Fallon. Thomas is second son for CBA’s VP of Congressional Affairs Kris Fallon and her husband Mike. He is also Liam Fallon’s little brother. We are very happy for the entire Fallon clan!
Thomas Maxwell Fallon