Richard's Rapid Fire - June 14, 2019

We love having CBA’s Board of Directors in town!


On Tuesday, CBA Board Members met with the FBI to talk all things fraud, cybersecurity and money laundering issues then met with members of the Senate Banking and House Financial Services committees. On Wednesday, we held our general business discussion board meeting at CBA HQ.


More details and information below!



CBA Board Meets with FBI, Congressional Members:  Nearly the entire CBA Board of Directors met this week at CBA World Headquarters in Washington, D.C. this week and our agenda was nothing short of jam packed! Board Members who attended include Todd Barnhartof PNCMike Aust of ComericaRyan Bailey of Bank of the WestRoss Carey of U.S. Bank,Todd Chamberlain of SunTrustReggie Chambers of JPMorgan ChaseChristine Channelsof Bank of AmericaMichael Cleary of SantanderDennis Devine of KeyBankJohn Durrant of Capital OnePierre Habis of MUFG UnionAndy Harmening of Huntington,Michelle Lee of Wells FargoQuincy Miller of Eastern BankScott Peters of Regions andTim Spence of Fifth Third Bank.


We kicked off the visit at the FBI Headquarters with a presentation on fraud and financial crimes from James Barnacle (UC) and a group of Supervising Special Agents filled with discussion ranging from cybersecurity to money laundering issues. The Board then met with Senate Banking Committee members Sens. Doug Jones (D-Ala.)Tina Smith (D-Minn.)Tim Scott (R-S.C.)David Perdue (R-GA) in addition to House Financial Services Committee membersReps. Ben McAdams (D-Utah)Vicente Gonzalez (D-Texas)Josh Gottheimer (D-NJ),Denny Heck (D-Wash.).


On Wednesday, our Board of Directors gathered at CBA HQ to discuss all things retail banking including human trafficking and funding, the digital competitive landscape, the state of small business lending, small dollar lending among other hot button issues.

We are excited to announce Ernie Johannson, Group Head of U.S. Personal and Business Banking, BMO Harris Bank will be joining CBA’s Board of Directors. Here are a few other changes to our councils:
  • CBA Board Member Pierre Habis with MUFG Union will join both our Government Relations Council and Education Council; and,
  • CBA Board Member Quincy Miller with Eastern Bank will join our Education Council.
  • Frank E. Loveridge, VP and Director of Corporate Physical Security at Fifth Third Bank, spoke to the Board on lessons learned in branch security protocols.
  • Tom Brooks, Head of Regional Accounts, and former CBA Team Member Pace Bradshaw, Deputy Head of U.S. Government Relations, with CBA premier sponsor Visa, spoke to the Board of Directors on trends in key digital issues including e-commerce, fraud and consumer experience.
  • CBA Team Member Jae Schroeder, VP, Director, Executive Banking School and Paul Leventhal, Chair of the Faculty Advisory Committee and Creator of BankCom presented to the Board of Directors an Executive Banking School and OnSite Education update.
Cajun Thoughts: BB&T/SUNTRUST IS NOW TRUIST The big, exciting news of the week is of course the announcement of the BB&T-SunTrust combined bank name of Truist Financial. The new name, which signifies the legacies of both banks, will be added to the banks’ almost 3,000 branches as well as to sports facilities sponsored by the banks when the $28.2 billion merger closes. On a side note, there is a bank in my hometown of Jennings, LA called…The Bank …  BIPARTISAN AML EFFORTS A group of Senators are sponsoring draft bipartisan legislation to strengthen anti-money laundering laws. One provision in the draft, similar to the House legislation that passed, would require companies to file information about beneficial ownership to FinCEN. CBA continues to advocate for this issue and recently wrote both the House and Senate encouraging a comprehensive, federal database of this information … CFPB DIRECTOR KRANINGER’S MISSION Director Kathy Kraninger emphasized this week her commitment to education, regulation, supervision and enforcement at the CFPB. She also said any discussion about changing the agency from a single-director structure to a bipartisan Commission is up to Congress. Enacting legislation to create a bipartisan Commission at the Bureau is a top priority for CBA and the banking industry.



Fed Publishes Report on What Bankers Want from CRA Reform: On Thursday, the Fedreleased a report summarizing many of the comments they have received from a series of community roundtables on the Community Reinvestment Act. The report notes many stakeholders encourage expanding CRA requirements to credit unions, fintechs, and other financial servicers, as well as adopting an approach to CRA that encourages defining a banks assessment area in ways more diverse and representative than relying on deposits. Many bankers who engaged with the Fed through the round tables notes that uncertainty created through the current rules stymies effective community reinvestment activity in many low- to -moderate income areas. While the report was fairly mute on the Fed’s plan to address these concerns jointly with the OCC and FDIC, leadership from all agencies have indicated they are working together to develop a coherent solution. 


The report is available here.


CBA Writes HFSC on Student Loan Servicing, Beneficial Ownership: CBA sent two letters to the House Financial Services Committee this week, one dealing with Tuesday’s hearing on student loan servicing and the other encouraging swift passage of the Corporate Transparency Act (H.R. 2513).


Student Loan Servicing:


The nation’s total student loan debt is approximately $1.56 trillion, and the federal government dominates the market with more than $1.4 trillion in loans. CBA members fully support policies to ensure financial institutions operate in a safe manner and treat their customers honestly and fairly. In fact, national banks are regularly examined and regulated by prudential regulators to ensure safety and soundness as well as by the CFPB for compliance with consumer protection laws. However, a checkerboard of conflicting and unworkable state rules has the potential to confuse consumers and make it difficult for lenders to offer low-cost private student loans.


A copy of CBA’s letter is available here and recommendations for improving student loan borrower outcomes is available here.


Beneficial Ownership:


CBA, along with eight other financial services trade associations, wrote to House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) and Ranking Member Patrick McHenry (R-N.C.) before their committee passed the Corporate Transparency Act (H.R. 2513) to prevent anonymous shell companies trying to abuse a loophole in our anti-money laundering framework. The legislation would create a secure beneficial ownership registr y of legal entities held by Treasury’s FinCEN.  


As the letter notes, “We believe H.R. 2513 strikes the right balance between imposing minimal requirements on small businesses while providing critical information to law enforcement and financial institutions performing due diligence. We encourage the drafters to work with the Treasury Department as part of the rulemaking process to consider relevant existing requirements, including the customer due diligence rule for financial institutions. We believe this legislation will provide clarity and consistency in implementation to help streamline the due diligence process while providing law enforcement with the key information needed to pursue illicit financial activities.”


A copy of the letter is available here.


FDIC Chairman McWilliams, CFPB’s Brian Johnson Speak at D.C. Conference: CFPB Deputy Director Brian Johnson and FDIC Chairman Jelena McWilliams gave keynote remarks at a conference this week sponsored by the libertarian Cato Institute. The conference focused on financial regulation and inclusion. In all, the remarks did not break much new ground but did touch on several issues of importance to CBA Members. The top takeaways fromChairman McWilliams and Deputy Director Johnson are included below.


Chairman McWilliams on regulations, technology, the benefits of banks and de novo applications:

  • The Chairman offered regulatory framework can either hinder innovation, be neutral in its effects towards innovation or encourage innovation. She stated at best, the current regulatory framework is neutral, but in many instances actually hinders innovation. Her goal is to identify ways the FDIC can ensure it is not standing in the way of innovation or in the way of the relationship between the bank and its customers.
  • She spoke of the many benefits of technology, noting it can be a great equalizer, permitting banks to reach a wide audience swiftly, launch new products, and better compete in a free market. For consumers, new technology improves the customer experience, lowers transaction costs and increases credit availability. The key question she posits for the regulators: "Are we going to help build this brave new world, or stand in its way?"
  • For those skeptical of the benefits banks provide, she asked that these individuals consider the alternative, and juxtaposed her experiences in Socialist Republic of Yugoslavia with the stability of the U.S. financial system and the opportunities and potential. 
  • Chairman McWilliams concluded by noting the FDIC's commitment to fully understand emerging technology and its initiatives to simplify and streamline compliance requirements.  She highlighted the FDIC's efforts to formulate a revised policy framework to encourage banks to offer small-dollar loan products to customers in need, to identify ways for regulators to allow banks to innovate without fear of regulatory uncertainty, and to improve the application process for de novo organizers. Noting banks have to compete with technology companies that are agile and can reach consumers without burdensome regulation, she indicated the FDIC is examining trends in retail financial markets, machine learning and artificial intelligence and big data.
CFPB Deputy Director Brian Johnson on inclusion, regulatory uncertainty and the Bureau's role:
  • Deputy Director Johnson began his presentation by defining the term "financial inclusion" as the availability and equality of opportunity to select financial services. Innovation, he argued, is the single biggest driver of financial inclusion because it drives market activity and market activity is, in turn, the greatest force for improving the lives of consumers. 
  • He emphasized that regulators must reduce regulatory uncertainty by providing guidance because doing so improves market outcomes and promotes financial inclusion. 
  • When asked "what is the role of 'the rule of law' in innovation," the Deputy DirectorJohnson answered that as a young agency with tremendous statutory responsibility, theCFPB needs to provide industry certainty. He stated to the extent the Bureau can provide guidance ,"so that people can conform their behavior to the requirements of the law, that means that we can focus our finite resources on going after those who really just don't have any interest in obeying the law."
CFPB Schedules Symposium on Definition of Abusive Acts: CFPB Director Kathy Kraninger announced earlier this year a series of symposiums to examine "outstanding, challenging issues the Bureau is facing."


The first symposium will be held on June 25, 2019 to discuss the definition of "abusive acts of practices," a new enforcement action given to the CFPB by the Dodd-Frank Act not defined in existing UDAP regulations.


The symposium will be held at the CFPB and webcast on their website.


CFPB Research, Markets and Regulations Associate Director Tom Pahl will moderate the first panel with:

  • Patricia McCoy, Professor of Law, Boston College Law School
  • Todd Zywicki, Professor of Law, George Mason UniversityAntonin Scalia Law School
  • Howard BealesGeorge Washington University; former Director of the Federal Trade Commission (FTC) Bureau of Consumer Protection
  • Adam Levitin, Professor of Law, Georgetown Law School
CFPB Deputy Associate Director of Supervision, Enforcement and Fair Lending David Bleicken will moderate a separate panel with:
  • William MacLeod, Partner at Kelley Drye; former Director of the FTC Bureau of Consumer Protection and Bureau of Competition
  • Eric Mogilnicki, Partner at Covington & Burling; former Chief of Staff, Senator Ted Kennedy Lucy Morris, Partner Hudson Cook; former CFPB Deputy Enforcement Director
  • Nicholas Smyth, Assistant Director of the Pennsylvania Office of Attorney General's Bureau of Consumer Protection, Senior Deputy Attorney General

CBA will monitor the symposium and update members on any developments. If you have any questions about the symposium series, please contact CBA Regulatory Counsel Stephen Congdon at




Capital One, Discover Tighten Credit Card Policies: At a conference this week, Capital OneChairman and CEO Richard Fairbank along with Discover CEO Roger Hochschild indicated the credit card market is tightening amid concerns the economy will slow down in the next few years. Citigroup CFO Mark Mason appears optimistic about borrowers’ ability to pay their monthly bills. More information on credit card policies and the looming economic slowdownhere.


First Tennessee, Capital Bank to Rebrand as First Horizon: After more than 40 years asFirst Tennessee Bank, the state’s largest bank announced plans on Tuesday to rebrand asFirst Horizon come this fall. The unified brand transformation has been in the works since the 2017 acquisition of Capital Bank, and is expected to be completed at the 250+ bank locations by the end of February 2020. More on the bank’s name change and rebrand here.


Synchrony, Amazon Partner for Credit-Building Card: Tech-giant Amazon is joining forces with Synchrony Financial to offer the “Amazon Credit Builder” – a card targeting underbanked or unbanked consumers with low credit scores. The card offers 5% cash back on purchases, the same reward the Amazon Store card offers. Learn more here.




ICYMI: Finance Frontier Podcast: I took part in CBA Associate Member Zoot Enterprise’sFinance Frontier podcast emphasizing it is time to "right size" regulation so it doesn't move too far left or right after elections. I also reiterated CBA's support of a five-member, bipartisan CFPB Commission and discussed other topics, including predictions for bank M&A activity! Get the full scoop by tuning in here or clicking on the image below.





Must-Read Student Loan Article: The Wall Street Journal ran an excellent article last weekend examining the student loan marketplace and how (going back to the Johnson and Nixon administrations) the system got to be the mess it is today.


Here is a key section – and a point CBA has been making for some time: Direct aid to students, “combined with a lack of government oversight, created perverse incentives: Colleges could raise money quickly by admitting academically suspect students while suffering little or no consequences if their students dropped out and defaulted on loans. The market was suddenly flooded with cheap money, which led to a surge in the ranks of college-going students. Colleges responded to higher demand by raising prices, leading Congress to increase loan limits and grants … By 2000, higher education had become an opaque and dysfunctional market."


The full article is available here.


Happy Birthday to Pace Bradshaw: Happy birthday to former CBA Team Member Pace Bradshaw with Visa! I am sure he wore his CBA 100 year commemorative cuff links on his special day. 




Chemical Bank and TCF Financial Shareholders Approve Merger of Equals


Regions Bank to Acquire Leading Institutional Investment Firm Highland Associates


Columbia Financial, Inc. to Acquire Stewardship Financial Corporation




CBA’s State of the Week is WYOMING, where more than a third of Cowboy State residents bank with a CBA member! CBA members in Wyoming hold $10 Billion in total assets, employ3,000 people, provide $200 Million in small business loans and serve 200,000 customers. Check out our state by state numbers here.