Richard's Rapid Fire - June 15, 2018


CBA Board Meets With Regulators – Nearly the entire CBA Board of Directors met this week at our World Headquarters in Washington, D.C., and our agenda the past couple days has been nothing short of a whirlwind. We kicked off the visit weaving in-and-out of Washington Capitals fans on the D.C. Metro as we headed to meetings with OCC Comptroller Joseph Otting, Acting BCFP Director Mick Mulvaney, CEA Chair Kevin Hassett, NEC staffer Andrew Olmem and Treasury’s Deputy Assistant Secretary for Financial Institutions Jared Sawyer. I want to thank the entire Board as well as the dedicated public servants we met with for taking the time to speak candidly about the state of retail banking and the regulatory agenda. The key takeaway: This is a new regulatory era in Washington and regulators understand the important role our industry plays in financing the American Dream. 
I would be remiss if I did not wish Director of the National Economic Council Larry Kudlow, who we were scheduled to meet with, well as he continues to recover.
Deep Dive Into Banking – CBA Board Chair Brad Conner with Citizens led a great meeting and, as a matter of practice at CBA, we had a deep-dive discussion about industry. Our meeting at the White House was “off the record” but here are a few top takeaways from the rest of the visit:
 - From the OCC:
  • CRA: Comptroller Otting indicated not to expect a public release until late June or early July and the goal of the transformation would be: 
    • More objectivity;
    • Broader products that would qualify for CRA consideration; and 
    • More ongoing data analysis. 
  • BSA: This is a cross agency initiative, with the bank regulators working closely with FinCEN. BSA has become a “paper tornado,” and there is a need to be more risk-based. CBA noted a lack of consistency between exam teams. OCC may issue something jointly with the other agencies in 30-60 days.  
  • Small Dollar Lending: Comptroller Otting noted that 25-50 million people need small-dollar, short-term loans and it makes no sense to make them leave their banks to get them. Comptroller Otting said he is working with Acting Director Mulvaney on this issue.
 - From the Bureau:
  • HMDA: CBA praised the diagnostic form of exam used for HMDA and encouraged its use as a model in the future when new rules were implemented.
  • Complaints: Acting Director Mulvaney would like to stop operating a Yelp product for banks but wants to make sure any changes are made appropriately. 
  • Small-Dollar Lending: The Bureau has been working with the OCC on the small-dollar loans and stated he would like to see rules that would allow banks in this space.  
  • Exam Guidance & Interpretive Policy: CBA encouraged the Bureau to provide better ongoing guidance in support of bank compliance, including formal interpretations of major rules. 
 - From the Board Meeting:
  • We are excited to announce Cagri Suzer, Head of Retail Banking, at BBVA Compass and Pierre Habis, Managing Director and Head of Consumer Banking, at MUFG Union will be joining CBA’s Board of Directors. I want to thank Tim Wennes of MUFG Union and Larry Franco of BBVA Compass, who are leaving the Board, for being great and dedicated members of CBA’s Board. Here are a few other changes to our councils:
    • CBA Board Member Ellen Koebler of SunTrust will chair our Corporate Membership Council; and, 
    • Former CBA Board Member Larry Franco of BBVA Compass, Ernie Johannson of BMO Harris and Patrice DeCorrevont of Wells Fargo will join our Government Relations Council. 
  • Tom Brooks, Head of Regional Accounts at Visa, spoke to the Board of Directors on trends in contactless cards and payments. Most notably, he said payment growth has been strong and this past quarter saw an increase in debit use.
  • Committees are the backbone of CBA and the Board was excited to hear an update from Digital Committee Chair Mike Bernard of Webster Bank about what members are currently seeing in the digital space. Mike also shared a big win for the industry with the passage of the MOBILE Act – something the Committee has worked on for several years. The new law addresses issues surrounding state-I.D. laws in an effort to help more people open accounts online and enter the banking system. 



T Minus 7 Days – We expect President Trump to nominate his pick for the next fulltime Director of the BCFP next week. Acting Director Mulvaney can only stay on the job, under the Vacancies Act, until June 22 if a nomination is not made. But if a nominee is named, he can stay until the Senate confirms the fulltime director. Stay tuned!
Comptroller Otting Testifies Before Congress – After meeting with the Board, Comptroller Otting had two full days of testimony before Congress, first before the House Financial Services Committee and then the Senate Banking Committee. It is always exciting to hear a former banker give his take on regulations and the direction he wants to take the OCC.
Here are his priorities for the OCC:
  • Modernizing the Community Reinvestment Act;
  • Expanding short-term, small-dollar lending;
  • Adjusted bank capital requirements;
  • Recalibrating the Volcker rule; and,
  • Improving the functionality of the Bank Secrecy Act.
I will note CRA, small-dollar or micro-loans and adjustments to BSA/AML laws were all hot topics during the Board’s visit this week.
Two Fed Nominees Set for Confirmation Vote – By bipartisan majorities, Richard Clarida, nominated for Fed vice chairman, and Michelle Bowman, nominated for Fed community banker seat, cleared the Senate Banking Committee. Both nominees require a vote from the full Senate.
Fed Hikes Rates, Signals More to Come – Speaking of the Fed… They voted to raise interest rates this week and signaled two more increases might be on the way. 


Pencils Down – Applications are closed for CBA Executive Banking School and we are at capacity. A huge thanks to all the banks sending students as well as the students themselves for dedicating their time and energy. EBS provides a rigorous, boutique education that immerses bankers in real world scenarios. It is our goal to prepare and inspire the next generation of banking leaders.


CBA Internal Audit Committee Chair Dan VanSciver – Heading one of CBA’s newest Committees, Dan VanSriver of Sallie Mae Bank has been nothing short exceptional. He helped grow the group into a full-fledged CBA committee, which is not to be taken lightly. Prior to joining Sallie Mae, Dan served as SVP and Assistant General Auditor for over a decade. Today, he also serves on the Advisory Board of the John L. Weinberg Center for Corporate Governance. Personally, Dan is passionate about seeing young adults succeed, realize their dreams and graduate from college. He enjoys spending time with his wife of nearly 28 years and their children. 


Best Wishes for Bobby Grant and Garrett Lusk – Best wishes to two great CBA team members. First, this was Bobby Grant’s last week at CBA. He was our Communications and Media Relations Manager for nearly three years and during that time was a real rock star – serving as a liaison on the Auto Committee, writing press releases and columns, running our social media feeds, working with reporters, and serving as our most recent Director of Fun (a full-time job in itself). Bobby leaves some big shoes to fill here at CBA and I have no doubt this will not be the last we hear of him. 
I also want to congratulate our Spring intern Garrett Lusk on heading off to college at Vassar University, where will be on the soccer team. He was a valuable asset to the team and we thoroughly enjoyed having him with us. 
Gary Cohn Opens Up – The Washington Post held a breakfast with former banker and White House adviser Gary Cohn yesterday. It was a fascinating discussion, particularly when it came to tax reform. Cohn said the economy should start seeing benefits from corporate capital expenditures resulting from the tax changes next quarter, at the earliest, and increased expenditures in resulting years as corporations begin acting on post-tax business models. He also noted this was the first time the economy had more open jobs than people looking to fill them.