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Richard's Rapid Fire - June 17, 2016
Interest Rate Increase, Anyone?
Last November, most economists were predicting the Fed would increase interest rates several times in 2016. Yet, we are witnessing a complete shutout with no certainty of an increase in July. Last month’s anemic jobs numbers, BREXIT, and a weak oil market have dimmed prospects. I know you all remember Gallup’s Jim Clifton at CBA LIVE a few years ago when he said the American Dream is no longer buying a house, but instead securing a good-paying job. The candidates for president should laser-focus on turning around this economy.
Overdraft Protections Provide Consumers with Options
Earlier this month, the FDIC released its Quarterly Banking Profile for the first quarter of 2016, which noted an uptick in consumer use of bank-provided overdraft protections. Consumers are finding themselves with fewer viable solutions to help alleviate their financial woes, especially now that the CFPB has unveiled its proposed small-dollar lending rule. Per the Federal Reserve, nearly half of Americans are unable to cover a $400 emergency expense. The fact is overdraft protections provide a voluntary line of short-term credit to help consumers meet unexpected expenses. Thank goodness consumers have access to credit from well-regulated institutions they can trust. Otherwise, consumers might be forced into the waiting arms of pawnshops, offshore lending, and fly-by-night groups that will be more costly.
Banks Pay Disproportionate Share in Penalties to CFPB
According to a 59-page study by a special adviser to Director Cordray, mortgage lenders, debt collectors and credit card companies represent the biggest share of public enforcement actions over the last four years, but banks pay the most in penalties. According to the report, banks were the subject of 25% of the agency's 122 enforcement actions between 2012 and 2015, but paid more than 63% of the civil money penalties and 65% of the $11 billion in consumer relief collected by the agency.
Amid Increased Scrutiny, CFPB Spends BIG on Advertising
The CFPB has spent more than $15 million on internet ads so far in fiscal year 2016, per a Wall Street Journal Report. With 2.5% of the Bureau’s annual budget dedicated to advertising, this marks the second-highest level of spending on ads by all federal departments and similar regulatory agencies this year. While this type of hefty ad spending is not quite unheard of, it is clearly a far cry from the norm in Washington. The Journal notes only three agencies have spent more than 2% of their annual budgets on advertising over the past three years. Comparatively speaking, nearly all other federal departments and agencies have spent well below 1% of their annual budget on ad buys.
CBA’s Board and Mid-Tiers Come to Washington
We are excited to welcome CBA’s Board of Directors and Mid-Tier Retail Executive Forum to CBA World-Headquarters next week. On Wednesday morning, our Mid-Tiers will hold their quarterly meeting, and later that afternoon, the Board and our Mid-Tiers Representatives will make their way to Capitol Hill to meet with a number of Members of Congress to discuss CBA’s top legislative priorities. On Thursday, our Board will hold its quarterly meeting. We look forward to seeing everyone next week!
Tangie Holland, Senior Vice President, Fair & Responsible Banking Manager at Regions Bank, is now the Vice Chair of CBA’s CFPB Committee. She will continue to head up its Consumer Complaints Subcommittee.
Terry Dolan was named Chief Financial Officer by U.S. Bancorp. Previously, Terry served the bank as Controller.
On Wednesday, Maria Vullo was confirmed as the superintendent of the New York State Department of Financial Services.
CBA OnSite Education was in Jacksonville this week teaching MarketSim curriculum to 20 students from Black Knight Financial Services.
On Friday, Team CBA was bubbling over to celebrate the big 3-0 with our own Anna Bartlett Wright and Maren Colon (both center right). Happy Birthday!