Richard's Rapid Fire - June 7, 2019

CBA conducted a MarketSim Onsite Education session at CBA Premier Sponsor Black Knight in Jacksonville, Florida this week.


The immensely popular program leverages a proprietary simulation of a retail banking marketplace and was instructed by CBA Vice President of OnSite Education Tom Dent.


Interested in bringing advanced education directly to your team? Find out how our programs can take your team to the next level here.


Cajun Thoughts: WATERS, BEATTY REQUEST BIG BANK DIVERSITY DATA Chairwoman Maxine Waters and Diversity and Inclusion Subcommittee Chair Joyce Beatty sent letters to 37 big bank holding companies (with more than $50 billion in assets) requesting demographic data of employees and board members. They also intend to collect details on the lenders’ diversity policies and investments in minority-and women-owned businesses …  FIRST BANK FAILURE SINCE 2017 A $36.7 million bank fails…Regulators closed The Enloe State Bank in Texas late last week, marking the first bank failure since December 2017 and the first in Texas in 5+ years. The FDIC said about $500,000 of deposits exceeded insurance limits and the failed bank is estimated to cost the DIF $27 million, more than 73% of the failed bank’s asset size. This amount is not a significant hit to the DIF – what is significant, however, is the acquiring bank (Legend Bank in Bowie, TX) only purchased $5 million of the supposed $32 million in assets … BB&T/SUNTRUST UPDATE The new BB&T/SunTrust name is… Coming this month!  But that isn’t all that is coming… As SunTrust CEO Bill Rogers announced this week the bank’s community investment in Atlanta will increase from $50 million to $100 million annually over the next three years following the proposed merger. BB&T also stated plans to give back to Winston-Salem, with a focus on affordable housing, workforce and economic development, financial wellness, health and human services, and access to arts programs as the combined bank prepares to move its headquarters out of both cities and into Charlotte, N.C.




FCC Updates Robocall Ruling, Addresses CBA Concerns: The FCC voted Thursday to adopt a declaratory ruling aimed at preventing illegal robocalls. The draft ruling would allow for phone carriers to automatically opt customers in to call blocking technologies in an effort to thwart fraudulent robocalls. The original draft ruling, however, would have potentially blocked legitimate calls from banks without legal recourse, and did little to ensure customers were notified that they would now be automatically opted-in to call blocking technology.


After meeting with and writing to the FCC to outline our concerns, the Commission noted during their vote the importance of a mechanism for legitimate callers to challenge any negative designation their calls receive or stop their numbers from being blocked. The Commission also noted the importance of carriers properly notifying customers they had been opted-in to call blocking technology to ensure customers receive the calls they want and need. Both should be included in the declaratory ruling that will be published later this month, largely due to the efforts of CBA and our joint-trade partners.


CBA fully supports the elimination of illegal robocalls and appreciate the FCC’s work in protecting consumers, especially the elderly who are often targeted by these scams supports the elimination of illegal or fraudulent robocalls as a vital tool for protecting consumers.


The declaratory ruling by the FCC, however, could actually end up hurting consumers by blocking, without notice, legitimate calls from banks, other financial institutions, retailers or health care providers.


A copy of the letter CBA sent along with several other trade groups is available here.


CFPB Finalizes Delay of Payday Rule’s Mandatory Underwriting Provision: This morning, the CFPB finalized the delay of the August 2019 compliance date for the mandatory underwriting provision of their payday rule. The 15 month delay will require compliance with the mandatory underwriting provisions by November 19, 2020. CBA has advocated for a delay of the entire rule to Director Kraninger and her staff.


A copy of CBA's most recent letter is available here.


CFPB CAB Summer Meetings: The CFPB's various advisory boards held their summer meetings in Washington, D.C. this week. Representatives from the Consumer Advisory Board (CAB)Credit Union Advisory Council (CUAC) and Community Bank Advisory Council (CBAC) met to discuss the CFPB's Notice of Proposed Rulemaking (NPRM) on debt-collection, consumer reporting trends, and customer engagement and education.


This was the final meeting of the advisory boards before new members join the ranks this September. While the various boards met separately on Wednesday, they met together to speak about debt-collection on Thursday, with members reflecting the need for clear and consistent standards for communication methods throughout the debt-collection process.


When questioned about the debt-collection NPRM's effect on creditors, CFPB Director Kathy Kraninger stated while the rule is built to deal with debt-collectors as defined in the Fair Debt Collection Practices Act, applicability to the provisions in the NPRM were in the back of her mind. 


Chairman McWilliams on CRA, Small-Dollar: FDIC Chairman Jelena McWilliams spoke at a community banking event this week in Washington, D.C. During her remarks, she discussed several community bank issues and some items of note for CBA Members. Her full remarks areavailable here and highlights are below.


Chairman McWilliams noted she is about halfway through her 50-state listening tour and has directed the FDIC to increase efforts to:


  • Modernize the Community Reinvestment Act (CRA) framework and provide clarity to institutions on their CRA obligations.
  • Ensure that our regulatory framework encourages banks to offer products and services to low- and moderate-income households.
  • Actively seek ways to reduce regulatory burden on our community banks.
  • Encourage community banking, including the establishment of de novo banks in communities of all sizes.
  • Promote and preserve the nation's Minority Depository Institutions (MDIs).


CRA Priorities:


  • Focus on clarifying what activities qualify for CRA credit. Institutions are more likely to make community investments when they are confident that these investments will qualify for CRA credit.
  • Review how agency will assess lending – including digital lending – by banks outside of the area where their main offices and branches are located.
  • Work to ensure that CRA investments target those most in need in a bank's community.
  • Chairman McWilliams declined to state a timeline for reform.


Small-Dollar Lending:


  • Chairman McWilliams said "consumers benefit when they can walk into a bank to obtain this type of credit, especially banks that have longstanding relationships with local customers and communities. But banks have chosen not to offer such products because of regulatory uncertainty. As a result, many families rely on non-bank providers to cover these emergency expenses, or their needs go unmet."
  • The FDIC is using the guidance it collected from its November RFI to "formulate guidance that can help institutions develop small-dollar loan programs that meet their business needs and are safe, accessible, and understandable to consumers."
  • Chairman McWilliams noted the FDIC is working jointly with the Federal Reserve andOCC.


While Chairman McWilliams frequently weaves her personal story into her speeches, the following quote about her immigration story was both new and eloquent:


  • "That secured credit card in 1991, on terms that I would probably find egregious now, was my ticket into the system that has subsequently allowed me to thrive. And, as I thrived within the system, I learned to respect it and contribute to it. As I became a taxpayer, a homeowner, a mother of a child in public schools, and a public servant in various roles at the Federal Reserve, the United States Senate, and now the FDIC, I stopped being disenfranchised. Instead, I became a shareholder in the United States of America with a vested interest in its success."


Chairman Powell on Trade: Federal Reserve Chairman Jerome Powell, discussing a potential U.S. trade war with Mexico and China, said the Fed is "closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective."


CFPB Releases Semiannual Report to Congress: The Office of the Inspector General (OIG) for the CFPB and the Fed released its semiannual report to Congress. During the covered period (October 1, 2018 - March 31, 2019), Director Kathy Kraninger began her tenure at the CFPB and Michelle Bowman joined the Board of Governors at the Fed. In addition to processing 262 hotline complaints and closing 13 investigations, the OIG highlighted the following actions:


  • The Fed's information security program is operating at a level-4 (managed and measurable) maturity, which indicates an overall effective level of security.
  • The CFPB's information security program is operating at a level-3 (consistently implemented) maturity, with the agency performing several activities indicative of a higher maturity level.
  • During the examination process, CFPB employees may identify corrective actions that a supervised institution needs to implement to address certain violations, deficiencies, or weaknesses. These corrective actions include Matters Requiring Attention (MRAs).TheCFPB can improve its follow-up process for MRAs.
  • The Fed division leaders have varying perspectives on the need for an enterprise-wide workforce planning process. Their willingness to participate in such a process may be impeded by factors such as communication, undefined roles and responsibilities, a lack of clear support from Fed leadership.
  • The OIG identified opportunities for the Bureau to improve its risk assessment framework for prioritizing and scheduling examinations, which includes the identification, analysis, and prioritization of specific institution product lines for examination.


The OIG also highlighted their investigations into Wilmington TrustSociété Générale, S.A., and the former Acting President of CFB Community Bank.




Brandee McHale to Lead Wells Fargo Philanthropy, New Strategy: Wells Fargo unveiled its new philanthropy strategy on Wednesday, along with appointment of a new head of philanthropyBrandee McHale. The bank’s new foundation puts a strong emphasis on the housing affordability crisis and the problem-solving needed to help get more people into safe and reasonably priced homes. Wells Fargo also announced $1 billion in philanthropy alone through 2025 to address challenges of the U.S. housing affordability crisis, including homelessness, available and affordable rentals, transitional housing and home ownership.


More details on Wells Fargo’s new philanthropic strategy are available here.


BMO Harris Expands Ernie Johannson’s Role: CBA Government Relations Council MemberErnie Johannson was promoted to Group Head of North American Personal Banking and U.S. Business Banking at BMO Harris. In her new role, Ernie will continue to deliver on her passion for unbeatable customer experience and support the digital transformation. Congratulations toErnie – a CBA-family member! 


U.S. Bank Applies Black Knight LOS to Correspondent, HFA Channels: U.S. Bankannounced plans to implement EmpowerBlack Knight’s loan origination system (LOS), to manage purchased loans via correspondent and HFA lending channels. The omni-channel LOS has been modified to support a streamlined process for correspondent loan purchases. The bank will also utilize Black Knight’s AIVA, a cloud-based artificial intelligence and machine learning tool, to efficiently automate mortgage and home equity tasks. Learn more about CBA corporate member and premier sponsor working together here!


SunTrust to Double Commitment to Atlanta: As SunTrust prepares to move its headquarters out of Atlanta when it mergers with BB&T, CEO Bill Rogers said community investment in Atlanta will balloon from $50 million to $100 million over the next three years. While Rogers did not reveal any specifics about the impending merger, the combined bank is expected to continue local sponsorships, including the Atlanta Braves' SunTrust Park, which will be renamed.


Jamie Gregory to Join Synovus as CFO: Regions Bank executive Jamie Gregory will succeed Kevin Blair of Synovus as Executive Vice President and Chief Financial Officer beginning June 24. With a decade of experience at RegionsGregory most recently served as Executive Vice President and Head of Corporate Financial Strategy. More information aboutGregory’s experience and new role is available here.


Bank of America Adds Human Advisors to Guided Investing Platform: On Monday, Bank of America announced an enhancement to its Merrill Guided Investing digital platform – combining capabilities with advice from a Merrill Financial Solutions Advisor (FSA). This high-tech investment advisory platform is designed to offer clients advice and guidance with wealth management issues ranging from retirement goals to personal goals. Learn more here.




U.S. Bank’s Bhatt Named Digital Banker of the Year: Senior Vice President for omnichannel experience Ankit Bhatt of U.S. Bank was named Digital Banker of the Year by American BankerBhatt joined the team in April 2019 and led an effort to improve the bank’s digital offerings by seeking customer feedback and upgrading software accordingly. Congratulations toBhatt and U.S. Bank!


Online Lender SoFi Loses Three Executives: Three top executives announced plans to depart from online lender SoFi this week. Kevin Moss, who led the risk division and formerly a risk executive at Wells Fargo, is retiring; Ashish Jain, capital markets chief, is switching to another lender; and Joanne Bradford, marketing chief, has not released her plan.



NASA Federal Credit Union and The Partnership Federal Credit Union Announce Intent to Merge


State Bank of Cross Plains, Union Bank & Trust Officially Merge June 1


S&T Bancorp, Inc. and DNB Financial Corporation Announce Merger


Select Bancorp Announces Plans for Sale of Six Mile, South Carolina Location


Waterford Bancorp, Inc. Announces Agreement to Acquire Clarkston Financial Corporation


Dothan-based Trinity Bank Announces Merger


South Carolina Federal Merges with Spartan Federal Credit Union




CBA’s State of the Week is MISSOURI, where more than a quarter of Show-Me State residents bank with a CBA member! Home to Commerce Bank, CBA members in Missouri hold $86 Billion in total assets, employ 22,000 people, provide $2.1 Billion in small business loans and serve 1.6 Million customers. Check out our state by state numbers here.