Richard's Rapid Fire - March 8, 2019


Awesome CBA Deposits & Payments Committee representation at CBA Premier Sponsor Harland Clarke's Executive Forum in Scottsdale, AZ.

From left to right: Vice Chair Desiree Wolfe of Webster BankMatt Wind of Comerica;Jennifer Dier of Hancock Whitney.

Thanks Matt for the picture!

Cajun Thoughts: AMERICANS LIKE BIG BANKS You might have read WSJ’s recent article about how Americans love big banks and how they are gathering more deposits. Today from birth to death a person can have the same bank and telephone number. Small town banks have a problem: Americans love big banks and the technology that comes with it … CRA MODERNIZATION I know of no banker who believes the number of branches will grow, but it doesn't mean they won't continue to serve the needs of a community. I am very disappointed in Bloomberg’s depiction of a one-sided story. The way banks serve customers has changed since CRA was signed into law, but banks’ commitment has not. Bringing CRA into the 21st century will avoid a one-size-fits-all framework to meet the unique needs of each community. New tech platforms are available and often preferred by consumers … KRANINGER HEARING From what I saw, and I will watch all four hours this weekend, new CFPB Director Kraninger was cool and calm during her first testimony before Chairwoman Waters’ committee. Some Democrats will now attempt to clip Kraninger’s power, which is the complete opposite of their position just months ago. I thought the purpose of having unlimited discretion was ideal for consumers? Ranking Member Patrick McHenry along with Democratic Reps. Meeks, Scott and Gonzalez all support changing the structure of the CFPB. Before switching from the House to the Senate, Sen. Sinema was the lead sponsor of legislation creating a bipartisan commission at the Bureau last year …  PANIC: THE UNTOLD STORY Each year I try to watch the events of 9/11 as they unfolded (CNBC usually airs the actual footage). I also think it should be mandatory watching for every generation to see how our country was attacked. I now add another historical event that should be mandatory watching and that is the financial crisis of 2008. In fact, the entire CBA Team will be watching this documentary together so everyone can appreciate the events of 2008.

CBA’s thoughts and prayers are with our members and communities impacted by last weekend’s tornado outbreak in the South. Banks are helping customers in the path of the storm.

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Kraninger Testifies Before HFSC: CFPB Director Kathy Kraninger testified before the House Financial Services Committee earlier today. The hearing, her first before the committee, focused on the Bureau's 2019 Semi-Annual Report. Following Director Kraninger's testimony, a second panel of witnesses discussed recent actions by the Bureau and if it is actually pursuing its mission to protect cconsumers. 

Director Kraninger's full opening statement, a complete hearing summary and copies of the second panel's statements are available here.


A brief summary of Director Kraninger's testimony and Q&A session is below.


Overall, Director Kraninger bore the brunt of Committee Democrats' frustrations over actions taken and initiated by her predecessor, then-Acting Director Mick Mulvaney. Particular focus was given to the state of student loan debt and committee members encouraged the CFPB to do more to help student loan borrowers. In particular, several Democrat members called forDirector Kraninger to elevate the role of the Students and Young Consumers Section and encouraged the prompt hiring of the Private Student Loan Ombudsman.


Several Democrats also raised concern about the Bureau's de-prioritization and what they viewed as weak enforcement of the CFPB's fair lending mission, including the Bureau's pay day or small dollar rule review.


Members on both sides of the aisle raised issues related to the Bureau's fundamental structure and accountability under multiple Directors. Democrats stressed the need for the Consumer First Act to restore operations originally put in place by Director Cordray. Republicans pushed for changes to the Bureau's leadership structure, with some calling for a bipartisan commission as CBA has long supported.


Director Kraninger noted although the reports outlined in her written statement were undertaken before she arrived, they provide "a touchstone" as she creates a fresh outlook at the agency under her leadership.  She said she has been impressed by the Bureau's exceptionally talented and dedicated staff. Ms. Kraninger spoke about her cross-country listening tour to meet with industry stakeholders, regulators, consumer advocates, and legislators.


She also said in her opening remarks she has talked to her examiners about working with institutions to build a culture of compliance and how supervision should be a more prominent tool. Financial institutions have shared with her the value of the examination process and the importance of clear rules.  


Director Kraninger pledged the Bureau will continue to pursue bad actors and take enforcement actions against them. Furthermore, the Bureau is reconsidering "the sufficiency of the evidence and analysis supporting the underwriting requirements of the short-term small-dollar lending rule." 


Looking ahead, her priorities will be "emphasizing stability, consistency and transparency" and she will examine how to best utilize all of the tools of the Bureau – broadening the agency's focus and primary goal towards the prevention of harm.


CBA wrote the House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) and Ranking Member Patrick McHenry (R-N.C.) in advance of the committee’s hearing to review oversight of the CFPB and its activities. Director Kathy Kraninger testified on behalf of the CFPB and was pressed on the agency’s actions under the Trump Administration.


Among issues we discussed were:


  • Bipartisan Commission at the CFPB
  • Independent Inspector General
  • Clarifying Guidance
  • Harmonizing UDAP Authority
  • Enforcement & Supervision
  • Small-Dollar Bank Lending
  • Know Before You Owe Federal Student Loans
  • Separation of Ombudsman & Office of Students Role
  • No-Action Letters & the Office of Innovation’s Project Sandbox
  • Privacy Implications of HMDA
  • Complaint Database
  • Section 1071 Small Business Rulemaking
  • Cost Benefit Analyses


Regulatory stability and transparency will not be realized until the CFPB’s governance structure allows for the debate and deliberation of multiple leaders with diverse experiences and expertise. A bipartisan commission of five, Senate-confirmed commissioners would provide a balanced and deliberative approach to supervision, regulation, and enforcement of rules and regulations that oversee the financial services industry and provide consumers needed safeguards.


CBA stands ready to work with Congress and the CFPB to implement the suggested legislative and regulatory improvements to the agency.


More information on our letter is available here.


CBA's Kris Fallon Talks Federal Student Loan Crisis: CBA Vice President of Congressional Affairs Kris Fallon yesterday joined Yahoo Finance's Adam ShapiroJulie Hyman, and Brian Cheung to discuss America's federal student debt crisis and CBA’s recommendations to help tackle the situation.


Key excerpts from the interview are below:

  • [Americans] have $1.5 trillion in student loan debt. The Department of Education is essentially the nation’s fifth largest bank … 1 in 5 federal student loan borrowers today is either seriously delinquent or in default. So there is clearly a federal student loan crisis on our hands.
  • There is a role for the federal government but we also believe the federal government should be more responsible than it is today because we don’t want to set up borrowers for failure and that is unfortunately what is happening in the federal student loan space.
  • There is a direct correlation in the increase in federal student aid and tuition.
  • We want borrowers to know their options … The disclosure you get [on federal loans] is opaque. They are not personalized to you and you have no idea what your monthly payment will be … The federal government provides dozens of pages of fine-print legal jargon and a borrower doesn’t have the key information they need … On the private side, we offer three times during the loan process Truth in Lending Act disclosures with a very clear personalized disclosure of interest rate and monthly repayment amount.
  • Look at the 98%private student loan repayment rate. Our borrowers are successfully graduating, getting jobs and being able to repay the loan.


The full interview is available here.


Recently, CBA conducted a poll on Americans’ views regarding student loans and also wrotethe Department of Education and CFPB requesting federal student loans carry the same clear, personalized, plain-language disclosures already provided on bank-offered loans.






Webster Launches Service to Manage Student Loan Debt: To help student borrowers manage high levels of debt, Webster Bank launched Student Loan Refinancing, a technology-powered solution allowing borrowers to repay debt over a shorter or longer period of time with no fees to refinance.


“We’re offering a user-friendly online solution that gives these borrowers a way to save money and streamline their financing so they can confidently step up to life’s next opportunities,” said CBA Incoming Board Chair & Head of Community Banking Nitin Mhatre of Webster.


This is yet another move by banks to assist in tackling the looming student debt crisis. I am very proud of the progress being made. Learn more about Webster’s new product here.


CBA’s one-pager on student debt is available here.


JPMorgan Chase Enters POS Market: As consumer demand for point-of-sale (POS) lending continues to increase, banks also continue to enter the market. JPMorgan Chase developed a new option called ‘My Chase Plan’ to allow card customers to finance purchases of more than $500 with monthly fees instead of interest-based repayments. Other big banks already in the space include CitizensFifth Third BankRegions Bank and Synovus. Learn more here.


Zest Finance Partners with Discover on AI-Powered Underwriting: CBA Associate MemberZest Finance and Corporate Member Discover announced this week one of the largest AI-powered credit underwriting systems in the industry. Hundreds of unusual data points about personal-loan applicants will be gathered and considered in the underwriting process. The tool will begin the second half of 2019. More about the system here.


Maria Tejada to Lead Risk at Wells Fargo: This week Maria Teresa Tejada started her new role as Wells Fargo’s Chief Strategic Enterprise Risk Officer, another example of the bank’s efforts to expand the risk management division. Ms. Tejada, coming from various risk leadership roles with KeyCorp, will spearhead risk programs, direct risk reporting and manage both strategic and reputation risk. The moves taken by Wells Fargo to reorganize and revamp its corporate risk division continue to benefit both customers and employees. Learn more about Ms. Tejada’s background and her new role here.


New CBA Associate Members: We’d like to welcome these new Associate members to the CBA family – Ailleron GlobalAllied SolutionsEpic ResearchEpicenter Technology,LendingTreeLighticoPlaidRussell Reynolds and Upstart. You can see all of our Associate Members here.


Welcome Jenny McLaughlin to the CBA Team: Big welcome to Jenny McLaughlin! Monday was her first day on the CBA Team. Jenny is a D.C. native and comes with prior trade association experience. We are excited to have her in the Membership Coordinator role – not to mention, she also got an A+ on the customary first-day CBA Knowledge Test!





Our State of the Week is MISSISSIPPI, home to Hancock Whitney Bank, where half a million Mississippians bank with a CBA member! CBA members hold $15 Billion in total assets, employ 8,000 people, provide $400 Million in small business loans and serve 500,000customers. Check out our state by state numbers here.