Richard's Rapid Fire - May 25, 2018


Congress’ Buzzer Beater – With the Memorial Day shot clock winding down, the House of Representatives passed a good, commonsense and bipartisan regulatory reform bill (S. 2155). The bill will help many U.S. banks invest in their communities, workforce and infrastructure. While the legislation makes some meaningful reforms, there is still more to be done. Going forward, we hope Congress will establish a bipartisan commission at the Bureau of Consumer Financial Protection and enact reforms which take a more holistic view of systemic risk based upon individual institutions' activities rather than arbitrary asset thresholds. With just a few days remaining before the Memorial Day recess, Congress delivered and President Trump signed the bill into law.
ICYMI – I joined CNBC’s Closing Bell to discuss the merits of the bill. You can tune in here.
The Game Plan: Notable Bill Takeaways – There were a handful of regulatory changes in the bill, including:
  • MOBILE Act: A CBA-backed provision, this reform will ensure consumers have the ability to open bank accounts from mobile or online devices in all 50 states by simply swiping, scanning or copying their state issued identification card.
  • Synthetic Fraud Protection: This reform, advocated for by CBA, will help protect children and adults from the threat of identity theft and fraud. 
  • Relief for Systemically Important Institutions: Provisions in the reform bill significantly change the designation of systemically important financial institutions with assets less than $250 billion.
$50B - $100B

No longer considered SIFIs immediately upon enactment.
$100B - $250B

Exempted from the designation 18 months after the date of enactment. The Federal Reserve will conduct periodic supervisory tests and has the authority to recommend to FSOC that it deems them systemically important in the future.

No change.
  • Credit Freezes: The bill amends the Fair Credit Reporting Act to require credit bureaus provide consumers the right to place a security freeze on their credit reports free of charge. It would also extend the initial fraud alert time period from 90 days to one year.
  • Private Student Lending: The bill amends the Truth in Lending Act to prohibit a creditor from accelerating or declaring a default on a private student loan solely based on the bankruptcy or death of a cosigner.
A more detailed description of each provision is available here.
President Trump’s Banking Roster – There are new heads atop each of the key banking regulatory posts and we look forward to working alongside President Trump’s regulatory team. They are as follows:
  • Bureau of Consumer Financial Protection: Acting Director Mick Mulvaney;
  • OCC: Joseph Otting;
  • Federal Reserve: Jerome Powell;
  • Federal Reserve VC of Supervision: Randal Quarles; and
  • FDIC: Jelena McWilliams.
Ms. McWilliams rounded out the new team of regulatory heads after she was overwhelmingly confirmed by the Senate this week. Her unique combination of policy, regulatory and banking experience make her an exceptional selection for the role of FDIC Chair. You can learn more about her and her priorities here.
Up Next: CRA Modernization and New Bureau Director – The Top two items to be on the lookout for include:
  • Modernizing CRA – An Advanced Notice of Proposed Rulemaking on the Community Reinvestment Act issued from the OCC is expected to be released shortly. It could be done in coordination with the FDIC and Fed too.
  • New BCFP Director Coming Soon –The clock is ticking for President Trump to nominate a permanent BCFP Director as Mulvaney’s tenure as Acting Director comes to a close at the end of June. However, if the President nominates a permanent director before June 22, Mulvaney can serve until the nominee is confirmed. Mulvaney has previously stated he expects to serve until the end of the year.
Does the Federal Government Know Best? – The federal government’s previous small-dollar lending policies may be coming to an end. Study after study has shown that millions of Americans do not have enough money in their bank account to pay unexpected bills ranging from auto repairs to medical expenses. Simply put, Americans need access to short-term credit. However, regulatory uncertainty has previously forced banks out of this space, leaving families to rely on pawn shops, costly payday lenders or loosely regulated online lending during times of financial stress. The OCC’s recently released bulletin on small-dollar lending sends a clear signal bankers can help customers receive short-term loans within the well-regulated, cost-effective banking system. A copy of the bulletin is available here.
OCC’s Semiannual Risk Report – The OCC released its Semiannual Risk Perspective Report for Spring 2018. The key takeaways from the report include: new Fintech guidance expected in July; the need for banks to fully understand the level of access given to third-party service providers; and, a caution that consumer deposits will become more costly for banks. For a deeper analysis, please see CBA’s summary of the report here.
The Bureau in Review – Since taking over as Acting Bureau Director, Mick Mulvaney has released a rulemaking agenda, semiannual report, strategic plan and reorganized aspects of the Bureau’s reporting structure. For a comprehensive recap of the Bureau’s actions to date under Mulvaney, please see this “cheat sheet.” It includes what the media has focused on as well as the regulatory structural changes Mulvaney has made during his tenure.
CBA Comments on Bureau’s Supervision Processes – The Bureau’s RFI process continued to roll on this week with comments due on their supervision processes. Regulatory supervision is an important part of the Bureau’s mission and daily functions. In our letter we noted:
  • The Bureau should focus on genuine consumer harm and deterrence of bad actors;
  • Examinations should begin and end expediently to provide an interval of normal operation;
  • The Bureau must provide an appropriate amount of time to implement regulatory changes;
  • The Bureau should prioritize and conduct examinations for compliance with specific requirements based on potential for genuine consumer harm; and,
  • Supervisory actions should be done in coordination with other agencies to promote efficiency, harmonize data requests and resolve issues in concert.
By The Way – Former Representative Barney Frank, a co-creator of the Dodd-Frank Act, now works for a bank and has served on Signature Bank’s board for three years. During that time span, he has received more than $1 million in payments from the bank, according to the Washington Post.
Hello KeyBank! – Talk about a great day, outstanding weather and a robust conversation. I enjoyed my time in Cleveland this week meeting with a host of CBA members at KeyBank. During the meetings, we covered the current regulatory environment, key regulatory and legislative developments, M&A activity and the Federal Government’s poor track record on student lending. It is also good to see KeyBank taking full advantage of our education offerings by sending 20 students to CBA Executive Banking School this summer.
This week, CBA's Richard Hunt (right) was in Cleveland, OH meeting with representatives from KeyBank including CBA board member Dennis Devine (left) and CEO Beth Mooney (center).
A big thanks to KeyBank CEO Beth Mooney and CBA Board Member and Co-President of Key Community Bank Dennis Devine for being such gracious hosts. Glad to see so many CBA committee members and CBA Executive Banking School students too!


CBA Committee Chair Mike Bernard of Webster Bank – CBA Digital Committee Chair Mike Bernard of Webster Bank is relatively “new” to the banking industry, but he boasts more than 20 years in the digital and IT fields. He has been with Webster Bank for more than six years and serves as the Senior Vice President of Digital Banking. Since becoming chair of CBA’s Digital Committee in 2016, Mike has been simply superb. Coupled with his understanding and passion for all things digital, Mike’s leadership has been instrumental in the success and growth of the committee. Most notably, he has spearheaded two benchmark studies and has joined CBA in advocating on behalf of the industry with stakeholders in D.C. However, I have to say, he should’ve chosen the Dallas Cowboys instead of the New England Patriots as his favorite football team.


Mahesh Aditya – Mahesh Aditya was named chief risk officer at Santander Holdings USA. She previously served as chief operating officer.
Hisham Salama – Hisham Salama was named Executive Vice President, Head of Digital Channels at Bank of the West. Hisham recently joined CBA’s Digital Committee as well.
Happy Birthday! – We are wishing Karl Kaufman, SVP and Chief Regulatory and Banking Counsel at Synchrony Financial, well as he celebrates his birthday this week.