Richard's Rapid Fire - October 20, 2017

​Cordray, Noreika Arbitration Spat Heats Up

CFPB Director Richard Cordray and Acting OCC Comptroller Keith Noreika continue to publicly air their disagreements over the merits of the CFPB’s arbitration rule. Recently, both agency heads published dueling op-eds in The Hill challenging each other’s views of the rule. This week, the debate continued to escalate as both challenged the validity of the opposing agency’s analysis on how the rule would affect the cost of credit. This is about more than who is right and who is wrong. It is about what is best for consumers. Arbitration has long provided a faster, more cost-effective and higher recovery alternative to class action lawsuits. Congress should work to overturn the CFPB’s rule.



OCC Revises Policy on CRA Downgrades

Late last week, the OCC issued a bulletin updating its examination policy to clarify the reasons a bank may receive a CRA-related downgrade. According to the bulletin, a downgrade "should be supported by strong evidence of quantitatively and qualitatively material instances of discriminatory or illegal credit practices directly related to CRA lending activities that have resulted in material harm to customers." Click here to get a deeper read on the issue.



SIFI Reform on the Docket, Says Top Trump Official

As the Senate debates financial reform, National Economic Council Director Gary Cohn expects the $50 billion SIFI threshold to be quadrupled. While revising or updating regulations with negative consequences is heartening, we encourage policymakers to take a more holistic approach to SIFI reform: analyzing the inner workings of an institution’s business model is a much better approach to assessing risk than simply glancing at an institution’s balance sheet and total assets. 



Ohio Supreme Court Justice Expected to Announce Bid for Governor, No Word From Cordray

With a “big announcement” scheduled today October 20, reports suggest Ohio Supreme Court Justice Bill O'Neill will throw his hat in the ring for the Democratic nomination in Ohio’s Governor Race. The sitting justice mentioned he would not run for Governor if CFPB Director Richard Cordray enters the race. Should Justice O'Neill enter the race, the million dollar question is: Will Richard Cordray stay at the CFPB or relinquish the post and run for Governor? At the moment, there is no word from Director Cordray, but the February 7, 2017, deadline to enter the race is looming.



Digital Disrupters Are Here to Stay

From your television screen to the palm of your hand, traditional media giant NBCUniversal has teamed up with social media disrupter Snapchat to produce and distribute original content via the Snapchat app. Additionally, MoviePass has partnered with movie theatres across the country to counteract the disruption Netflix has brought to the industry by offering a monthly subscription service for in theatre movies. Both of these developments show just how much digital transformations are forcing industries across all sectors of the economy to adapt. This is why our member banks are working tirelessly to keep up with consumers’ digital wants and needs to ensure a topnotch customer experience is provided.



Topline Observations from Banks’ Q3 Earnings

With Q3 earnings rolling in, here are a few of CBA’s top takeaways from this quarter’s returns:

  • Banks are reporting stronger 3rd quarter earnings due to increases in lending;
  • Cost cutting and expense controls are still prominent in the industry; and,
  • Overall credit quality continues to be strong.



CFPB Releases New Principles for Data Sharing

This week, the CFPB released a set of data sharing principles it is encouraging companies to follow when handling consumers’ financial data. In the report, the CFPB recommends data should be collected only with consumers’ direct consent and be discarded after its intended use is complete. The guidance also stated third parties must notify consumers when they gain access to their data and protocols should be put in place for consumers to address inaccurate information. For a complete list of the CFPB’s recommendations, please read their report here.



Membership Spotlight: CBA Visits With Membership In Tennessee and Arkansas

I had great meetings with CBA Members at First Tennessee Bank, Independent Bank and Bank of the Ozarks this week.  We discussed M&A trends, banks’ efforts to protect consumers from cyber criminals, and the future of the CFPB to name a few topics. Glad to see First Tennessee CEO Bryan Jordan and EVP Chris Van Steenberg as well as many CBA Committee Members from these banks.



CBA Hosts CFPB, Digital, Fair and Responsible Banking and Risk Committees

Over the past week, CBA hosted several of our committees in Washington, D.C., including our CFPB, Fair and Responsible Banking, and Risk Committees as well as our Consumer Complaints Subcommittee. Additionally, our Digital Channels Committee met in New York for its fall in-person meeting. Here are a few of CBA’s top takeaways from this round of meetings:


  • Burdens posed by unnecessary, overly complex regulations are still an issue for many banks;
  • Banks are working diligently to ensure proper controls are in place to identify early warning signs in complaints and in human resources; and
  • Many banks are reexamining how they authenticate a customer’s identity and exploring new processes for verification.


Special thanks to those who participated in our committee meetings this past week, including CFPB Committee Chair Cindy Reeves of Frost and CFPB Committee Vice Chair and Consumer Complaints Subcommittee Chair Tangie Holland of Regions and CFPB Committee and Consumer Complaints Subcommittee members LeeAnn Fabian of U.S. Bank, Sophia Garza of Woodforest, Carol Hunley of Ally, Michelle Hutchcroft of BMO Harris, Lynn Imagna of M&T, Brian Larkin of Capitol One, Marc Lavoie of TD Bank, Tom Loveday of Charles Scwab, Ron Manzi of Charles Schwab, Kevin Ognibene of Sallie Mae Bank, Jeevan Rego of Citizens Bank, Emilio Revilla of Capital One, Garry Seligson of Citizens, Susie Smith of Frost, Sean Weiner of SunTrust and Kelly Wogan of Huntington; Digital Channels Committee Chair Mike Bernard of Webster Bank, Vice Chair Josh Winstead of EverBank and Committee Members Kristy Brandon of Comerica, Shauna Brown of USAA, Allison Carpentier of Woodforest Bank, Alex Carriles of BBVA, Kelly Dakin of Santander, David Herbison of Banner Bank, Rick Jaros of TD, Ravi Kumar of CIT, Mary Kate Loftus of HSBC, Meredith McCormick of Bank of America, Jason Plotner of WesBanco, Patty St. Clair of Rockland trust, Jeremiah Stephenson of First Tennessee, Cindi Tetrault of Commerce and Greg Waltz of TCF; Fair and Responsible Banking Committee Chair Staci Glenn Short of Huntington, Vice Chair Christina Speh of TD, and Committee Members Brad Blower of American Express, Christa Carter of BMO, Mary Beth Caudill of Union Bank of Richmond, Jennifer Creger of Crescent Bank & Trust, Diana DiPronio of MUFG Union Bank, Lorraine Faust of IBERIABANK, Jeff Jaffee of Bank of the West, Josh Laguerre of United Bank, Greg Lutz of Ally, Danielle McCollian of Citizens, Sean McGuire of TCF, Caren Puckett of SunTrust, Ruthann Redmon of BBVA Compass, Martin Ricks of Synchrony, Jim Riley of HSBC, Nicholas Roesler of U.S. Bank, Mark Schultz of Capitol One, Robert Sims of Hancock Whitney, Ron Spann of Chase, and Cecil Williams of Regions; and Risk Committee Chair Maria Leonard of Citizens, Vice Chair David Mehrle of Huntington and Committee Members Alison Holt-Fuller of Santander, Anne Chapin of Wells Fargo, Bill Simpson of Regions, Dawn Price of PNC, Harsha Kapur KeyBank, Jack Wixted of SunTrust, Jennifer Ruggiero of M&T Bank, Jessica Mobley of USAA, Matthew Macia of TIAA, Ricardo Serrano of BBVA, Rob Pedersen of Sallie Mae, Shelley Brown of Woodforest Bank, Wayne Stone of IBERIABANK, Zah Gonzalvo of Flagstar, Nicole Barr of Union Bank and Trust, Brian Hankins of U.S. Bank and Matthew Boss of TD.


Thank you to those who met with our committees, including Scott Fisher of Treliant Risk Advisors, Sarah Welch, Andrew Hovet and Hank Israel of Novantas, Jessica Turner and Keith Douglas of MasterCard, Philip Aquilino and Brian West of Boston Consulting Group, Kitty Ryan of Buckley Sandler LLP, Ilmeda Newton of Fraud and Identity Solutions, Luke Brown of the FDIC, Nida Davis and Carol Evans of the Federal Reserve, Deb Peery and Paul Reymann of the OCC and Tim Lamber, Patrice Ficklin, Christopher Johnson, Scott Steckel and Derek Standarowski of the CFPB.   


The Fair & Responsible Banking Committee heard a briefing from CBA President & CEO Richard Hunt during its in-person meeting this week in Washington, D.C.


This week, the OCC's Deb Peery (center, left) and the Fed's Nida Davis (center, right) spoke with CBA's Risk Committee during its meeting in Washington, D.C.



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Stephen Squeri was named CEO of American Express. Previously, Stephen served as vice chairman and group president of Amex’s global corporate services group. He will succeed Ken Chenault who will retire after 17 years as CEO.