Richard's Rapid Fire - October 27, 2017

Thoughts on Senate Vote Repealing CFPB’s Arbitration Rule

With a deciding vote by Vice President Mike Pence, the Senate passed a resolution overturning the CFPB’s arbitration rule by a vote of 51 to 50. Overturning the CFPB’s arbitration rule ensures consumers retain the tools they need to receive relief without going through long, drawn-out, costly court proceedings – where no one benefits except trial lawyers. The CFPB’s own study even verifies arbitration is more effective when it comes to helping consumers. The vote’s outcome just goes to show when all banking trade associations come together, good things can happen. To recap the event, I joined CNBC’s Kayla Tausche to discuss the outcome on Nightly Business Report, which you may view here.

Here a few interesting tidbits:

• Senator Lisa Murkowski (R-AK) was on the fence, but ended up siding with consumers and voted to repeal the CFPB’s arbitration rule;
• Senator John Kennedy (R-LA), the newest Republican on the Senate Banking Committee, voted with Senator Lindsay Graham (R-SC) and Democrats to uphold the CFPB’s rule;
• Following the vote, CFPB Director Richard Cordray said “Wall Street won and ordinary people lost.” This is an unnecessary and divisive comment.

We thank Senate Banking Committee Chairman Mike Crapo (R-ID) and Majority Leader Mitch McConnell (R-KY) for their work in the U.S. Senate as well as House Financial Services Committee Chairman Jeb Hensarling (R-TX) and Congressman Keith Rothfus (R-PA) for their efforts in the House of Representatives on this important consumer matter.

Watch CBA's Richard Hunt on Nightly Business Review discussing this week's Senate arbitration vote.

Office of Financial Research: Replace Arbitrary $50 billion SIFI Threshold

In a new report by the Office of Financial Research, agency Director Richard Berner concluded Dodd-Frank Act’s $50 billion SIFI threshold should be replaced by an indicator test. This report confirms what CBA has long believed: designating risk strictly based on the size of a financial institution does not make sense and it harms consumers. Allowing regulators to take a big-picture view of risk by looking at a financial institution’s business model instead of a simple asset threshold is more telling and can reduce unnecessary compliance burdens that limit credit availability to consumers. As Congress debates financial reform, we encourage members to make meaningful changes to current SIFI policy.

Be a Part of CBA LIVE 2018

In an environment where consumers order groceries, seek medical advice and earn advanced degrees online, how will banking transcend conventional thinking to remain competitive?  Join us for CBA LIVE 2018: Beyond the Bank to be part of this conversation with senior leaders and decision makers from the industry. Register now to take advantage of our early bird rates. Want to be part of the action in Orlando? Check out our exhibitor and sponsorship opportunities.  Hurry!  Our exhibit hall sells out annually.  

Membership Spotlight: Zions Made 300+ Interest-Free Loans to Employees affected by Harvey

Over the past few months, CBA members have provided tremendous assistance to those affected by natural disasters. Recently, American Banker reported Zions Bancorp made over 300 interest-free loans to employees by Hurricane Harvey, totaling $5 million. This is a heartening development, and Zions Chairman and CEO Harris Simmons should be proud to preside over such an employee-centric initiative.

IBERIABANK Banks Inks Second Deal in 2017

Next up in M&A, IBERIABANK inked a deal with Florida-based Gibraltar Private Bank & Trust, which holds $223 million in assets. Should the deal get regulatory approval, it would be the second acquisition by IBERIABANK this year. In July, the bank finalized an agreement for Sabadell United Bank to the tune of $1 billion. M&A activity is becoming more and more a fact of life in the banking industry.

CBA Day at the Bank: TD Bank Hosts Senator Chris Coons

Last Friday, CBA Board Member Michael Rhodes of TD Bank and members of his team hosted Senator Chris Coons (D-DE). During the meeting, the Senator learned more about TD’s cards operations in Delaware and discussed issues related to fintech, the Community Reinvestment Act, and small business lending. CBA’s Tiffany Haas was delighted to help facilitate the meeting.  Contact us if you would like assistance in scheduling a Member of Congress to visit your bank.

TD Bank in Delaware hosted Sen. Chris Coons (center right) last week for CBA Day at the Bank.

CBA Education Funding Committee and Internal Audit Working Group Visit D.C.

CBA’s fall in-person meetings continued this week with our Education Funding Committee and last Friday with our Internal Audit Working Group.

Here are a few of CBA’s top takeaways from these meetings:

• Cybersecurity was identified as a top industry risk, including overall third party and data security risks;
• The Trump administration and Members on Capitol Hill recognize the current problems with federal student lending and many are open to reform; and
• A draft Higher Education Act Reauthorization bill could be expected as early as December, and it will likely expand lending opportunities for the private market.

Both Committees joined us at CBA World Headquarters, and our Education Funding committee made a trip to Capitol Hill to visit with a host of congressional offices, including Chairwoman of the House Committee on Education and the Workforce Congresswoman Virginia Foxx (R-NC), Congresswoman Karen Handel (R-GA), Congressman Phil Roe (R-TN), Congressman Bradley Byrne (R-AL), Congressman Brett Guthrie (KY-2), Congressman Rick Allen (R-GA), Senator Pat Roberts (R-KS), and staff members from the House Budget Committee, Senate HELP Committee Majority Staff, and the offices of Congressman Glenn Thompson (R-PA), Congressman Drew Ferguson (R-GA), Senator Tim Scott (R-SC), Congressman Luke Messer (R-IN), Congresswoman Elise Stefanik (R-NY), Congressman Paul Mitchell (R-MI), Senator Bob Casey (D-PA), Senator Orrin Hatch (R-UT), Senator Rob Portman (R-OH), Senator Bill Cassidy ( R-LA), Senator Joe Manchin (D-WV), Senator Todd Young (R-IN) and Senator Michael Bennett (R-CO).

Glad to see Education Funding Committee Chair John Vidovich and his colleague Mary Dwyer Pembroke of Discover, Vice Chair Christine Roberts and her colleague Michael McFarlane of Citizens, Paul Wozniak of College Loan Corporation, Dan Meyers of Cognition Financial, Naimesh Patel of PNC, Paul Thome  and Tim Morrison of Sallie Mae, Mark Smith of SunTrust and Tom Levandowski of Wells Fargo; Internal Audit Working Group Members Michael Pagan of TD, Julie Dennis of Chase, Brian Dunn of Flagstar, Harry Farver of Huntington, Jeremy Harlow of American Express, Steve Hizak of United, Joseph Sullivan of M&T, Andrew Tynan of TIAA/EverBank, Dan VanSciver of Sallie Mar, Michelle Winter of BB&T, James Madias of Synchrony, Mark Weintraub of Wells Fargo and Mike Siraj of Woodforest.

Thank you to Jessica Rodgers and Nazir Vellani of Ernst & Young, Melissa Greenfield of the OCC, Dr. Wayne Johnson, Michael Dean and Charles Patterson of Federal Student Aid and Kenneth Megan of the Bipartisan Policy Center for meeting with our committees.

Members of CBA's Education Funding Committee met this week in Washington, D.C.

Our Internal Audit Working Group met last week at CBA World Headquarters.

CBA Welcomes Baker Hill as an Associate Member

CBA welcomes Baker Hill as CBA’s newest Associate Member for 2018! We are excited to have them as a member of the CBA Family.

Three Things To Know To Be In The Know

Auto lenders brace for losses from Harvey, Irma and Maria

Senate repeals CFPB's arbitration rule

Trump Asks GOP Senators for Show of Hands on Fed Nominee Choices

Lagniappe                 

Happy birthday to former CBA Board Chair Gene Kirby!

Best wishes to Mortgage Bankers Association President and CEO David H. Stevens who will retire at the end of September 2018. It has been a pleasure working with him over the years.