Richard's Rapid Fire - September 13, 2019

September 13, 2019
CBA Leadership Summit 2019 was a success! We had a wonderful, action-packed two days with Committee Chairs, Vice Chairs and our Board of Directors. While everyone was in town, we met with FDIC Chairman Jelena McWilliamsCFPB Leadership and the White House economic team.
Most importantly, CBA celebrated our 28-year CBA veteran and General Counsel Steve Zeisel’s retirement with the Zeisel family. 

Cajun Thoughts: CBA LEADERSHIP SUMMIT 2019 The CBA Leadership showed their love and support for our Steve Zeisel at the CBA Leadership Summit annual dinner. In a major announcement, we have renamed the Committee Award distributed to the group with the most substantive dialogue, meetings with regulators and participation to be the Steve Zeisel Committee Award. CBA LIVE 2020 will showcase the first winner! ... ARTICLES THIS WEEK Three articles caught my eye this week: Chase lowering forecast estimates and Charles Schwab laying off about 600 employees - both due to lowering interest rates and inverted yield curves. Also, M&T Bank said they are not opposed to a merger of equals ... KIRAN ANALYTICS SUMMIT Great to see CBA Diamond Sponsor Kiran Analytics President Jim DeLapa and VP, Sales & Marketing Kerim Tumay at their annual summit in San Diego - the site of CBA LIVE 2020 taking place March 23-25, 2020. I was joined on stage by Chief Retail Banking Officer Jennifer Upshaw of Synovus, a member of CBA's Mid-Tier Retail Executive Forum. She was recently promoted to Chief Retail Banking Officer, effective May 6, 2019, moving from her role as Group Executive, Marketing ... E. WARREN WAR WITH OBAMA TEAM Good story in POLITICO - This reporter finally got it right! Democrats were the ones who prevented Elizabeth Warren from being the head of the CFPB, NOT Republicans or banks. I always said she at least deserved a vote.




Nitin Mhatre Takes CBA Board Gavel, Other Leadership Summit Updates: I loved having our Board of Directors and Committee Chairs and Vice Chairs in town for leadership transitions, business discussions and meetings with the White HouseFDIC and CFPB.

CBA elected Nitin Mhatre, Executive Vice President, Head of Community Banking at Webster Bank, as its Chairman of the Board of Directors and Dennis Devine, President of Consumer Banking at KeyCorp, has been named Chair-Elect. We are also glad to see Brad Conner, Vice Chairman, Consumer Banking at Citizens re-elected to CBA Board of Director’s after wrapping up his three-years of service on the Admin Committee.
Incoming Chairman Nitin Mhatre of Webster Bank accepted the gavel from Immediate Past Chair Todd Barnhart of PNC Bank. Todd did an outstanding job as Chair and will remain on the Board as Immediate Past Chair. Dennis Devine of KeyBank was elected as Chair-Elect. What an action-packed two days and exciting time at CBA HQ.
Check out our announcement about the upcoming year and listen to Nitin in the hot seat on our Suite 550 Podcast.
During the Leadership Summit, we said thank you to the following outgoing committee chairs:
  • Sue Whitson, BMO Harris Bank, Community Reinvestment Committee
  • John Vidovich, Discover, Education Funding
  • Christina Speh, TD Bank, Fair & Responsible Banking Committee
  • Gail Gandy, Wells Fargo, Small Business Banking Committee
  • David Mehrle, Huntington Bank, Risk Committee
  • John Jordan, Bank of America, Talent Management Committee
Finally, the Board approved new legislative and regulatory priorities for Fiscal Year 2020:
CBA Priorities:
CBA's full list of Board Members for the upcoming year is available here.
Reception & Dinner
Below are some photos taken at the Leadership Summit reception and dinner Tuesday night.
CBA Team pictured with the Zeisel family and Flat Steve.
2019 Tem Wooldridge Award Winner Angela Conti of TD Bank spoke about her experience at CBA Executive Banking School and the lasting memories she created there.
CBA congratulated CBA Community Reinvestment Committee Chair Sue Whitson of BMO Harris (Right) on her retirement. Sue has been an integral part of the team for many years, helping the Committee work through many tough issues and taking on a leadership role at a critical time in CRA history. CBA recognized her with an American Flag that was flown over the Capitol in her honor.




CBA’s Talent Management Committee met for their annual in-person meeting on Thursday to discuss all things HR, talent retention, development and more. Committee members heard from Beth Kaufman and Amit Kumar of CBA Associate Member Boston Consulting Group about talent trends and the employee experience, and also from CBA Associate Member Bridgeforce. The Committee roundtable discussion covered topics such as competency framework, sales compensation strategy and other trends in talent management.


FDIC 19th Annual Bank Research Conference: Below are key takeaways from Chairman Jelena McWilliams' remarks at the FDIC's 19th Annual Bank Research Conference:
  • Scholarly research provides a sound platform for judgments that guide public policy; policy choices should align with academic research that has been vetted. This conference presents an opportunity to examine the most important topics. More than 400 papers were submitted for consideration at the conference.
  • The Chairman conducts monthly meeting with research staff- these are economic lunches, and she uses these lunches to learn about cutting edge research topics.
  • She emphasized the role of research in rulemaking and determining the effect of proposed rules; here, the FDIC has a leg-up on data, as the FDIC’s data is the lifeblood of banking.
  • When asked whether the FDIC weights macro and micro effects in developing regulations, she emphasized the FDIC has to look at the size and type of bank to measure the overall impact to systemic risk and financial stability. 
  • She clarified that tailoring does not mean deregulation. It means aligning appropriate regulations with different sizes of banks. 
  • When asked whether there is interest for replacing regulatory ratios with a capital ratio, she indicated “yes” for community banks. Additionally, a more simplified capital ratio for midsize and regionals is something the FDIC is considering. 
  • Remainder of Q&A focused on whether the FDIC is looking at exposure for leveraged lending.The Chairman has examined data on exposure at banks, and found the overall exposure is small for small. 
  • The problem is that exposure can’t be measured as easily at non-banks- who is buying the funds? Are they pension funds, and are banks involved?
  • The Chairman emphasized policymakers must be looking to indirect exposure to collect data for more effective regulation. 
  • The FDIC is not lacking data per se, but what the agency is lacking is data to measure the greater impact on the system from non-banks. Indirect exposure for leveraged lending is a major concern for the Chairman.
CFPB Updates No-Action Letter Policy, Trail Disclosure Policy & Compliance Assistance Sandbox: On Tuesday, the CFPB announced major initiatives aimed at reducing regulatory uncertainty as financial institutions aim to develop innovative products and services.
CFPB Issues Policies to Facilitate Compliance & Promote Innovation
Speaking at a town hall in Atlanta, GA, CFPB Director Kathy Kraninger unveiled three new policies aimed to promote innovation while facilitating compliance: the No-Action Letter (NAL) Policy, Trial Disclosure Program (TDP) Policy and Compliance Assistance Sandbox (CAS) Policy. These new policies follow proposals released last year that CBA commented on in full.
  • (1) Information that must be included in a NAL application:
  • In addition to basic applicant information, the NAL applicant must describe the product or service in question, the potential consumer benefits and risks, the statutory provisions in which a NAL is requested, if the applicant wants FOIA protection, and what regulators the applicant wants the Bureau to coordinate with.
  • (2) Factors the CFPB intends to consider in assessing applications for a NAL:
  • The Bureau highlighted the quality and persuasiveness of the application as well as the extent to which granting the application would be consistent with Bureau enforcement and supervision priorities; an assessment of litigation risk; and Bureau resources.
  • (3) Standard procedures the CFPB will use when issuing a NAL:
  • In granting a NAL, the Bureau will establish the NAL is limited to the recipient and does not apply to other persons, entities, products, or services; does not establish a legal conclusion about the product or service, nor constitute an endorsement; the Bureau will not make supervisory findings or bring enforcement actions against the NAL recipient under its UDAAP authority; and the recipient may reasonably rely on the NAL as long as they comply in good faith.
  • (4) Procedures the CFPB will use when modifying or terminating a NAL:
  • The Bureau will allow for modification of NALs, and only expects termination of NALs to be done in rare circumstances. The Bureau will not apply retroactive liability to terminated NALs, unless the recipient failed to adhere to the NAL in good faith. Additionally, the Bureau plans to notify the recipient of the possible termination and allow for the recipient to respond or modify its conduct.
  • (5) Alternative application, assessment, issuing procedures the CFPB may use
  • (6) How the CFPB intends to coordinate with other regulators:
  • The Bureau notes it will enter into agreements whenever practicable to coordinate NALs with similar forms of compliance offered by State, Federal or international regulators.
  •  (7) The CFPB’s intentions for disclosure of information pertaining to a NAL:
  • The Bureau intends to keep information submitted as private as confidential in accordance with Dodd-Frank, FOIA, and the Disclosure Rule.
Many of the changes to the NAL were advocated for by CBA in comments submitted at the beginning of this year to the Bureau. In addition to the new NAL policy, the Bureau issued its first NAL under the new policy in response to a request by the Department of Housing and Urban Development (HUD) on behalf of more than 1,600 housing counseling agencies.
The NAL is aimed at allowing for HUD and counseling agencies to enter into agreements that fund counseling services that previously raised Real Estate Settlement Procedures Act concerns. It states the Bureau will not take supervisory or enforcement actions against certain HUD-certified counseling agencies that have entered into certain fee-for-service arrangements with lenders for pre-purchase housing counseling agreements. The NAL also functions as an example of how an organization may be able to apply for a NAL on behalf of its membership or other interested stakeholders.
In coordination with the release of the NAL, the Bureau also established the Compliance Assistance Sandbox (CAS) to enable testing of a financial product or service where there is regulatory uncertainty. The CAS establishes that after the Bureau evaluates a product or service for compliance with relevant law, an approved applicant that complies in good faith with the approval will have a “safe harbor” from liability for the specified conduct. Approvals under the new CAS policy will provide protection under the Truth in Lending Act, Electronic Fund Transfer Act, and Equal Credit Opportunity Act.
The Bureau also released a new Trial Disclosure Program (TDP) that is aimed at entities seeking to improve consumer disclosure by allowing them to conduct in-market testing of alternative disclosures for a limited time. The updated TDP also streamlines the application and review process to allow for more entities to take advantage of the program.
CBA commented on the TDP program as well in 2018 and have seen many of the changes we advocated for adopted.
The American Consumer Financial Innovation Network (ACFIN)
Finally, the CFPB in coordination with multiple state regulators launched the American Consumer Financial Innovation Network (ACFIN) to enhance coordination among federal and state regulators looking to facilitate innovation. While all state regulators are invited to join ACFIN, the initial members are the Attorney General Alabama, Arizona, Georgia, Indiana, South Carolina, Tennessee, and Utah.
ACFIN is built to enhance shared objectives such as competition, consumer access and financial inclusion, and should promote regulatory certainty for innovators.
CBA Writes HFSC on Student Lending: In advance of the House Financial Services Committee hearing examining student debt and non-bank student loan servicers, CBA wrote Committee leadership to discuss needed student lending reforms.
As lawmakers look for solutions to help borrowers get out from under the growing and worrisome student debt crisis, it is important to have a clear understanding of the crux of the problem. Student loan debt in America currently stands at $1.58 trillion. The federal government dominates the market, holding an astonishing 92 percent or $1.44 trillion of this debt. With one in five federal borrowers seriously delinquent or in default and many experiencing increasing loan balances post-graduation, it is clear federal student loans are driving this crisis.
Private student loans, by comparison, have a successful repayment rate of approximately 98 percent and CBA members discharge student loans in the case of borrower death or disability.
A copy of CBA’s letter to the committee is available here.
CBA also wrote the committee discussing various student loan related bills which is available here.
In the letter, CBA called on Congress to address the cost of college, which according to the Federal Reserve Bank of New York is driven in part by federal over-lending. Improving up-front disclosures and bringing them in line with those currently offered by private lenders which detail the terms and conditions of federal loans should be a first step.
Earlier this year, CBA requested the Department of Education and Consumer Financial Protection Bureau to work together to improve federal loan disclosures. A copy of that letter is available here.
CBA also discussed the need for the committee to oppose state-level student lending laws that reduce the ability of federal agencies to oversee financial institutions and create an intersecting web of conflicting state provisions.
CBA members include private sector lender who make the majority of non-federal, private student loans.
Learn more about CBA’s work to improve the student loan marketplace here.
Federal Reserve Gov. Michelle Bowman to Serve Full Term: By a vote of 60-31, the Senate on Thursday agreed to extend Fed Gov. Michelle Bowman's partial term to a full 14-year term. Now serving past the partial term expiration at the end of January, Bowman is the first Fed governor to fill the Community Bank seat.


OCC Approves Fifth Third Bank’s National Charter Application: The OCC on Wednesday approved Fifth Third Bank’s application to convert from a state bank to a national bank and operate with the OCC as its primary regulator rather than the FedThis charter allows the bank to expand beyond its current 10-state territory and bank officials said it will "better align regulatory supervision with its expanding national business model by streamlining its operations under one uniform set of laws and regulations." The decision letter is available here
Regions’ Tangie Holland Named to Momentum Leadership Program: CBA CFPB Committee Chair Tangie Holland of Regions Bank was selected as a member of Momentum’s Leadership Program Class of 2019-2020. Momentum is Alabama’s highly competitive, premier women’s leadership program featuring a diverse group of senior-level leaders from a variety of organizations. Congratulations, Tangie!
TD Bank to Launch Financial Job Market ProgramTD Bank recently announced it will begin a program in 2020 that will help financial professionals reenter the job market after taking a break of two years or more. The 16-week program will begin in New York City.
U.S. Bank Acquires POS SystemU.S. Bank’s digital expansion continues with the purchase of talech POS, a small and medium-sized business point-of-sale (POS) software company. This is the first acquisition with new Chief Digital Officer Derek White, who noted it makes sense for the bank as it continues to streamline operations for businesses.
JPMorgan Chase Lowers 2019 Net Interest Income OutlookJPMorgan Chase CEO Jamie Dimon on Tuesday announced a lower forecast for the bank’s 2019 net interest income than he originally gave in mid-July. Dimon had stated $57.5 billion and now predicts a number closer to $57 billio, about a $500 million drop. Other CBA member banks Wells Fargo and Citi also tempered their projections for net interest income, suggesting lower interest rates and inverted yield curves affect banks’ ability to make as much money.



Todd Olson Named EBS Year-One Lead: Succeeding CBA EBS veteran and former Team CBA member Mike Allen of First FinancialTodd Olson of U.S. Bank is the new Year-One Lead, starting with EBS 2020! Todd is a 2012 graduate of CBA Executive Banking School and joined the Year-One faculty in 2017. He has fully demonstrated his expertise and passion for educating the next generation of banking leaders, and we are fortunate to have him on board.
As Vice President of Strategy and Customer Experience at U.S. BankTodd leads the Change Management Office and In-Store/On-Site Branch Strategy in the Branch and Banker Engagement Team. He is also responsible for the liaison leadership of the in-house CBA MarketSim program. Todd helped to begin the Business Banking focus on the In-Store/On-Site Banking Division of over 900 branches in 2011.
Happy Birthday to Bank of the West CEO Nandita Bakshi: Happy belated birthday to Bank of the West CEO and former CBA Board Member Nandita Bakshi