Richard's Rapid Fire - September 13, 2019

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.
CBA LEADERSHIP SUMMIT
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 House, FDIC and CFPB.
- 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
- Highlight the Benefits & Soundness of Retail Banks: Consumers are best served within the well-regulated, well-capitalized, safe and sound banking industry. CBA will continue advocating for policies to ensure a vibrant consumer and small business banking sector which provides consumers, including the un- and under-banked, access to a variety of products and services to meet their unique needs.
- Modernize Banking’s Regulatory Framework: CBA will work to modernize banking regulations. This includes creating a bipartisan commission at the Consumer Financial Protection Bureau, modernizing the Community Reinvestment Act and ensuring a level playing field, especially regarding consumer protections, with banks and non-bank financial companies.
- Support Uniform Data Security & Consumer Protections: Banks are regulated by the most stringent data protection standards and are committed to securing customers’ personal information. CBA will continue working with policymakers, regulators and law enforcement to combat breaches and bring about a uniform standard for data protection and privacy throughout the payment system.
- Right-Size Federal Student Lending: CBA will promote common-sense reforms to federal lending programs to ensure the government helps students with the most need while allowing the private marketplace to serve borrowers with means. These reforms will increase options for borrowers, help bring down the cost of college and reduce student debt.
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CBA Team pictured with the Zeisel family and Flat Steve.
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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.
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CBA TALENT MANAGEMENT COMMITTEE
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.
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- 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.
- (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.
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