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View from CBA July 18, 2014
CFPB Proposes Publishing Unverified Consumer Complaint Narratives The Consumer Financial Protection Bureau has proposed publishing unverified complaint narratives from unidentified consumers in their Consumer Complaint Portal. Publishing narratives of every unverified complaint will give only the illusion of disclosure. Banks have an obligation to their customers to maintain the confidentiality of their information, making it virtually impossible for a bank to offer a complete response to these narratives. It is the role of the CFPB as the traffic cop to distinguish violations of law from unfounded complaints. Instead, they want to let others figure it out from one-sided and unverified narrative information. This action will ultimately add to consumer confusion, harm industry reputations, and undermine any hope the CFPB may have to be viewed as a fair and honest broker. For an agency which prides itself on being driven by "accurate" data, this is very disappointing. I spoke directly with Director Cordray on this issue on Wednesday July 16, 2014, and CBA plans to coordinate and issue a comment letter with other trades during the 30-day comment period set forth by the CFPB.
GSRBM Kicks Off Next Week
We are excited for this year’s session of the CBA/BAI Graduate School of Retail Bank Management (GSRBM) to kick off next week at Furman University in Greenville, S.C. GSRBM, now marking its 62nd year with 5,095 graduates, offers the banking industry's top talent the knowledge and skills they need to develop into the leaders of tomorrow. Designed and delivered by leading industry practitioners, the program immerses students in real world scenarios experienced daily by retail banks. This year’s freshman class includes 110 students from 32 companies, and takes place from July 20-30, 2014.
CFPB Abandons Consumer Complaint Portal Agreement
The CFPB has nixed its Consumer Complaint Portal Agreement initiative following two drafts which were circulated to a handful of banks. Moira Vahey from the CFPB has stated the Bureau “is not moving forward with the contemplated contract approach,” but “will continue to engage with industry stakeholders to ensure compliance with their legal obligations for securely and appropriately handling consumer complaint information.” This is a major victory for common sense. CBA and others visited the CFPB legal team when the idea was first broached, and raised many objections, including questioning the need for the agreement in the first place.
CBA Participates in Pew Event on Postal Banking
CBA’s Regulatory Counsel, Dong Hong, participated in a panel discussion hosted by the Pew Charitable Trusts on July 16, 2014, looking at the possibility of the U.S. Postal Service (USPS) beginning to offer banking services. The forum followed a January report from the USPS' Inspector General which claimed the USPS is well positioned to provide the services. Dong questioned if the post office were to begin offering financial products and services, would it be as regulated in doing so as banks and credit unions? “As many of you probably recognize, banks face a series of extensive and sometimes overlapping federal and sometimes state regulations,” Dong stated in his opening remarks. “If the post office were to offer financial services would is also face the same regulations?” He also asked who would pay if the fiscally strapped post office faced a large civil fine or other regulatory penalty for some financial services failure. These concerns are a few of the many CBA has expressed in response to the idea of a federal agency, which has lost billions of taxpayer dollars over the years, entering the financial services space. In addition to the panel, Pew had a number of speakers participate throughout the day on this issue including, House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA), Sen. Elizabeth Warren (D-MA), and former House Oversight and Government Reform Committee Chairman Tom Davis (R-VA).
Half of Online Businesses Hit by Hackers
According to a new survey by Kaspersky Labs of 3,900 online retail companies in 27 countries, 48 percent had lost data to hackers in the last 12 months. The survey also found 41 percent of the financial services companies included had lost “some type of finance-related information to cybercriminal activities in the past year.” As a testament to the type of commitment the industry has to consumers, over half of the finance companies said they reimbursed customers for cybercrime losses “without investigation.”
KeyCorp has named David K. Wilson to the board of directors. He is a former official with the Office of the Comptroller of the Currency, holding various positions over his 32-year career. He retired last year.