View from CBA - June 12, 2015

Student Loan Repayment – The Responsible vs. The Irresponsible
This week, MeasureOne released its latest report on private student lending. Once again, it shows banks are working in a responsible manner with students—roughly 98 percent of loans are in repayment. This news comes on the heels of a New York Times op-ed published last weekend entitled, “ Why I Defaulted on My Student Loans.” An award-winning wordsmith, Lee Siegel attempted to explain away his irresponsible default with a sob story about not wanting to alter his career plans in order to pay back his student loans. What Siegel fails to note is that he has three Ivy-league degrees thanks to those loans. We join Slate’s Jordan Weissmann in calling on the New York Times to apologize for running this regrettable op-ed. I wonder if Mr. Siegel is paying his mortgage, auto or cable bills.
 
CFPB Unveils Final Rule to Oversee Nonbank Auto Lenders
CBA has long asked for a level playing field for bank and nonbank entities in the same market. Last December, CBA asked the CFPB to supervise auto finance companies, some of the largest players in the auto lending and leasing market. On Wednesday, we were pleased to learn the CFPB will begin supervising larger participants starting in August. According to the Bureau’s estimates, their jurisdiction will now include 34 auto finance companies, or approximately 90 percent of the nonbank auto lending and leasing market. (For more on this, see below.)
 
Update on Overdraft?
Two news stories have come out in recent days about the CFPB’s path forward on its overdraft rule— Bloomberg published an article last Friday and Reuters followed up with a piece on Tuesday. While we believe these articles are speculative, CBA continues to urge the CFPB to consider policies that will not limit consumer choice and further reduce the availability of short-term liquidity in a market strapped for viable options. As you may remember the CFPB has delayed its overdraft rulemaking many times, indicating the Bureau is considering their options before issuing a final proposal. Director Corday is scheduled to meet with CBA’s Board at its meeting this month, and we look forward to further discussion.
 
Meeting with Our Members
Team CBA had another busy week meeting our membership. The Education Funding Committee met in Washington for its in-person visit. I met Jamie Warder, President of USAA Bank, in San Antonio to discuss his efforts to lead USAA into the new era. Also, Liz Terry and Kate Larson met with Marc Crudgington, CISO, VP Information Security, Woodforest National Bank while he was in Washington, D.C.  They discussed the different cybersecurity bills circulating and the challenges facing the industry.

Digital Bankers of the Year
Congratulations to Citi’s Heather Cox, USAA’s Christopher Cox, and Bank of the West’s Jamie Armistead on being named to American Banker’s 2015 Digital Bankers of the Year list.
 
Lagniappe
Congratulations to Citizens Bank’s Brendan Coughlin, a CBA Auto Finance Committee member, on being named President of Consumer Lending.
 
What We’re Reading:
Clinton student loan reform plan has Warren stamp
Banco Santander Chief Ana Botín Rethinks Father’s Legacy
College Loans Look Like a Better Deal—for Some Borrowers