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View from CBA June 27, 2014
CBA/AOL Finance Optimism Index Increases Slightly for May
The CBA/AOL monthly Finance Optimism Index has found Americans’ finance optimism improved slightly in May to -4.0. This is an improvement of +0.8 from April. Perceptions around personal financial future and consumer’s current financial situations remained relatively steady. The largest change in this month’s findings came from consumers who reported positive news about Americans’ personal finances, moving upwards six points. This comes on the heels of better job numbers, and the approaching summer season where employment generally increases with seasonal jobs. Together with the CBA, AOL has been conducting research to better understand consumer attitudes about their finances. The Index is measured continuously with results calculated and reported monthly at FinanceOptimism.org.
Senate Flip Could Shape Banking Committee
Many believed Sen. Thad Cochran (R-MS) was in danger of losing his seat on Tuesday during a primary election runoff with a TEA Party opponent. Cochran pulled out an upset victory and also set in motion the possibility of new leaders for Senate committees if Republicans gain control of the upper chamber. Currently, Cochran serves as Ranking Member of the Senate Agriculture Committee, and a Republican majority is likely to mean he would claim the Chair of the Appropriations Committee. This would then place Sen. Richard Shelby (R-AL), who currently serves as the Appropriations Committee’s top Republican, in line to be the Chairman of the Senate Banking Committee. Shelby previously chaired the panel from 2003 to 2007 and has two years left to lead the Committee before he reaches a six-year term limit. We will be closely monitoring this fall’s elections, and how they may impact our industry.
Obama Justice Appointee May Have Banks in Her Sights
Leslie Caldwell was appointed by President Obama and confirmed by the U.S. Senate to serve as Assistant Attorney General for the Department of Justice’s Criminal Division. Ms. Caldwell previously erved as the Director of the special task force created to investigate the collapse of Enron from 2002-2004. She also has a history of prosecuting securities fraud in New York and San Francisco on behalf of the Federal Government. She will be turning her sights to where many believe her predecessor failed, prosecuting financial institutions for the economic meltdown, and she uses bareknuckle tactics to get the job done. In fact a 2002 USA Today article described her this way: “…as a public prosecutor, she's a terror.” With Attorney General Holder and others saying banks will be held accountable, expect Ms. Caldwell to be leading a very fierce charge.
CBA Members Shine in 2014 Survey of Bank Reputations
American Banker Magazine is out with their annual survey of bank reputations, and this year’s results shows consumers are beginning to warm towards the industry. No longer at the bottom of industry rankings, banks are seen more favorably than the media, energy and telecommunications sectors. The survey cites the passage of time and trust building efforts for these results.
CBA is proud to say every one of the 25 large banks ranked highly by noncustomers, except for Ally, is a CBA member and improved over last year. A dozen of those banks improved their standing enough to move out of the zone where their scores indicate a weak or vulnerable reputation. When evaluated by their own customers, 18 of the 25 bank brands on this year's survey garner scores of 70 or higher on the magazine’s 100-point scale. This indicates a strong or robust reputation. It should also be noted, every single bank ranked in the top 25 of customer evaluations is a CBA member institution. Congratulations to our members for their commitment to improving institutional reputations, the reputations of the retail banking industry, and most importantly – remaining committed to the American consumer.
Cybersecurity – Coming in Hot
Cybersecurity remains a hot topic according to a recently released Gallup poll. Just 21 percent of Americans have “a lot of trust” in the businesses or companies they regularly interact with to keep their personal information secure. However, when asked how much they trust a list of nine industries to keep their personal information secure, banks and credit card companies rank highest on the list, with 39 percent of consumers placing a “lot of trust” in them.
On Tuesday, June 24, 2014 POLITICO Pro Financial Services held a discussion on “Preventing third party cyber security attacks,” which included a panel of banking, technology and cybersecurity experts. Participants agreed there are three major challenges ahead in terms of cybersecurity: properly allocating resources to the most critical threats, managing the information overload, and eradicating all the weak links in a supply chain. Cybersecurity was the subject of much discussion at the recent in-person meeting of CBA’s Board of Directors, and remains a significant issue for not only CBA’s members, but all businesses throughout the new digital economy and our consumers. CBA continues to work through a joint-trades partnership to find common ground with retailers on combating cyber threats.
Also this week, the Federal Financial Institutions Examination Council (FFIEC) has launched a websiteon cybersecurity. The site is a central repository for current and future FFIEC-related materials on cybersecurity.
American Express has hired Laureen Seeger as its new General Counsel. She will oversee their legal, compliance and ethics and corporate secretary organizations. She will also assume responsibility for the American Express’ federal and state government affairs later in 2014.