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View from CBA March 29, 2013
CFPB's "Not Verified" Data
The CFPB today released their expanded consumer complaint database showing more than 90,000 complaints - with half coming from affluent and elderly zip codes. While I applaud the intent of the CFPB to inform consumers on specific types of complaints, their methodology is flawed and actually performs a disservice to consumers. The CFPB in their own press release states:
"Importantly, while the allegations in the complaint are not verified, a commercial relationship between the consumer and the company is substantiated before the complaint is added to the database."
A more prudent process would have allowed the CFPB and the bank to determine if a complaint is indeed valid, and then at that point disclose to the public the number and type of complaints. Call me crazy, but I believe the public should receive accurate information. Worse, the CFPB is now asking the public ("including consumers, analysts, data scientists, civic hackers, and companies that serve consumers") to analyze and "mash" this "not verified" data - may as well ask the public to analyze Elvis sightings at McDonald's.
Can you imagine if the National Institute of Health or Consumer Product Safety Commission released "not verified" data? I'd be curious to know if other agencies release "not verified" data and encourage the public to do their own homework.
Again, we certainly understand the CFPB's intent but the process should be accurate and beneficial to the public.
Student Loan Flexibility
Over the past few months, our government relations team has been working with CBA's Education Funding Committee to address student loan repayment issues. As a result, we penned a letter to regulators acknowledging their increased understanding of private student loan products and suggested measures to assist recent graduates. These measures would provide lenders the opportunity to offer additional flexibility in repayment and at the same time, not adversely affect the safety and soundness of the institutions. This is a big first step, and we hope it will set in motion further conversations on this issue.
Senate Banking Chairman Johnson Will Not Run For Re-election
Senator Tim Johnson (D-SD), Chairman of the Senate banking committee, announced this week his intent not to seek re-election next fall. Senator Johnson’s three decades of service to our country and to the people of South Dakota deserve many thanks. I am joined by everyone at CBA in wishing him and his family well.
The announcement was the starting gun for jockeying and speculation about who will replace Sen. Johnson as Chairman of the Senate Banking Committee when his term comes to an end in two years. Before then, too, many see legislative priorities shifting over the rest of the term. All you tea-leaf readers know a change in chairmanship could impact Basel III, too big to fail, housing reform and other legislation important to our industry. Ohio Senator Sherrod Brown and New York's Charles Schumer are likely contenders if Democrats hold onto the majority in the Senate.
This week, I traveled to Stamford, Connecticut to meet with GE Capital and discuss areas of mutual interest - namely the CFPB. Our Membership Director Liz Terry visited the team at Citi in New York to catch up on our collaboration and help them deepen engagement across our Committees.
New Committee Members
I am pleased to announce our Committee participation continues to grow. Welcome to our newest members:
- Luis Berrios, Compliance Officer, State Farm Bank, CFPB Committee
- Brad Blower, Vice President, Fair Lending, American Express, Fair and Responsible Banking Committee
- Matt Emerson, Senior Vice President, Products & Non-Branch Channels, Bank of Hawaii, Deposits & Payments Committee
- Kunal Kaul, Director, Capital One Financial Corporation, Home Equity Lending Committee
- Ed Kim, Division Portfolio Manager, Consumer Lending Division, Bank of Hawaii, Home Equity Lending Committee
- Chris McGillis, Senior Vice President, CRA Administrator, SunTrust Bank, Community Reinvestment Committee
- Pete Singer, Vice President, Retail Banking Product Management, BMO Harris Bank, Deposits & Payments Committee