View from CBA May 24, 2013

May 24, 2013

Bernanke and Lew Testimony

Two big sound bites caught my attention this week and no, it was not the IRS controversy. They came from Federal Reserve Chairman Ben Bernanke and Treasury Secretary Lew.

Bernanke on concerns about financial stability: "I would say that (concern) has increased a bit. We have greatly increased our monitoring and attention to these issues ... to ascertain both whether there is a sign of frothiness or bubbles and moreover what exposure there is in the sense of high leverage or other kinds of vulnerabilities if a frothy asset price were to reverse, what implications would that have for the broader economy."

From American Banker: "It's a very difficult tradeoff because, as I mentioned, a weak economy means low interest rates, which creates some of the same problems, and moreover, a weak economy means worsening credit quality, for example, and that too has financial stability implications," said Bernanke. "There are tradeoffs and difficult judgments to make."

I remember hearing similar remarks in 2008... Meanwhile, a public official finally spoke candidly about small banks:

"What I'm worried about is have we taken into account the measures that prevent systemic risk from being the kind of threat it was in 2008? Size is one factor, but size is not the only factor. I think we have to take into account all the factors that together add up to systemic risk... Small and medium-sized banks are not without some element of systemic risk."
- Treasury Secretary Lew

CFPB Radar: Cordray vote in July

  • Cordray's confirmation vote will likely be held in July, with the possibility of filibuster reform if the 60 vote threshold for confirmation is not met.
  • We are hearing from banks that some long-delayed final exam reports are starting to trickle in. While we still have concerns surrounding exam timelines, we hope this is an indication the logjam is finally breaking and the process will be expedited in the future.
  • Tuesday is the comment deadline for the proposal to define larger participants of the student loan servicing market.

Banking on Youth Competition - Grand Finale!

We are excited to reach the conclusion of this year's Banking on Youth competition which connects promising young entrepreneurs with the banks and guidance to help make their dreams a reality. The CBA Foundation and Ashoka’s Youth Venture will host the Pitch-Off for our six finalists at the Ashoka Future Forum at Washington, DC’s Newseum. Competition judges include:

  • Mark Rendulic, Retail Banking at First Niagara Bank, CBA Board Member and Executive Vice President, Chair of the CBA Foundation
  • Leena Im, Office of Financial Education at the CFPB
  • Steve Zeisel, Executive Vice President and General Counsel at CBA
  • Erica Opstad, Vice President and Manager, Office of Corporate Citizenship & Financial Education at U.S. Bank and
  • Lauren Begham, Food Recovery Network (2012 Grand Prize Winner).

The national finalists will compete for the Grand Prize of $15,000 and the Audience Choice Award of $5,000. Learn more about them and our 29 regional winners at www.bankingonyouth.org.

Membership News

CBA is excited to welcome our newest corporate member, Toyota Financial Savings Bank of Henderson, NV. Thanks to Bill Jensen of Chase for connecting CBA with Toyota, and to Holly Walters, Chief Risk Officer & Chief Technology, for her leadership in joining CBA Family.

This week, CBA’s Education Funding Committee visited Washington to meet with key Congressmen and senior staffers. At CBA headquarters, the Committee discussed pending legislation that will affect student loan interest rates, student loan servicing issues and ongoing efforts to secure options for repayment flexibility.

We are pleased to announce Jan Woolsey, Senior Vice President, Manager, CRA Strategy and Operations at Union Bank has taken on the role of Vice Chair of CBA’s Community Reinvestment Committee.

Congratulations to Mark Erhardt on being named Senior Vice President - Retail Product Management at Fifth Third.