View from CBA May 9, 2014

GSRBM Applications due Next Week

The deadline to submit your application to the CBA-BAI Graduate School of Retail Bank Management (GSRBM) is this coming Thursday, May 15, 2014. GSRBM provides a rigorous, boutique education for ambitious bank officers over the course of three ten-day summer sessions. Speakers this year include: Carrie Tolstedt, Senior Executive Vice President of Community Banking at Wells Fargo, who will address GSRBM seniors regarding the executive perspective and leadership in successful bank management; and Chuck Kim, ?CFO & Executive Vice President at Commerce Bancshares, who will give the juniors a CFO view of Commerce Bank. We are proud of two fantastic additions to the 2014 faculty: Chris Low, Chief Economist for FTN Financial, who will lead the Economic Issues class for seniors on the state of the economy; and Former Governor of the Federal Reserve Betsy Duke, who previously served as a GSRBM faculty member, will lead a class on Interest Rates and the Federal Reserve. Apply today!

Student Loan Refinancing Legislation Introduced

Sen. Elizabeth Warren (D-MA) introduced the “Bank on Students Emergency Loan Refinancing Act” this week. Taking a page from the playbook of some private lenders, the bill would allow all eligible Federal Family Education Loan Program and direct student loan borrowers to refinance their high-interest loans down to rates offered to new federal borrowers in the 2013-2014 school year under the Bipartisan Student Loan Certainty Act. This would also apply to private student loans.
Outstanding federal student loan debt is now more than $1 trillion. One in seven borrowers defaults on federal student loans within three years of beginning repayment. In total, 30 percent of Federal Direct student loan dollars are in default, forbearance, or deferment. Contrast these federal figures with private student loans which, thanks to strong underwriting standards, carry only a 3 percent delinquency rate according to a study released by MeasureOne. We still are waiting on the Department of Education to disclose the default rates on their Parent Plus program, which we believe to carry a very high default rate. Prior to Sen. Warren and others attempting to retroactively change the private student loan market, we should know just how poorly the much larger federal loan program is performing.

Keeping Customers in the Era of the New Bank

This week presenters from Novantas and First Citizens Bank participated in a CBA webinar focused on the transformation of how consumers bank and the realignment of the branch network. The good news for our members: customers are transacting in new ways and often prefer lower cost channels such as online, ATM, and mobile, compared with the staggering costs of maintenance, renovations, and relocation associated with large physical branches. Weighing these factors, retail banks can tailor their strategy in an individual market to maximize service to the consumer and keep costs in check. View this program and others in our webinar library.