Richard's Rapid Fire - April 15, 2016

April 15, 2016

Dodd Frank Act and CFPB Come Under Fire

On Thursday, the WSJ Editorial Board recounted the rough couple of weeks the Dodd-Frank Act has had of late.  It all started when a federal judge knocked down a major decision from the Financial Stability Oversight Council in the MetLife case two weeks ago.  And it continued on Tuesday when a federal appeals court panel questioned the constitutionality of the Consumer Financial Protection Bureau.  The judges cited the Bureau’s unconventional governing structure of a single director claiming it lacked historical precedent. Additionally, the court considered the Bureau’s concentration of power and its absence of checks and balances from the executive and legislative branches.  As CBA has said many times, the CFPB should be governed by a bipartisan commission – not by a sole director. The Bureau’s ability to protect consumers and promote fairness and transparency in the marketplace is too important a role to remain unchecked and be at the whim of one individual.

The CBA LIVE planning team met with 360 Live Media to discuss and debrief CBA LIVE 2016: Leadership Unplugged.

WANTED: CFPB Deputy Director

This week, the CFPB announced a number of promotions.  Curiously, the one vital role yet to be filled is the Bureau’s Deputy Director. Only at a federal agency would you see a handful of promotions to assistant roles, and a continued vacancy in the second post.  The last Deputy Director made upwards of $200,000, so one would imagine there is a long list of good, qualified candidates waiting in the wings.  As time continues to pass, we hope Director Cordray is not playing politics and waiting until after the election to fill this important position.

Earnings Reports

It is that time of year again as Q1 earnings reports are starting to be released. This week, the four largest banks released their reports with JP Morgan kicking things off on Wednesday.  On Thursday, Bank of America and Wells Fargo followed suit, and Citi rounded out the top four on Friday. Compared to last year’s figures, JP Morgan Chase, Bank of America and Citi saw their total revenue dip.  Wells Fargo, on the other hand, saw their total revenue jump slightly, from $21.3 billion to $22.2 billion.  It looks like the low interest rate environment combined with historically low oil prices appear to be the driver of changes to this quarter’s numbers.

For a full breakdown of earnings, check out this great chart from the WSJ.

Another Point of View on the Impact of Student Loan Debt

For years, many have argued student loan debt is hindering millennials’ ability to purchase a home.  Surveying more than 3,000 people, Navient Corp. released a report challenging this notion.  Navient reported 38% of individuals, between the age of 25 and 30, who have borrowed for college and earned a bachelor degree or higher have a mortgage.  Alternatively, for those who took out student loans but never earned a degree, only 14% have a mortgage.  Navient’s research suggests student loan debt is certainly a concern for college dropouts, but not for those who earned degrees.

CBA faculty member Paul Leventhal teaching 30 Wells Fargo students BankCom curriculum in San Francisco, California.  

Three Things to Know to Be In the Know

Fintech Lenders Dial Back Marketing in Response to Softer Investor Demand

‘Inadvertent’ cyber breach hits 44,000 FDIC customers

Shanghai Says People Who Fail to Visit Parents Will Have Credit Scores Lowered

CFPB Crystal Ball:  What’s to Come?

  • Final Prepaid Rule – ETA within 6 weeks
  • Proposed Arbitration Rule – ETA within 6 weeks
  • Proposed Small Dollar Lending Rule – ETA within 6 weeks
  • SBRFA Panel on Overdraft – ETA July/August

Lagniappe

Alex Jimenez, the former CBA Digital Committee Chair, has been named Senior Strategist at Zions Bancorporation.

Karen Jenkins was named executive vice president, director of business banking by Rabobank.

Jennifer Sepull was named chief information officer by USAA.

Marsha Williams was promoted to chairman by Fifth Third Bancorp. Previously, she was the bank’s lead independent director.

Raj Date, former CFPB Deputy Director, Chris Brewster and William Jacobs were appointed independent directors by Green Dot Bank.

Ranjana Clark was named San Francisco Bay Area president by MUFG Union Bank.