CBA’s Johnson Calls On Policymakers To Join Industry In Re-instilling Confidence In Banking System

Today, Consumer Bankers Association (CBA) President and CEO Lindsey Johnson delivered keynote remarks to the Exchequer Club of Washington, D.C., where she urged policymakers to work in tandem with the industry to re-instill consumers’ confidence in the American banking system following a period of significant market volatility.

Below are excerpts from the speech as written:

On Market Volatility Following Recent Bank Failures

“It’s also important to highlight that the more recent market volatility we’ve seen is being fueled by emotion and misinformation that does not reflect the strong underlying fundamentals of the vast majority of banks today. This emotional response from headline-grabbers and short sellers trying to make a buck has created fear and tremendous downward pressure in the equity markets. 

“The actions and reactions from many consumers over the past two months reflect the fact that their perceptions of the banking system have been over-influenced by false narrative and unnecessary panic. More importantly, these events have also taken a toll on the sacred trust Americans have in our well-regulated banking system.”

On The Need To Re-Instill Confidence

“We cannot ignore the harm that grandstanding and political posturing, instead of finding solutions, can have on consumers’ confidence. All of us must continue to reinforce the strength of the industry and reassure consumers that their hard-earned deposits are safe and secure. Because banks are nothing without confidence.”

“We call on policymakers to join our industry in helping to reinstall consumers’ confidence in our financial system and stability across the marketplace.

“How? By promoting sound policy that ensures banks remain well-positioned to meet consumers’ needs within the well-regulated banking system and ensuring that consumers are afforded the same level of protections for various financial products regardless of where they get them.”

On Policy Proposals To Further Strengthen The Industry

“The events of the past few weeks also brought to light serious policy questions that merit thoughtful consideration and an un-politicized debate, including [deposit insurance, M&A, and activist investors]. When it comes to examining and advancing these and other policy solutions, banks of all sizes must have a seat at the table.”

On What Policymakers Should (And Should Not) Be Doing

“No matter what other types of technology or flavor of financial service providers come into the market, we have – for more than a century – developed the most competitive, well-regulated, and resilient banking system in the world.

“Protecting that system requires the ability for banks to adapt to consumers’ changing financial needs and preferences without diluting the protections and strength that American consumers and small businesses have come to expect in our banks. That’s why banks remain laser-focused on delivering the financial tools necessary to help every American thrive – from new overdraft innovations to small dollar loans, and much more.

“It’s also why policy changes that seem aimed more at scoring political points, such as calling some of the fees that banks charge to extend credit to consumers “junk” or allowing the government to redefine and structure the most competitive marketplace in the world to what they believe is ‘competitive’ is not what consumers want or need.

“These proposals and knee jerk reactions to the current market volatility have the real potential to impact consumers’ access to credit, leading them to meet their needs outside the well-regulated financial system.”

On Observations Nearly One Year In As Cba President And Ceo

“Over the past 10 months, I’ve had the opportunity to travel across America – meeting with bank leaders in their home markets, learning about their objectives at their respective institutions, and how each of them uniquely works to serve their consumers and communities.  

“We spend a lot of time, particularly working through our 14 Committees at CBA, focused on how banks can prepare for what’s NEXT, from navigating digital transformation to meeting evolving customer demands and, of course, helping consumers and small businesses contending with economic headwinds.”

“America’s leading banks have proudly served Main Streets across this country for more than a century, during good times and bad, and we’re fully committed to delivering on this mission as we enter this next phase of the economy.”