Executive Letter: Advocacy in Action – Meetings with Regulator Leadership
By Rose Oswald Poels
Last week, 10 bankers joined WBA’s Heather MacKinnon, VP – legal, and me in Washington, D.C. for our annual trip to meet with regulators. This trip is always a productive one, resulting in impactful advocacy and conversations given the small group size. In the span of only two half-days, our group was able to meet with senior officials from the FDIC, OCC, Federal Reserve, and CFPB. The topics we covered in detail included FDIC signage rules, brokered deposits, mergers/credit unions, cannabis banking, BASEL III, banking as a service and working with FinTechs/AI, Section 1071, and other top examination concerns.
Our conversation with FDIC Vice Chairman Travis Hill focused on concerns over proposed amendments to the brokered deposit rule which would unravel necessary and helpful changes made in 2020. We also stressed the need for the withdrawal of BASEL III given how the proposed capital levels are unnecessary and will negatively impact the ability of banks to meet the needs of their communities. In sharing a specific example, we recommended FDIC review how they consider allowing banking as a service when banks seek to work with FinTechs to permit greater collaboration and ingenuity.
We encouraged FDIC to more closely scrutinize merger transactions involving credit unions purchasing banks as these can pose risk to communities given branch closures, inadequate oversight by NCUA, and the loss of having to comply with CRA. Finally, we expressed our appreciation for the delay of the mandatory compliance date for Part 328 as the additional time is necessary to review and test new disclosure content and placements by vendors.
“Attending the WBA Regulatory trip is a very good use of any banker’s time as you are meeting with regulators to discuss real-time challenges that we face every day. Sharing such information and real-life stories of the impact their regulations have on our clients, communities, and shareholders can be eye-opening to the regulators. I have experienced positive changes with my own local regulator as a direct result of these meetings. I strongly encourage all bankers to take part in this trip.” – Ryan T. Kamphuis, President & CEO, Bristol Morgan Bank
The focus of our conversation with OCC Acting Comptroller Michael Hsu was on preemption and cannabis banking. I was able to share our involvement in an amicus curie (“friend of the court”) filing related to preemption by a national bank from a Wisconsin Consumer Act requirement and expressed appreciation of OCC filing to defend preemption in the Illinois interchange case. Stories were shared of credit unions being allowed to work with cannabis banking customers, and the group requested greater flexibility by the OCC and other bank regulators to allow the banking of legal cannabis businesses.
We began our conversation with Fed Governor Miki Bowman by first thanking the Governor for the efforts of her team to investigate the retroactive nature of exam findings involving charging representments fees. After bringing the issue to her attention in last year’s regulatory visit, the Fed changed its retroactive approach in examinations. This is just one example of how discussions during the Regulatory Trip have a direct impact on Wisconsin banks. Our conversation also focused on encouraging the Fed to withdraw its proposal to reduce the interchange fee collected by banks to which Governor Bowman encouraged banks to provide more specific data regarding interchange and fraud-prevention costs.
With senior officials from CFPB, our conversation focused on Section 1071 implementation. We encouraged CFPB to create consumer-facing resources explaining why certain data is being collected and its use, similar to resources created by FinCEN for beneficial ownership information reporting. We also expressed frustration and caution for when CFPB issues a circular, blog, or other “opinion” as the releases are being irresponsibly misused by plaintiff attorneys in attempts to create class-action lawsuits on theories found within these releases that are not law or regulation.
“Attending the WBA Washington Regulatory Trip provided invaluable insights and direct engagement with prudential regulators and the American Bankers Association. The opportunity to discuss key regulatory issues and share real-world experiences with senior officials was instrumental in understanding the evolving regulatory landscape and advocating for our industry’s needs.” – Theresa Wiese, CRCM, Managing Director of Compliance and Risk Management, First Business Bank
PARTICIPATE – Be an Advocate in Action!
Each year WBA has three Washington, D.C. fly-ins, two in the Spring and one in the Fall. The Spring trips involve meetings with Wisconsin’s Congressional delegation. The Fall trip focuses on meeting with regulators. As stated above, these meetings are impactful as bankers are able to speak directly with decision makers and influencers regarding banking issues. Changes in policy and greater issue awareness do occur as a result of these meetings and I highly encourage you to consider attending either our Hill visits or next year’s regulatory trip!
I would like to thank the following bankers for joining WBA this year: Al Araque, Johnson Financial Group, Adam Bellmer, Johnson Financial Group; Kristen Gagliano, North Shore Bank; Corey Hoze, Associated Bank; Ryan Kamphuis, Bristol Morgan Bank; Gary Kuter, Capitol Bank; Heather Nelson, Spring Bank; Timothy Schneider, Bank Five Nine; John Udvare, The Equitable Bank; and Theresa Wiese, First Business Bank.
