Executive Letter: Reinforcing Confidence — Addressing Customer Concerns Amid Rapid Changes at Federal Level
By Rose Oswald Poels
Thank you to so many of you who attended our annual Bank Executives Conference last week! We had 280 bankers join us in Milwaukee and it was energizing to hear the conversations, watch the networking, and learn from expert speakers.
For those in attendance, you heard WBA Board Chair Al Araque and me encouraging everyone to get involved in our various advocacy initiatives. Without question, these are very interesting times, particularly on the federal level. Change is happening at record speed and, as a result, it is very difficult to keep up with everything. WBA will continue to do its best to sift through the noise readily found in the media, social media platforms, and messaging apps to share our perspective as to the impact these changes have on the banking industry.
The most recent events that occurred over the weekend were directed at CFPB. Last week, Treasury Secretary Scott Bessent was named Acting Director of CFPB; however, on Friday, that changed to Russell Vought, who had been confirmed the prior day as director of the Office of Management and Budget. On Saturday, CFPB Acting Director Vought ordered CFPB employees to “cease all supervision and examination activity” and “stakeholder engagement” and further indicated he would not take CFPB’s next drawdown of funding from the Federal Reserve. The full impact of these orders, and how long they will last, is unknown. WBA is aware that as a result of the order to halt activities, lawyers representing CFPB have not been able to act in court on behalf of their client in active, pending court actions over the last several business days.
The Trump Administration’s actions in freezing activity at both USAID and CFPB are raising unfounded fears among the public as it relates to many daily banking functions. WBA is aware that myths are spreading quickly on social media and in chat rooms about individuals’ continued access to their bank accounts, whether the government is taking money from their personal bank accounts, whether the FDIC will also “disappear” and insurance no longer provided, and other such concerns. At the same time, consumer groups are being very outspoken over the Administration’s actions taken against CFPB. Your frontline staff and others who engage with the public should be prepared to respond to these myths as you deem appropriate. Emphasizing the financial strength of your bank, the fact that banks are the safest place for their money and reinforcing the fact that FDIC insurance is not being eliminated, are all helpful messages.
WBA will continue its strong advocacy with regulators and Congress in pushing back on the overreach that has occurred from CFPB against the industry. Publicly, WBA is speaking carefully about the recent CFPB actions as you may have heard in my live Wisconsin Public Radio interview on February 10. If CFPB were refocused to align with what WBA believes its original intent to be, which is the oversight and examination of non-regulated entities engaging in “banking” activities, then perhaps the agency would be of value. The banking industry has always acted in ways to protect consumers and will continue to do so whether CFPB exists or not. WBA believes this latter message is important to repeat with customers and the public as needed, rather than allowing individuals to start another myth that somehow bankers oppose consumer protection.
From a business perspective, your bank should be prepared as you have been in the past to help federal workers, non-profit organizations, and other similar customers who may be temporarily impacted by funding freezes. Your staff should also be prepared to handle increased stress and concerns from immigrant customers about access to their bank accounts.
Please let me know how WBA can further help you and your team during this period of rapid change.
