ABA Banking Journal
February 17, 2017

This ABA Banking Journal newsletter is a free, twice-monthly supplement to the ABA Banking Journal magazine intended to help you stay on top of industry and policy news. You can also stay abreast of banking news by visiting aba.com/BankingJournal, home to ABA Daily Newsbytes and other email bulletins.

Industry News
The Senate voted 53 to 47 to confirm Steven Mnuchin as secretary of the treasury. ABA President and CEO Rob Nichols applauded the confirmation of the former regional bank CEO, adding that ABA is eager to work with Mnuchin to "strengthen financial recovery and economic progress." (ABA Banking Journal)
 
According to the Office of the Comptroller of the Currency, credit risk continues to be the root of the most matters requiring attention issued by federal banking regulators, ranking as the top type of MRA at community banks for most of the previous 12 months. The mounting credit risk— along with the increased cost of compliance, low interest rate environment and general uncertainties—has made for anxious bankers. Five credit risk trends in particular warrant attention from community banks. (ABA Banking Journal)
 
In a new book, The Unbanking of America, Lisa Servon explains how changes to both the banking system and the economy have inhibited many Americans from accessing basic necessities and building strong financial foundations. (The Atlantic)
 
Data Center, Inc. (DCI)
Verint Systems
The U.S. Consumer Financial Protection Bureau said on Thursday it was exploring the use of alternative data sources such as mobile phone and rent payment bills to help extend affordable loans to consumers lacking credit history. The agency estimates that 26 million Americans have no credit history with a nationwide consumer reporting authority and about 19 million have a history that is insufficient to produce a credit score under most models. (New York Times)
 
We’ve entered the most profound era of change for financial services companies since the 1970s brought us index mutual funds, discount brokers and ATMs. No firm is immune from the coming disruption and every company must have a strategy to harness the powerful advantages of the new fintech revolution. (Business Insider)
 
We are quite bad at saving, data show. Even when we do save, we often raid our savings. Work by the National Institute on Retirement shows 6 in 10 Americans are not on track to maintain even most of their standard of living when they retire. Some people raid their Roth IRA to buy a house — and indeed, use it specifically for that purpose (though they aren’t really supposed to). But raiding one’s retirement accounts is usually a very bad idea, according to most experts. (NPR Marketplace)
 
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Policy News

As explained in a Wall Street Journal op-ed, ABA and Seattle-based Washington Federal have filed suit in the Court of Federal Claims seeking relief for government actions that violate contracts with Federal Reserve member banks by reducing dividends paid to those institutions. The cut to the long-established dividend contract was part of the 2015 highway spending bill, which reduced the annual dividend for Fed member banks with more than $10 billion in assets from 6 percent to approximately 2 percent. In a press release announcing the lawsuit, ABA President and CEO Rob Nichols emphasized the effect of the policy, which as originally proposed would have applied to Fed member banks with more than $1 billion in assets. (ABA Banking Journal)
Learn more ... 

 
(video) American Bankers Association President and CEO Rob Nichols discusses banking regulation and the repeal of Dodd-Frank with Bloomberg's Kevin Cirilli on "Bloomberg Markets." (Bloomberg)
 
As the Trump administration continues to reassess and rework much of the previous administration’s policies, the fate of the largely debated Dodd-Frank legislation remains up in the air. As an outspoken critic of Dodd-Frank, we can expect the president to push for a fairly substantial overhaul of the legislation. In this opinion piece, former ABA Board Member Frank Sorrentino asks what will a rollback of Dodd-Frank actually look like, and what potential impacts might it have on the banking industry and small businesses? (Fortune)
 
Naylor Association Solutions
LexisNexis Risk Solutions
Federal Reserve Chair Janet Yellen defended the central bank’s independence Wednesday from Republican lawmakers who are pushing for major changes in how the central bank operates and how regulators oversee the nation’s banking system. During a hearing that stretched over four hours, GOP lawmakers repeatedly challenged Yellen’s handling of the economy and her leadership in implementing the 2010 Dodd-Frank Act, a measure that President Donald Trump and Republicans have vowed to overhaul. (Washington Post)
 
A federal appeals court said Thursday it will reconsider an earlier ruling that would have made it easier for President Donald Trump to fire the head of the government's consumer finance watchdog agency. The decision offers at least temporary job security for Richard Cordray, the director of the Consumer Financial Protection Bureau who has been attacked by Republicans for his aggressive oversight of the banking industry. (New York Times)
 
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