ABA Banking Journal
June 23, 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
Banks should approach points of digital friction in the same way e-commerce giants do, if they want to hold onto their customers. As noted in recent surveys, a single point of friction is all it takes for consumers to abandon a digital banking product—and thus, the bank itself. This means banks need to start taking a few lessons from e-commerce firms. (Bank Innovation)
 
The majority of American consumers across all age groups—60 percent—say they still prefer to apply in person for a mortgage loan rather than online, according to a new study by the American Bankers Association. Seventeen percent said they would prefer to apply for a mortgage online, while 23 percent were unsure. (ABA Banking Journal)
 
Roughly two dozen companies in the United States have established a set of ground rules and guiding principles that center on cyber security ratings. Among that roster of companies are several large U.S. banks. Those cyber ratings are used in essence as a FICO score, which allow for companies to assess risks of partner firms. The scores give an inkling about how well a company can "weather" a cyber attack. (Pymnts.com)
 
Data Center, Inc. (DCI)
Verint Systems
The "future of work" has become a much-hyped topic as change permeates the U.S. workplace. Millennials view work in markedly different ways than the generations before them did, and technology and artificial intelligence (AI) are rewriting workflows. Understandably, these rapid changes leave leaders wondering: What will workplaces look like in the future, and how are those differences affecting my workplace now? (Gallup)
 
When engaging in contract negotiations with a third-party, have you ever been told "other banks don’t request that provision"? Or, how about "your requested terms are not industry standard"? It’s a common reply from service providers that have a limited number of competitors and from fintech companies that are not aware of the regulatory standards to which banks are held. One thing is clear: banks of all sizes are frustrated with the "you are the only bank" response. (ABA Banking Journal)
 
A former bank CIO-turned-college professor is working to build a concentrated undergraduate commercial banking curriculum at Marquette University in Milwaukee that allows students to graduate with the skills they need to move immediately into careers as professional bankers. It’s one industry veteran’s approach to solving a growing problem: a lack of young talent entering the banking profession. (ABA Banking Journal)
 
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Policy News
As the Trump administration works to advance its tax reform initiative, ABA today took part in a meeting with representatives from the National Economic Council, Treasury Department and other financial industry groups to provide feedback. ABA President and CEO Rob Nichols, who attended the meeting on behalf of ABA, expressed his support for pro-growth tax reform that includes lower rates and simplification. (ABA Banking Journal)
 
The House Financial Services Committee today approved five bills as part of a legislative package intended to reauthorize the National Flood Insurance Program. Lawmakers unanimously approved two ABA-supported bills: H.R. 2875, the National Flood Insurance Program Administrative Reform Act of 2017, which would make administrative changes to the NFIP to increase fairness and accuracy, and decrease taxpayer risk; and H.R. 1422, the Flood Insurance Market Parity and Modernization Act, which would encourage development of a robust private flood insurance market as an alternative to the NFIP. (ABA Banking Journal)
 
Inflation has stubbornly stayed lower than the Federal Reserve has desired for the past eight years, and it has been falling in the last few months. In a move that could well define her chairmanship of the central bank, Janet Yellen is betting that falling prices are a temporary blip that will soon be forgotten. (New York Times)
 
Computer Services Inc
LexisNexis Risk Solutions
Regulations based on asset size are "inappropriate and needlessly burdensome" for many banks with non-complex business models, and ultimately lead to higher costs and fewer choices for consumers, ABA said in written testimony submitted for a Senate Banking Committee hearing on regulatory relief for midsize and regional banks. (ABA Banking Journal)
 
The Consumer Financial Protection Bureau has proposed several changes to its final rule on prepaid products, whose implementation has been delayed until April 1, 2018. The bureau also invited comments about whether to delay the rule’s implementation date further based on time needed to comply with the latest round of proposed changes. Specifically, the bureau is proposing to revise the error resolution and limited liability provisions of the prepaid rule to clarify that "financial institutions would not be required to resolve errors or limit consumers’ liability on unverified prepaid accounts. (ABA Banking Journal)
 
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