ABA Banking Journal
March 3, 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 have steadily won back customer trust since the financial crisis, but that trust could be endangered by sales pressure that isn’t based on the customer’s best interest, according to a new study by J.D. Power. Banks are now reporting record levels of customer satisfaction, and approximately 8 in 10 consumers say that their banks act in their best interest, that they trust their banks to do the right thing and that their banks act ethically. (ABA Banking Journal)
Users still aren’t exactly flocking to mobile wallets, and that’s probably because merchants aren’t that thrilled about them either. According to a study conducted by Forrester Research together with JPMorgan Chase, only about 40% of consumers are likely to sign up and use digital wallet services. (Bank Innovation)
As humans, our failings are epic. Some of us eat too much, lie to ourselves, don’t exercise enough, and spend so much money that we have nothing left for that vacation in Hawaii. But technology, Dan Ariely believes, might save us from ourselves. Ariely, a professor of psychology and behavioral economics at Duke University, is an investor and the chief behavioral economist at Qapital, a Swedish-startup geared toward encouraging Millennials to save. (The Atlantic)
Data Center, Inc. (DCI)
Verint Systems
Banking organizations of all shapes and sizes are increasingly encountering challenges from shareholder activists seeking to force a sale of the bank or other fundamental change in strategy, operations or senior management. The number of activist challenges against all companies, bank and nonbank, has soared in recent years, and these activists, predominantly hedge funds, have a demonstrated record of success. (ABA Banking Journal)
Since Donald Trump’s election, small business optimism has soared. Corporate surveys have, again and again, reported a new sense of buoyancy among their small business respondents. The National Federation of Independent Businesses registered historic increases in its monthly optimism index. The stock market is up and so are projections by the Federal Reserve and International Monetary Fund. Many in the business community are cheerfully expecting renewed growth, lower taxes, more government spending, a reduction in health expenses and overall prosperity. Except they’re not betting on it. Not just yet. (Washington Post)
The U.S. economy grew at a weak 1.9 percent pace in the final three months of last year, although consumers kept up their spending from the more robust third quarter. The second estimate of fourth-quarter growth, which was unchanged from the initial report, reflected a considerable slow down from the 3.5 percent posted in the July-September period, the Commerce Department reported this week. (The Hill)
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Policy News
In a comment letter to the Consumer Financial Protection Bureau last week, ABA offered several recommendations for protecting consumers’ financial information when it is being voluntarily shared with third party data aggregators. The CFPB launched an inquiry amid the ongoing debate about "screen scraping," a process by which consumers provide their online banking credentials to a third-party app or tool. (ABA Banking Journal)
The U.S. Labor Department has taken a first step toward possible derailment or dilution of its controversial rule on retirement advice as it begins to re-examine it at the directive of President Donald Trump, according to a notice made public on Wednesday. The department proposed a 60-day delay of the fiduciary rule, which requires retirement advisers to put the interests of clients ahead of their own. (New York Times)
Computer Services Inc
LexisNexis Risk Solutions
At a Senate Agriculture Committee field hearing in Kansas last week, ABA highlighted the critical role that the nation’s banks play providing credit to farmers and ranchers, and advocated for changes to the upcoming 2018 Farm Bill that would take into account the rising costs of agriculture. Testifying on behalf of ABA, Shan Hanes, president and CEO of First National Bank in Elkhart, Kan., and a member of ABA’s Agricultural and Rural Bankers Committee, urged lawmakers to reform the USDA Guaranteed Farm Loan Program, calling for an increase to the lending limit cap on guaranteed ownership and guaranteed operating loans, as well as other reforms that would help modernize the programs. (ABA Banking Journal)
By most real indicators, the U.S. economy is not too hot or cold, yet financial markets are betting that a core group of Federal Reserve officials who set interest rates are suddenly raring to go. They could have those convictions confirmed or tempered when Fed Chair Janet Yellen gives an economic outlook speech on Friday. If her remarks from January are a guide, Yellen will give investors an update on progress toward the Fed’s goals of full employment and stable prices. It wouldn’t be hard to make a case for higher rates, and doing so would put Yellen in line with many of her colleagues. (Bloomberg)
Harland Clarke
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