ABA Banking Journal
June 9, 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
As some see it, the vision of a cashless society may already be coming to fruition without direct government intervention. Indeed, whether because of the increasing number of merchants who welcome credit cards and digital payments, the cumbersome nature of having to always carry cash, the increasing sophistication of mobile payment apps or the generally rising numbers of people who think of money of something virtual rather than physical, it seems, at least anecdotally, that folks simply aren’t using as much cash as they used to. (ABA Banking Journal)
The Independent Community Bankers of America and 51 state bankers associations have filed friend-of-the-court briefs in support of ABA’s lawsuit challenging the National Credit Union Administration’s expansive field of membership final rule. Both briefs support ABA’s motion for summary judgment in the case, which takes on NCUA’s expansion of community-based credit union fields of membership far beyond the limitations imposed by Congress. (ABA Banking Journal)
American consumers increased their borrowing at the slowest pace in April than they have in almost six years. Credit card spending growth slowed, while borrowing gains for school and autos also cooled. The Federal Reserve reports that total consumer borrowing rose $8.2 billion, or 2.6 percent, to $3.8 trillion. It was the smallest percentage increase since borrowing declined 3.5 percent in August 2011. (New York Times)
Data Center, Inc. (DCI)
Verint Systems
Here come the millennial home buyers. Finally. For the past decade, since the Great Recession forced so many Americans to put their lives on hold, the world of real estate has been praying for the arrival of millennials on the home-buying scene, to begin buying, selling, fixing up and financing property. (Washington Post)
Corporate executives' confidence has hit a three-year high even as their hopes for economic growth and job creation have dimmed, according to a survey released Tuesday. The latest Business Roundtable CEO Economic Outlook Index hit its highest level since the second quarter of 2014 as belief grew that pro-growth policies out of the Trump administration would yield long-term benefits. That came even though the executives see GDP growth of just 2 percent in 2017, down from 2.2 percent in March. (CNBC)
U.S. job growth came in below expectations in May, while the unemployment rate fell to 4.3 percent, the lowest it has been in more than 16 years, federal economists reported late last week. Employers added just 138,000 jobs in May. Economists surveyed by Bloomberg had expected an increase of 180,000 in non-farm payrolls, which would have been in line with average monthly gains seen over the past year. (Washington Post)
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Policy News
Late yesterday, the House passed the Financial Choice Act by a mostly party line vote of 233 to 186. The legislation is Financial Services Committee Jeb Hensarling’s sweeping, 600-page bill aimed at reforming parts of the Dodd-Frank Act’s extensive supervisory regime and providing regulatory relief for banks. The bill includes a number of regulatory relief provisions long sought by ABA as part of its Blueprint for Growth, including a Qualified Mortgage safe harbor for mortgage loans held in portfolio, more tailored supervision based on an institution’s risk profile and business model, greater flexibility for savings associations, relief from various reporting requirements, and repeal of the Volcker Rule. (ABA Banking Journal)
Testifying before the Senate Banking Committee this week, ABA Chairman Dorothy Savarese urged Congress to "remove regulatory impediments and let us accelerate growth in the American economy." She urged the Senate to act on several proposals, including bills that would require tailored supervision, enhance flexibility for mutuals and thrifts, provide stress test relief, streamline and ease paperwork requirements and increase mortgage lending, among others. (ABA Banking Journal)
Computer Services Inc
LexisNexis Risk Solutions
The Federal Reserve will work in the coming months to provide greater transparency into the stress testing process, Governor Jerome Powell said recently. "We’re working on something...in the coming months which will provide much more granular information about our expectations for loss rates on particular portfolios, of corporate loans and other kinds of loans," he said. "We’ll also provide more guidance, when we announce the results on June 22...on how we think about the qualitative requirement. And we’re going to seek comment from the public on how we go about providing more transparency." (ABA Banking Journal)
From the perspective of many policymakers, low rates and subsequent QE programs created conditions to reverse the crisis-induced deleveraging and help averted the scenario of deflation. However, not all effects are positive. (Inc.)
Harland Clarke
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