Transcripts For CSPAN2 American 20240704

I came away with a couple different impressions. First of all Artificial Intelligence was everything. Every panel, every roundtable, every discussion centered around Artificial Intelligence. People like to raise Artificial Intelligence really when its not even speak as we believe this but you can finishwatchingd take you live to discussion of the Banking System and Financial Services sector with Bank Executives and former regulators. You are watching live coverage on cspan2. 1300 bankers state Association Leaders independence day. Even more watching on our liveke out of your busy schedules to add your voice, your advocacy efforts. I also want to walk members of the media who are joining us, and i would like to extend a special thanks to the members of congress, regulars and other es our program over the next few days. This event is all about advocacy. Its about dimmest setting to the policy community that bankers are committed to working constructively toward a policy environment that supports a resilient Banking System, and Economic Growth so that individuals, families and businesses across this nation can thrive. Bankers have an important have policies that come out of washington affect main street. Your perspective and your expertise are aornerstone of our advocacy strategy. So this morning i i want to tk about that strategy in greater depth and detail, specifically about how weve had to shift our approach to respond with the climate that we find yourself in. Now to understand how a be a strategy has evolved with first aid to look at landscape has changed here in washington aba but still with congress which remained defined along party lines and increasingly those parties are showing their own sharp internal divides. In the past year we witnessed an unprecedentedn the house as lawmakers scramble to find a new speaker. Fortunately they did and weve speaker johnson and his team since he took the gavel. But as of next week resignations will have further reduced the already slim house gop majority. That kind of split over the course bipartisanship to get major legislation passed. Members of congress including key lawmakers with knowledge and experience in banking policy make the decision to step aside including congressman Patrick Mckenna called the gavel of house Financial Services committee, congressman blaine glcm are a former banker and long serving member of that committee, and senator kyrsten sinema, a former member of the Banking Committee and a lawmaker known for trying to broker bipartisan deals. We dont know what the fall election will bring but the departures from congress and the ongoing partisan divide make it even hardeo the outlook for banking legislation moving forward. We remain hopeful of course and will continue to do our part to support members of congress and candidates in both parties who understand the Critical Role banking place in our economy. Now with congress divided the focus of the attention has shifted to the regulatory agencies. Folks, the banking agencies have some might say too busy. I refer to this other regulatory tsunami, this tidal wave of la crashed down on the Banking Industry in recent months. Weve seen a proposal to dramatically increase Capital Requirements that will limit alreadyd likability to support the economy a proposal to slash the cap on debit card interchange pursuant to brag i i which will limit revenue banks of all sizes used to pay for new products and promote financialnclusion, a misguided Political Campaign on socalled junk fees by the cfpb in the Biden Administration targeting Overdraft Fees and sehese and most recently credit card late fees which ill discuss in just a moment. And, and theyve even targeted fees that by the own admission banks are not even charging as wall street shows that in an editorial last week it feels like the administration is playing a game whack a bank with us all out assault on fee income. Weve had final rules to overall the committee reinvestment act and rules to the pose complex new data reporting requirements on Small Business lending under se and we are now hearing and overall a a Bank Liquidity rus is also on the horizon. Each of the costs and impacts en banc operations, products and services. Aba is to be concerned regulators have not considered the cumulative effects these changes will ultimately have on banks ability to the customers and communities, and support the broader economy. We are so concerned that i sent a letter to President Biden a few weeks ago asking him to have mr. President , stop the tsunami. When we take all this [applause] thank you. We would take all of this together, the prospects for continued divide in congress and the continued threa■c2t of regug the boundaries of your legal authority, it makes our jobs as advocates for the Banking Industry more challng more important than ever. So how have we evolved our advocacy efforts to address this current climate . We are stored with members of congress from both parties and were trying to work with regulators were ever in whatever we can. Buteve had tourn to the courts to ensure that regulators, that the regulation that all of you must follow reflect the law and allow your banks to 30 customers and communities. Litigation is never, never our first or preferred course of action. But over the past few yrs weve seen regulators take actions that overstep the authorities granted to them by congress. When they insist oninalizing rules that fall outside of the regulatory purview, and when they ignored the constructive feedback from banks and other stakeholders, litigation is our only remaining tool in the box. Again, its not a tool we want to use but its one continue to strategically wield as needed. The good news is weve already seen the courts side with us on some of these challenges. One example, t cas would file together with the texas anchors association and the use chamber of commerce in 2022 challenging the cfpb surprise update to his udaap exam manual. Which dramatically expanded its Enforcement Powers literally overnight. Al judge ruled that the beer lacked the authority to make these changes and vacated the manual update. And a separate case on the cfpbs section 1071 final rule which will reduce Small Businesses access to credit, we also succeeded in winning a state positing implementation of the rule and the outcome of another cfpb case at the Supreme Chamber of commerce and other partners challenge the Agencies Committee reinvestment act overhaul in court. Now again this is not a decision we made lightly. Aba and our members fully support the goals and principles underlying the cra. Americas banks have long believed people in every corner of this country should have a chance to succeed. And we agree the rules implement this decade old statute should be updated to reflect the realities of modern but as we reviewed the final role with our members we reached the conclusion that this exceedingly complex rulemaking one to consider banks demonstrate commitment to opportunities, and two, it will it will create a cra framework that goes far beyond what congress authorized. Most troubling, the final cra real risks undermining the very spirit of the original law by creating disincentives for banks to offer certain products or land outside the branch network. The agencies missed the mark and we reluctantly had to call them on it. To be clear, our nations banks are committed to lifting up all of their customers, clients and communities. The rules that make it harder should be challenged here thats not the last of our legal actions. Earlier this month we were forced to fall yet another lawsuit against the cfpb over a newly issued final rule slashing credit card late fees by 75 . 75 . Now, there are reasons why banks charge late fees and why they are authorized i long to do so. Late fees incentivize timely payments and compensate c issuers for costs they incur when payments are late. But the cfpb has labeled these fees junkies and with this final rule of your effectively upended ten years of regulations back my administration of both parties. W have excluded small issuers, the reality of that in a competitive marketplace, all card issuers ll to drop fees if they want to compete for customers. To be crystal clear, this rule will affect the accessibility ol have a profound impact on banks Business Models. Our complaint lays out in detail are arguments against this rule, including the cfpbs absurdly short 60 day compliance deadline. We are seeking Immediate Intervention by the court and a preliminary injunction that will stop it from taking effect until the Court Decides the merits of the case. We have an obligation to make sure the agencies overseeing the Banking System are carrying out their duties witn the law. And consistent with the authority granted to them by congress. On seeing us in court. An count if we have to follow the rules, so do [applause] thank you the other way we are enhancing our advocacy the resea capabilities. As weve seen regulators falling short on their own obligations to understand the potential consequences of their actions. A good example of this is whats been happening with the bank capital rules. In our view regulat how the prol endgame will affect our economy. In our joint comment letter with dpi, we showed the harm it would cause. We were not alone. When you look at the comments that came in several weeks ago, and overwhelming 97 of them, 97 were critical. And that criticism came from a broad crosssection of stakeholders. Many outside Banking Industry, agriculture business, housing advocates, environmental and civil rights groups. All of them spoke up and to this proposal is a mistake. Chairman powells comments earlier this month signaled that the agencies may finally we stil that regulators need to go back to the drawing board. Today i am reiterating abas call for this proposal to be withdrawn and we proposed. Basel iii should not move forward in its current weve also conducted [applause] weve also conducted our own Extensive Research to support our 1071 case. In fact, the ap survey a bank lenders found the cfpb mostly underestimated the implementation and ongoing Compliance Costs by literally millions of dollars. In addition we deployed our Research Teams to debunk the harmful claims that the cfpb continues to make regarding the competitiveness of the credit card market. To highlight the damage the feds rag proposal would inflict on banks of all sizes, particular the ability to offer low or no cost checking gas and other products. And■ to emphasize the potential harm that the socalled credit card competition act would have on consumers, including spelling in for credit card reward programs of you know. I can spend the rest of the money go into detail on any one of these issues but i will say that for the panels that are la. I invite you to take your own deep dive into our Extensive Research by visiting aba. Com reg research. Where youll find a complete list of detailed analysts that we provided posted and provided over the last several months. Bottom line we where better position today to prove how policy decisions coming from washington or not just but alsoe customers, clients and communities that you so importantly serve. Thesegencies should expect us to rigorously review and challenge their findings and data where appropriate. By the way thats how our inhouse team economists was able to recently question the rising costs of the special assessment banks are paying for last springs failures. To seek financing from the fed instead of other cheaper sources of funding, and the fed loan came with penalty pricing much o the bill that banks ultimately are being asked to foot. We have yet to an explanation for that decision. Now litigation and emphasis on conducting our own robust data ways we have evolved our advocacy efforts to respond to the current climate. But there are also several pillars of her advocacy strategy to remain unchanged. We continue to engage with congress, the administration, the independent regulators as constructive as again and were committed to working with anyone and everyone interested in advancing a progrowth policy agenda. We continue to build industry coalitions to elevate the issues facing the nations banks. We are collaborate with other trades, our incredible state of light orders, and many others to raise the alarm about the regulatory tsunami. And we will continue to do so with facts and data on our side. We will also continue to leverage of these partnerships as we work to advance some key g the acre act which will strengthen banks ability to support world economies pick and a safer banking act which will enable banks to serve cannabis related businesses in the 38 states that have voted to legalize it. Its also great to see new legislative proposals to encourage the creation of de novo banks. In addition will always look for new and innovative ways to challenges facing consumers. We work to help reduce the number of unbank americans through championing the bank on initiative. Were tackling the pervasive problem of fraud head on with several ongoing iniwinning banks never asked that campaign. And were taking particular aim at check fraud. Today, for example, the aba foundation and u. S. Postal Inspection Service are releasing a new joint infographics and we hope will be shared across the country. ■la not least, we continue to engage with the public to tell the story of americas banks. Its a different story thaty coe telling. The fact is americans are happy with their bank and they clearly recognize that the Financial Services marketplace is a highly, is highly competitive despite claims to the contrary. This morning where releasing a new Morning Consult National Poll conducted on behalf of the aba. It shows almost nine of ten and American Consumers say they are satisfied or very satisfied with their primary bank. And an overwhelming 96 rate their primary banks Customer Service is excellent, very good or good. Furthermore, eight in ten say theyre confident that the money that had deposited at the primary bank is safe. And over 80 believe the Banking Sector is highly competitive. A similar number agreed they have multiple optionso choose from when selecting Financial Products and Services Like bank accounts, loans and credit cards. Not only are consumers happy with their banking choices, ad the service they received from the banks, they are skeptical of the government interfering in the financialervices according to our survey almost seven in ten American Consumers agree that the economic challenges facing our country, everything from persistent inflation to slowing of growth, given all that now is not the time to post additional regulatory burdens that will restrict bank lending. And a similar number agreed that when so many new regulations are issued simultaneously, regular should be required to assess the combined effects of the new rules on banks, consumers and the broader economy before those rules can take effect. We could not agree more. So bring myment to a close, the message of what i do want to take away is of this. There are two different stories being told right now about the Banking Sector. One is rooted in faulty, inadequate or nonexistent data. Consequently, the regulations that are tailored to this false narrive are fundamentally unsuited to the real world of banking that americans live every single day. And pursuing their implementation with the significant harm to our nations banks, the customers and communities everywhere. Bankers know the real story because you are living it every day. And we need you now more than ever to help us tell it. Not just here at6u summit, but throughout the year as we head into the upcoming election season. We need you to speak up about the importance of preseing and protecting our broad and diverse Banking Sector which remains the envy of the world. About how banks continue to be vital providers of credit, that fuel the engines of our local state and national economies. And how banks serve as a get ■ with for consumers seeking thr own piece of the American Dream that have banking relationship can help unlock. Your voices can false narratives that are spreading about the Banking Sector so that you can get back to doing what you do best, serving your customers clients and committees and helping our nations economy thrive. Thank you for being here. Thank you for your time this morning, thank you for your day. [applause] now, to bring a real world perspective to the policy debate here in washington, id like to inviteo the state four bank ceos from different corners of the country who can help us tell the real story of banking today. Please welcome aba chair elect john asbury, the ceo of hellenic unit bankshares in richmond, virginia. Aba board member brent beardall, the president and ceo of wafd bank in seattle. Aba vice chair kenneth kelly, chairman ceo of First Independence Bank in detroit. And aba chair Julie Thurlow president ceo of the Reading Cooperative bank in writing massachusetts. Ur moderator are n chief Communications Officer peter cook. [applause] good morning,■■ everyone. Have a seat. Welcome. Thank you for being here. Thank all of your being here as well. Always a highlight for me to be able to chat with our members, particularly four Board Members right now, essentially my boss is right here so i could have■■ con nice to see you all. And rob just gave the introduction to you heard his remarks. We know we are all from but not everyone here may necessarily consumptive watching a cspan for example, may not know all that much about your individual institutions. Julie as archer i will ask you to go first. Tell us a little bit your bank we are a mutual bank we aret, massachusetts, about 15 miles. We actually cover from lawrence if youre familiar with the north s. We are deposited over were found in 1886, and we are nine Branch Operations and get a mission 990 assets. But our lastu couplef office of an intentionally opened in communities in minority majority communities with an attempt to address financial needs in those communities. Great. Do you want to go an expert yes. Kelly to a search of sco First Independence Bank based in detroit, michigan. We have been a business now for going on 54 years but we want of the positive outcomes of the 1967 rights in detroit becoming the first africanamerican owned and controlled bank in the state of michigan. Were operations in minneapolis, minnesota, part of George Floyds murder was the outcome of banks in the market that we want to do something differently and we got invited to come and look at the opportunity to expand into that market. So we are proud to represent the team there in detroit who does a fine job of it a try to bring Financial Services to that community. Great. And brent. Good morning peter. Thank you having. I from seattle so i need to pay trivet to Marchand Lynch so i dont get find. There are no finds love expert the board fees are going to be withheld i understand. A pleasure to be here. Being ceo of wafd bank, now a 30 billion bank on the west coast and nine western states from washington all the way down to texas. We just completed an acquisition, after 50 months of waiting to get Regulatory Approval we finally got that done. The close of the transaction at 11 59 thursday 729th. The next day fridaye close branches down, started the conversion and the very pleased to report that on sunday night at 8 p. M. We got it all done. So to my knowledge when we fast as close to conversion everywhere net positive on deposit so im happy to sitting on stage. Great, great and youre not going to decide. Thank you v■6er■fy much. And john. Thank you, peter weir atlantic he did make an operative threat virginia, a diversified fullservice bank, a little over 21 million in assets or our roots go back to 1900 you. While we are principally of Virginia Bank we do at some operations in maryland and North Carolina. We also have a merger about to close on april 1. We emerge with a wonderful when had a a 14yearold Virginia Community bank called American National bank. I is a douche, longtime friends of ours and operate in the western and southern part of the state and North Carolina. We are excited about the expansion into North Carolina. So that is our story. So four bank serves in the diversity of the Banking Sector in many respects you, this country, the strength of the Banking Sector in the u. S. The u. S. Began perspective or from some of the countries in terms of the depth and breadth of our institutions. We all know this is an interesting year, a year ago at this time we had the summit signature everything that happened in the spring of last year. John come tell me a little bit about where we are today as an industry, your own institution whats the last year been like . I think when a much better place. I think industry has limited its resilience. I think we seelenty of proof point that what happened with what i call flash failure banks. These were anomalies, not representative of the industry. Hypergrowth should become unStable Deposit bases, editing all of that was essentially called out, overreliance on r0cuninsured deposits had apped as an industry we stayed true to our clients. Relationships can we tell our story and we demonstrated more so than anything else its diversification that really matters big something i said, peter, over and over and over again, at the end of thet base. And so i think the vast majority of us have very granular Stable Deposit bases and if thats a really carried us through. Lets face it, it increase what was already building pressure on the interest margin. So we one of the first publicly traded banks in america that came out and said we will take meaningful expense reduction actions. We did what to seem like it was one challenge after another all year long. But in the end we grew our deposit base i. 6 Percentage Points and we grew lending. We did what needed to be done. I think thats true for most people in the field. This industry is resilient. Brent, your take a year later. Yeah, you know we talk so much about stress testing, right . After the great financial crisis on the stress test and were done. Lets be real, this industry just with an amazing stress test. A 500 basis. Shock in Interest Rates. That is, especially some for int rates were. So its natural that were stresses and if you think about the failure of std, it was really alure of block and tackle of banking, dash svb. I love what of the will talk each of you about is my risk management. I always go back to svb, right . What was at the duration of their core deposit . And almost anything you look at with svb the core deposits was geeky as a positive effect the deposits did nothing but grow grow grow through the cycles of 40 years. You couldve done any study what is said eight to ten years estimated duration under deposits, except for what happens, you get stressed, you get this kind of flash event that happened with them come with social media, instead of eight years, it was less than 24 hours. ■ i would tell you, peter, i■n times of stress, leaders provide calm and stability and we saw what happened and bret just mentioned it a moment ago, we saw really 47 billion move within 24 hours. And so, when there is lack of trust, you find that peopl do t normally wouldnt do like go withdraw all of their money. So i think its important that we as leaders in this industry demonstrate that leadership of calmness when were on the hill today. Hopefully well hear that on the panel behind us from the former regulators, were talking about it because it only takes someone to say that theres a fire here for all of us to try to get out of that door at the same time and someone will get hurt. We all know in a Capitalistic Society money is oxygen and weve got to be sure that were providing the understands, your objection jen is going to be at julies bank, brets bank and johns bank when you need it and thats calmness that we need to bring to this discussion. Im an engineer by training, when you look at of the lines, fancy way of saying, no one in modeling 500 basis points. If you do, please inform me. We do 400 on the high and low side. The point im making, no one inside of a 18 month period so my advice to governors in office that ive had a chance to speak with,ability now with of yet, if you need to take us somewhere, define what that is so we can prepare for the ride. And we didnt have a chanceo one and so, it created stress, as brent just mentioned, not only those banks we wereout, bu across the system so hopefully theyve done a good job of projecting a downward increase, but my view, given where we are and given the instability around the election, i think, is calm and steady will win the race on this one, be sure the pig gets through the python. And julie, youve had a chance to talk to your customers of course in massachusetts and travelling with abs and association and around the country. Whats your sense of last year and spot now and i think that banks are a lot more resilient than weve given credit for. Weve been through cycles before. We have Balance Sheets only have certain levers that we can pull so we adjust our strategy as we move forward to address for the newparadigm. Did we address this, and our deposit costs rose, but i think weve managed through that and were waiting for the next cycle to hit and preparing to meet the needs of our customers. Well, we have, by chance, a fed meeting starting today with the decision on Interest Rates tomorrow. Let me get your sense, if you had the chance to talk to jay powell and his colleagues, maybe kenneth, ill begin with you. You mentioned before. What advice are you giving to jay ■nppowell. I dont have a direct lane to jay powell so i dont want to fake that, but i have a chance to speak with folks and provide and the fed out of chicago, and i think that we need stability at this point in time. We have not seen the net effects of the costs running through the system, meaning, understanding what does that mean to Small Business when i have to pay a higher Interest Rate cost. So, my advice would be calm and steady i think will win the race here. I think the point has been made we shouldnt take for granted that race wont move, but now is the time to allow individuals to figure ou h leve resiliency across your Balance Sheet so if we run into moret s time youre capable of dealing with that. Any advice for jay powell or input for the fed . Im person to give jay powell advice, but calm and steady. Were leaders of the financial system. Lets never forget were bankin if any one of us suffers the run that s had, were not to be. And we have substance and from a capital standpoint, from a liquidity standpoint. It is relates to the Federal Reserve, i believe theres too much transparency, i think they make a mistake and give their thoughts where rates are going to go. And they go out there, this is where we think rates are going to go, but, an important but, were data dependent. None of us can future and jay powell cant predict the future. Why set expectation where rates are going to go when we dont have data. I think its one of the things thats gotten us in trouble and the markets to get frothy in some respects and some were baking in five to seven cuts, and i shook my head. Inflation is well above the 2 target and how and people look at the doc thoughts and thats where it needs to be. And i think the pendulum may have swung too far in terms ofy themselves into a box. I think its steady as she goes. Theyll go the measured pace and i think they should. We need to let inflation calm down a bit more. I think wed all like to see lower Interest Rates, but they dont need my advice. ■ a while. One thing they would ask all of you if they had the chance, how is business . If you had to had input as far as t picture of the economy, the state of the economy right now, john, how is it . Pretty good. Its a function of our virgini exposure is and North Carolina and two economies. The business is pretty good. Things have slowed a bit, but our commercial industrial clients are doing just fine. Theyre still liquid and theyve been resilient on the commercial real estate side and well perhaps talk about that later. Were seeing fewer project underway now, being started mainly just because of the higher cost of Interest Rates, the amount of capital that needs to go in, equity in order to make the project work. The credit is quiescent. Edit continues to be very quiet and the fundamental health of our economy in which we operate in looks good to me, so, slower, but doing fine. Anyone have a d on that . Is that whats mapping in is that whats happening in yo neighborhoods . Our delinquentsy is probably the lowest its ever been and consumers seem to be faring well. Rumblings, but commercial takes many forms, family, Owner Occupied real estate, the diversity of our portfolios will look at the strength. Lets look at that. Commercial real estate has been a hotopic if you watch any of the Business News channels, i used to work a few moons ago. Its been a hot help the public audience understand what commercial real estate your point, julie about commercial real estate. Theres been an effort to try to sort of generalize here, but you have to look specifically, dont you . I think so. Lets be honest, there are some zip codes that are going to have difficulty when people dont go to the office as often to do their work. Then theyre going to be people that change their renegotiate their leases and stability in certain sections of the portfolio, but the whole commercial portfolio is not actually exposed and a businesses, as john mentioned, cni businesses are very strong right now. If i could, im on a personal vendetta the record straight. The sky is not falling ton commercial real estate, stop the madness, there are smany chicken littles out there on tv. Stop. There will be issues in pockets of commercial real estate as julie pointed out. In my mind you need to know about commercial real estate, number one, what kind of commercial real estate. Its a bad thing like saying there are companies that are overvalued, overall, theres thousands of categories of commercial real estate. Location, location, where is the real estate you have. Are you downtown manhattan, washington d. C. , Salt Lake City . It matters a great deal where people and one statistic i wish we all had to my knowledge, nobody has a very goodstatistics, its physical occupancy of office buildings. We talk about occupancy and financial occupancy. That doesnt what matters is physical occupancy because that means if your workers are coming in, youre going to renew your lease when thats due and how much equity is in the deal. If somebody only has 10 equity theyre going to walk pretty quickly. 50 equity theyre alo the ride and lastly, as we all know, the most important characteristic of those we lend to is character, so its really hard to say, oh, my goodness, you have a ■x concentration. I believe Warren Buffett said concentration can be a good thing if its concentrated in the right place or it■ c be bad thing, but stop categorizing commercial real estate. I think its not a bad thing. The properties are so different. And its around the apartments and hotels. The overafternooning concern is rates ■ are higher and so, historically commercial real estate has been a pretty good hedge against inflation, and apartments and rents are up. So, sure debt is higher and cash flows are up, true. Its not true for office. Fice conversation, thats not so much about Interest Rates, thats a structural change and the nature of work, but then it comes down to, are you rise off buildings and you know, major metro areas or talking about, like rise office buildings, and tenants less supportive of remote work, hybrid work, et cetera. Its about a you using the office space or not. I think its just not one thing, theres a lot of press about rent controlled apartment buildings and localized issue and very few places in the country thats an issue, its not one thing. Let me ask you Something Else thats happened in the last year, about in his remarkse regulatory changes coming from washington. A long list. The basel and interchange for debit cards, any number of proposals that have come. Rob called it tsunami of registry changes. How much of your time has been devoted to dealing with these issues, planning for these issues . Is this walk me through how youre navigating this right now. Julie, maybe ill start with you on the end. So it is a tsunami of regulation when you think about tremendous amount of requirements in the organizations keeping people. I think there was 5,000 page in total as far as the amount we need to sift through and the new cra rules are going to fundamentally change the Business Model and h■ ow we actually operate, how we meet our communities, how broad our communities are and who we need to serve so it makes you rethink how we go about the business of banking and i think thats the reason were all in the room and engaged in this conversation right now because we really need to push back so that we actually protect our model and can continue to provide the Financial Services and meet the needs of our community. Is there a particular to thf the panelists, that stands out to you, that causes you the most concern where if you had the ear of regulators youd■d love for them to hear x . Ill let you go first. If you ask me what i think has the potential to have the most unintended consequences overtime that would really impact our low to moderate income, its cra reform. I think were all in favor of cra reform we as an industry, and i think unintended consequences that have not been fully thought through. And we have to startrying to accomplish from a policy standpoint. Whats the outcome and work back from there, but when you put out the thousd page documents, its riddled with unintended consequences and i think thats the role of the industry to really have its voice heard is part of what the here. Its write comment letters and Pay Attention to these things. I wont get into it right now, but its very i speak up, as an industry, and sort of point out, look, practically, here is what might happen and it needs to be taken into consideration. You know, to that end, its a cumulative total. Its not any one. Each one you can pokeoles at and im grateful for the aba barry standing up for us flexibly. People talk all the time. Why there more de novo banks and people not coming into the industry . Is it because of the regulatory frame work . Why would someone want to put their capital into banking. You look at the largest banks, whats the s p 500 trading at, 10 to 25 times earning and layering regulation on regulation on regulation. I dont think that any of us on the stage are opposed to strong effective regulation, but we able to compete in the marketplace and deliver a reasonable return to our shareholders. If we dont have the youre not having capitol coming into the industry and then consolidation of a number of banks in the longterm a bad going to be a few and if you erode the industry. And by most consumers does pretty good job if we offer free checking, offer a bank on Certified Products as well, but if you underline the structural pritability of the industry, how are we supposed to deliver that . I think its going to drive more and the industry to invest in technology. You have to think about unintended technologies. Im going to say a couple of things, one is that thed that i because its had the effect of keeping out some who have a lot of money, who don intent. And we need to be mindful of that. So regulation has played a positive role in this whole process and ive seen that firsthand and i wont call any names here, but i would also say to what brent said, its about capitol. Talking about oxygen and a Capitalistic Society. If we want banking to be a core component of the Capitalistic Society here in the u. S. Weve got to track Human Capital and talent and thats why im proud of what we do at aba, even the emerging leaders, i was in a class with them and stand while im talking so you can see the impact of the new leaders coming into banking. [app who will be sitting on ths stage at some point in time leading this industry and its important that we have be sitting here very long, is the best way i could describe that, peter. As we think about regulation, i would tell you we go back tovil believe, or rob may have been on the stage and we talk about basel and doesnt affect my bank at the size today i believe it will have an impact on us. As vice chair theres a need to understand the impact of that. What im grateful is that chairman powell did say theyre so the point im making and i want to make to this audience is, our voices are being heard. Be sure youre doing what john just talked about, being sure your voice is heard from main street where you are, whether thats in mississippi, alaska, vermont. Cali■fornia, all of our voices cohesively, shall i say rowing the boat together, on the hill or registry agencies, theyre hearing the exact same message. Going back to brents comm the cumulative impact when you think about higher Capital Requirements, lower fee incomes, because traditionally fees that weve charged fornderd theyre no longer abusive, and then at the same time, sending more to implement software and technology thats necessary to track 1071 and interchange revenue was also under attack, so its coming from all different directions, its not just one Registry Agency thats writing a bunch of rules, its a bunch o of rules and its not coordinated so its coming out of all and it really does make bankers wonder if they have a profitable future. Let me follow up there, and you were passionate about, and inclusion. Youve moved into neighborhoods in your marketplace to try and reach as many people as possible. The way you can do that is because you generate revenue in other placesy for that. Can you talk a little more about that and the effect of Something Likereg ai, the debit change cut thats been proposed . Just about everybody in this country has a free Checking Accounts. Guess ■ ate not free. If costs for us to generate statements, to maintain them on every transaction through that, and we pay for that through revenue and other fees for other services that we offer within our institution. We are trying to get people into the Banking System. We now cash checks for noncustomers and pay bills for cash payments. And wre bring people into the Banking System and using the free Checking Account as an opportunity to broaden peoples access to Financial Services. Cra as a regular has as its goal home ownership, but consumers need to be in a bank and need to be bankable and how to use Financial Products to improve their life. So, theres a large continuum thats now being made on its going to make it hard for people to actually access the products. Brent, i want to give you the cnce to talk about one other item that may be flying lower on the radar screen, you mentioned to me back stage, gove proposal by the fdic. It sure has and if you look at the comment letters about the governments proposal its unbelievably strong against. I think that governance who doesnt believe in governance . To me this proposal is the wolf dressed in sheeps clothing. Governance is a thing, and there is if you have a Holding Company could potentially have to have two entirely separate boards. I think the vast majority of Holding Company boards and the bank boards arels and you can, because of conflict of interest, because they would no longer be independent based on the new governance standard proposal, imagine that, imagine trying to recruit directors. The line is already blurring between what is role and responsibility of management and the role and responsibility of the board of directors. In my mind its very clear, the board is for oversight, the management is for setting strategy and executi then the board can rein them in. Those lines are blurring and were getting it all the time. Our regulators want regular meetings with our Board Members. What do they know . Pretty soon the board needs to be literally a part of management so i think we need to strengthen those lines and i thts very, very insightful that county and state regulators put out a letter in opposition. They were so strong to the fdic proposal, dont try to sweet this. Just try to withdraw it in its entirety. Im going to shift in our time remaining, not to even the curr of business, but the future. Tell me about your bank right now. What youre investing about and john, ill begin with you. You just completed a merger in the process right now. As you look at, even with the registry challenges, some of the economic challenges. What has you excited each day when you go to the were investing in people and technology. All the challenges. At the end of the day were almost like all of us in the room. Were a really bang for real people and we help people and help communities. We provide services and financing, its fundamentally and noble profession, i do not understand why were in the cross hairs debate and targeted, et cetera. At the end of the day we do a lot of good. I see it every day, clients coming up to mbank, you do a gr the people, its really all about the people and in the end, no matter the challenge, no matter what it is, its all about the people so thebe■2 mer with American National is the latest and greatest, and exciting. Its people business and we help people, we fundame lot of people remember that that dont understand this industry. I am asking you. The two topics, the people, Human Capital aspect of it and Technology Side of it. I share with our board. Weve been doing this now for six plus years we have to act and behave like a Technology Company in the logistics of movi money. Thats the mantra across our board and our business. Having said that weve gone to a completely changed that in the midst of covid and we got that done, i would say on time, not quite under budget because the fees to unhook was a more than we budgeted and i hope most of you can appreciate that joke. When you look at the people side of it, peter, talk about the emerging leaders a moment ago, we had one here on our team and we actually, about five, right at five years ago, stood up a at that time im going to name it as it was, the millennium and i looked at the demographics of our customers, on the mature side, ill say. We brought in a board of young entrepreneurs, et cetera, would give us feedback and wed g devp opportunities and opportunities about banking. I will tell you if you look at the history of those team members, many of them have participated in what you would call shark tanks in our Metro Detroit area and or been placed in those. Were proud of that, but thats the ethos were trying to bring into our into the bank. So were very proud about the people opportunity because were going to need Human Capital to come and sit on this stage five years from now, 10 yenow, but also technology and being sure that were competitive with any other person or entity that wants to play in the Financial Services space. Julie. I think ill just echo what ken was saying, innovation has a lot theres a lot of opportunities for us to become more efficient in the institutions and products and services, easier, better. Well have to lot of things built up in the past as far as our operational processes so we can deliver better on behalf of our customers and customers, but it is the people and the emerging Leader Program here at aba has brought in such rich so we have opportunity for the industry. People passionate about their communities and doingel space a well for others. We talked about resiliency for people over the past year and youve got a personal story of resiliency and youve shared with some of the emerging leaders. Whats your outlook for the future given what youve been through over the last year or so . I could go on for a while. And not everyone knows your story. For those of you that dont know, about 14 months ago i was in a plane accident, a plane that went down, and the person sitting from me to john passed on impact and i was left without a Bright Outlook and im here and before you and so grateful. I am the luckiest guy in the rl debate with anyone. Ive said that before the plane accident because i do feel lucky because of what i get to do every day and who i with. I look at this stage and look at the people im surrounded with and they make me better, so,ha you know. [applause] resiliency is a choice. Its a choice for each of us. Stuff is going to happen. How are we going to overcome it. And thats what i love about the Banking Industry in the industry, right. A lot of it is david versus goliath. Were big enough to be nimble and lets figure it out. To me thats resiliency, back to the previous question, what excites me, its the passion, its the caring, that the teams have. Why do we do what we do . Because we want to create a Better Future. We want to create a Better Future for our clients, a Better Future for our employees, our teams. Im a big believer, you cant just sit back there and throw stones and pick apart everything thats wrong. We could talk all day long about whats wrong. The question as leaders, what are we going to do about it . How are we stepping up, how are we personally, how is our Organization Going to make a difference . That has me resiliency, we think we know whats going to happen. You know what were sure of, were going to be wrong and how are we going to adapt to that . E have here in washington in person, we have a whole host watching in the live stream. Whats your message to them, both the folks in the room here advocacy and getting involved and ill end with our chair and ill begin here with john and well go down the line. I think the message is simply, people need to get engaged and dont just be a bystander. Whatever matters to you, do something to try to accomplish a better outcome, and to your point, dont just criticize, thats easy, thats weak. Leadership is really about taking a stand. You also need to be empathetic and try to understand the perspective of others. We regulations and part of why i try to understand what is the perspective of some of these regulations that are coming at us. What is it that were trying to accomplish, get engaged and Pay Attention, dont just be a bystander. I would say be authentic. Live your values, and then tell the story. Never go with just numbers. Nobody numbers werent going to save anything. Tell you make a difference in your community and how your bankers are making a difference. We have a great story to tell, bankers are humble. We want to take a back seat and the spotlight, where theyre comfortable. Ladies and gentlemen, we have to tell our story, spotlight. If we dont tell our story in the absence of us, in the vacuum ofs telling the youll have all of the chicken littles telling everybody how bad things are. Thats not the case. It is our responsibility, our obligation, as leaders, to tell the story and a story, not just numbers, not just, hey, 87 of the people think thats great. Those are good and i appreciate those to have those in our back pocket. We need to talk about what are we doing to help the communitie . Peter, i have to go back to finish my story and talk about the■ millennial Advisory Board they wanted to rename ours selves, that name has a dirty connotation. Theyve renamed themselves the next gen board. The reason i bring that up, sometimes we have to listen with two versus talk, sometimes with one mouth, and taking the message Going Forward as we talk about banking, meaning we really have to take a stand and look at how do we have a positive impact on the current situations. Weve talked about all the regulatory issues that are taking place, but unitepo as a front, we can certainly row the boat together on this topic. Julie . Ill just reiterate whats been said here. Were here in d. C. And were coming from all of our districts, and were here to bring the message of whatperien the ground, for our customers, for what were doing for our industry and our community. ■■a were actually where the rubber meets the road and getting that message here and talking about what the regulations impact is on that consumer, how theyre 1071, asking 80 questions of new applicants. How is that going to make it easier for someone to start a business or buy a home and we actually in the industry support. Again, telling our story and making sure tt wre with people they see what their work here in d. C. Does to the experience at home. Weve got just a minute or so left here, im going to one last question, because i like asking this to bankers. Tell me a story, i dont need a name, a customer, an individual or business that your institution touched in some way this year that made a difference. Shared in the office or you heard in the office that made you feel good about what you do. And im letting you off julie start with you this time d sure, there was a developer ended up buying a building in a new building constructed in over 60 years. It is now a market of units to income individuals and its robust and the valuation, when it was imagined was million and now the valuation is at 12 million, so creating equity and putting it in peoples pockets. Thats what we do. Great. Weve got minneapolis who is in the mall of america, just outside of nordstroms. He actually got burned out on lake street as part of the Unrest Associated with George Floyds murder and had to sell clothing out of the trunk of his car. So we recently did some work with him, got a loan for h runn shop there inside of the mall of america, if you get a chance to go to minneapolis twin cities go by and visit him and buy something. Brent. A consumer customer that had 1200 in their account. There was fraud. And same day they reached out to us, were sorry that happened to you, fraud is prevalent. Here is the money back into your account, same day, well investigate it and take care of it. She reached out to me and wrote a letter, and brent, never in my life have i felt that my bank has had my bank. Thats what were about. Why not give our customers the benefit of the doubt . Sure theres bad actors that will take advantage, those are the minority. The majority of people like this fine woman that said, you know what . All i want is somebody that believes in me. John, the last word. Im thinking of ive got so many stories, a not for profit that supplies Affordable Housing and r out in the end and said we couldnt have done this without you, your teams creativity, devotion, thank you for working with us. This will make a difference in peoples lives. You know, to my point, mas what we do, this industry does a lot of good. People need to stay focused on that. All right. John, brent, kenneth, julie, thank you the four of you, the leadership you provided aba as well and for sharing your stories. [applause] please welcome the president of the south dakota bankers association, adam. Well, good morning. Today is national ag day, when we commemorate the role that farmers produce in our economy. Many of t banking customers. In south dakota, deeply commit today serving the ag daily. One way to support the nations producers, championing the credit for Rural Economy act also known as acre. As rob nichols mentioned in his opening remarks, its all about greater choices when seeking credit. The bill would enable lenders to exclude from gross income the interest received on loans from Farm Real Estate or agriculture facilities, along with interest on certain Home Mortgage loans i rural communities. This in turn allows banks to pass on lower rates to their ag and rural customers enabling them to stay competitive with other tax advantage organizations like Credit Unions and farm credit lenders. And in todays economy we all know what a difference that can make. Here is a short video that helps us explain acre. Lets take a look. Inflation and rising farmers smalltown residents are struggling for businesse own he the acre act will increase rural lending markets and drive down costs when all lenders are required to compete on the same terms, agriculture and rural borrowers win, the lower Interest Rates directly from lender of choice, meaning better rates and betr service. Learn more at aba. Com support acre. Acre is the common sense solution thats garnered impressive bipartisan support. To date 56 cosponsors, including 16 democrats and 40 republicans. Aba and the state associations are working to get this bill over the finish line, but we need your help. I want to visit aba. Com back slash acre. And whether youre an ag banker or not, this is legislation that we all need to support. Thank you. [applause] please welcome back to the state abas rob nichols. Thank you so much, carl. Before we move onto the next sessio id like to echo some of carls comments about acre. This is an incredibly important bill for our industry and one thats been an l years. Were so pleased to see the tremendous bipartisan support this bill has garnered and we need your help to keep this issue on the front burner for lawmakers, so please visit aba. Com support acre and send your letter of support now, as i teed up in my opening remark the regulatory landscape for our nations banks has shifted significantly over the past two years. Our next session brings together former federal regulators to offer their direction of Bank Regulation and the path for americas banks moving forward. It is my distinct pleasure to lc former cfpb director who recently began her tenure as president and ceo of the florida bankers association, former fdic chair mcwilliams who today is a manager partner atse, and a vice chair for supervision, randy quarrels who is executive director of the syno sure group. Please give our panelists a warm welcome. [applause] thank you, kathy. Randy. Thank you so much for taking time out of your incredibly busy schedules to visit with us. I can think of no three better executives to talk about the current regulatory landscape. And i talked around the regulatory capital, around basel 3, and i noted a full 90 ] of the comments that the Federal Reserve received were critical from a lot of groups, ag groups and housing and all sorts of groups. Where do you see the debate around capital going and what do you think the likely outcomes could be . Well, i think that the proposed capital rule to implement the last few section of the basel agreement was obviously highly overcalibrated in the United States. It was contrary to what the basel gro objective, which was implement these last pieces without significantly raising the overall level of capital, its contrary to how its being implemented across the country, and its contrary to the needs of the moment which is that■ particularly at a time when Monetary Policy is putting pressure to contract the economy, you dont want to dram increasing capital levels in the United States. So, i think thats widely understood, as you said. I think the Federal Reserve has taken on board the enormous number of comments from across the political spectrum. So i think youll see a significt calibration of the final capital rule when i suggested that iti ■ ■0 sh be withdrawn entirely and reproposed. Do you think that may happen . I think that it should happen. I think given the changes that needed to be made under the administrative procedure act, i dont think its possible to change the original proposal enough to put it in line with what was expected by basel and whats required by circumstances without the law requiring it to be reproposed. Thank you. Ill ask this next question of all of you, but if i may start with you, the broader topic of the governance and oversight of these regulatory agencies. You led the fdic for a number of years effectively in our view. Congressional oversight process as a regulatory leader and whats your lens on the governance of these agencies today . So, ill this question not as the former fdic chairman, but the Banking Committee. Frankly, theyre supposed to be checks and balances in the agencies, especially multimember board agencies and the checks and balances are]q supposed to go like it is, and bring you evidence. Preferably quantitative evidence why thi changed. You discuss thing internally and it comes up to you refine things internally and comes up to the board for a vote. Board and hopefully that is better. When that breaks down two checks and balances in the system oversight and congressional action and the other one is judicial and i often say this to people who matter at these agencies,■ you get sued. And they say well i do appreciate the agency, i love the agency, but i hope you get sued and i hope you lose. The reason is when you promulgate rules and basically practice that i outlined or the downfall of the administrative oc randy just spoke, thats reasonable, that you only have two outcomes left, judicial and congressional and god congress future, you hope you go to court. [applause] thank you. Kathy or randy, anything todd on the governance of the agencies before i get into some other topics . No, i think that jelena is right. I was a cstaffer, and then worked in the executive branch. There are three branches of government for a reason and taking advantage of the judicial arm is the police we find ourselves, again, as industry with regulators who are really standing well beyond the scope that was given to them by congress. Congressional oversightnd certaa role, but we are also watching whats happening in congress right now and wt theyre unfortunately not able to get across the line on. So there are a lot of other things that congress is spending time on and so the ability to really get in the weeds and understand these things, i think basel three, the end game is a fantastic example what you can d a breaking that down and explaining bank capital and why it impacts communities and how it impacts actual,■. Small businesses and communities and getting that together and bringing that forward, the fed has to respond to it and that at least is a very positive example. But if they decide to move forward anyway, then, yes, we have to take that judic conside. And i think suing the regulators is not a declaration of war. In my view, its consulting the dictionary on a disputed scrabble play. [laughter] well, we apparently are tim. Its a useful discipline. When my sister knows if she puts down ill look in the dictionary and it constrains her. I like that. Randy, il start with you and move back this way. Were about a year after the spring bank failure, so id be interested in everyone on the panel, lessons learned. One. Things that weve seen that we think is a little alarming is what appears to be kind of a taih we thought was a very sensible approach from a registry supervisory standpoint so ill ask an openended question, what do you think weve learned over the last year, and are our impressions that tailoring is we are moving away from iloring,yo that and are you equally as concerned . Ill start with you and move this way . Yeah, obviously the capital oposal a think the mindset of the regulators particularly has moved away from the tailoring concept and i do think thats a mistake, the capital proposal most concrete example of it, but i think supervisory practices as well have moved away from the concept of sort of risk based approach. I dont think i think thats a mis lessons to be learned from fcb, for example, that was an entirely different issue than tailoring. And it exposed certain issues that have existed for a long time in bank supervision. But most significantly, that was simply a result again of Monetary Policy as the same as the savings and loan, the whole savings and loan industry in the 80s was a result of the Monetary Policy of the 1970s. I think were learning the wrong lessons and theyre applying them quite asiduously and i think that the ideas benefits from the range of Financial Institutions that is supported by a tailoring approach. Both in regulation and in supervision. Many other countries around the world have a handful of banks from the fact that we have a Great Variety of banks all across the country. And thats put in danger if you abandon the approach to tailoring. Thank you. So i think the main issue th regulations supervision and enforcement has become incredibly political. And politicizing that process has actually realized effects and dangers and one of them is that when you have situations like we were faced with last march when liquidity was draining out of these bank that the outflow of deposits on a per hour basis was something that hasnt been seen before in the banking world. And i without putting anybody on the spot here, and we cant really see you so im not puttispot, but h in the room could survive that kind of outflow of deposits. So i do think that the issue really is we can do as, you know, a postmortem ad nauseam, would could have been, should have been done, how to do it in the future, but really the unfortunate thing whenever you have an event like that this a town like this, Political Forces kick first joined the United States senate i was told about this imagery shelf and the imagery slf is not as imagery as you would think. Kind of you put a different provisions that youre going to put into law on the shelf. And then y■■a crisis so that you can go that one, that one, i can get that one through now because we have a crisis, so i question on tailoring, there was no nexxis that has been established in an objective way between tailoring and what was done in these banks. It was an excuse to make changes that you want to make. So i think thats a problem. If you really want to talk about what should have been, could have been done differently, maybe we dont politicize the issue of bank mergers in this country. Maybe we allow Market Forces to do what Market Forces do in a t something that frankly, has not been a part of this discussion, at least not openly. And just picking up on the importance of tailoring and how it has gotten us to this point in terms of robust system and service that is we have in this country. Thats the dynamic that i really hope that regulators take into account and in doing cost benefit analysis. Thats what theyre supposed to do. And thats taking into consideration the wider impacts that many of our letters certainly harp on, its not just about, you know, banks providing these services, we know whats happening. The more the regulators put their, you know, hands around our neck, the more things squeeze out the other side and weve got, again, all of these and i will say Tech Industry for a little while myself, so i appreciate the differently regulated whether its Credit Unions or fintecs or big tech. And it needs to be taken into consideration and impact again, what that does to the services that are available and the protections in place for consumers. So, im going to sta started the capital question with randy. And the events of last year sparked the dialogs around the future of our nations deposit insurance system and there have opinion calls and debate around modernizing that system and perhaps changing it. In doddfrank we lifted the number 14 years ago to 250,000. The question now, should it be higher or higher for noninterest bearing perhaps payroll accounts. Obviously the fdic here, the central figure in this debate, but they cant do it without congress. Debate, if you had a magic wand or utopia, what do you think the systems should look like . If i had a magic wand i would u [laughter] so, ill say that on the deposit insurance, i have been asked this question before and when i was a the fdic, i didnt actually know this coming in, how complex the deposit assessments formu ir di for small banks, a different formula, for large banks, more complex, and a lot o ratings, y Business Model, you know, the risk of your portfolio, et cetera. So, its actually more complex than people think. Its not like you look at 100 million and times this and you get the x amount. The one thing ive heard from any banker, frankly, oh, would i love to pay more. You know that. If you would like to pay more, let me know, ill have i can speed dial the people who matter. The truth of the matter is that the this. Right. And the cost is usually born by the entities and then some passed on to consumers, maybe not dollar for dollar, but in some form. So i think that thats the events of last march name them, however you want, unfortunate should not have happened, didnt have to happen, could have been prevented, but truth of the matter is that all banks ended up paying for the special assessment that was imposed on the Banking Industry as a result of the failures of these banks and the governments frankly, handling of the resolutions, and receiverships. So, were at the point where. Whats happening with the economy, people say we dont have real inflation, some people say we do. I dont know thaow impose extra i dont know that i have a moral objection to raising the deposit insurance limits or not, but i want people to a vacuum. Its like a balloon you squeeze it here, it comes out there. Before you squeeze it you better know what youre doing. Any views on that topic . Certainly, jelena is right, were in a precarious position. While we call insurance on deposits, we in the room seems not the expectations to be in the public is. The notion that all deposits to be insured and the government is backing up these things and its also something that is not well understood. The taxpayers paying for failed banks, again, not understood in terms of all this is paid for o so its incumbent to get that edge message out and clarifying it and that fulsome policy discussion and review and bringing facts to the table. They i do have my head of governmentelations is in the room and loves saying this, but every debate in tallahassee, well, the facts while interesting, are completely irrelevant to the political conversation. [laughter] so thats where we find ourselves today, but i still believe we have a responsibility to bring those facts to the table. And■e you pull those off the shelf when they get to be in the right argument at the time, that wiltoday. Some might say thats not just the case in tallahassee. Randy, anything on deposit insurance modernization . I agree very much that we shouldnt move to into a system oft insurance, 10t insurance, its too expensive for the industry. It would create moral hazard in the financial system. I think the answer really is the is to revitalize the provision of liquidity from the Federal Reserve in a way that has really atrophied where they ensure their own liquidity, banks of every size, which resulted in financial crisis after financial crisis, which is why we created the fed. It tries to restrain the likelihood of a fun, but if were living in a world where that liquidity need is going to be greater because of changes in technology and communication and so forth, so that you just its just going to overwhelm the system. We need to revitalize the central position of liquidity from the Federal Reserve, which is the reason for the creation in the first place. I think thats a better answer than trying to significantly increase. Im going to ask questions about fees and interchange quickly. You mentioned, randy, you do not think that the fed is obligated to update the rule around interchange. Can you expand on that . This is hot debate right now. If you look at the if you look at the law and if you look at how the costs ofthe mean, the law requires that the Federal Reserve set the rules in light of the costs, but if you look at the costs across the entire industry, theres absolutely no need to try to bring down the sort of charges currently. Thats, you know, you can interpret the law, i think thats a little bit after stretch, but the law does not require it as the claim has been. Were just following the law. So and i think that the consequences of doing so are quite, you know, are quite adverse. It was reasonable, i disagreed with it at the time, but it was a reasonable proposal to say, if you put these limits in place, that will shift some of the consumer surplus from the banks to the consumer. Weve seen in practice that is simply shifts the surplus to theres no particular reason for the government to care about the surplus between the banks and walmart. Thats up to ban and walmart, so they should stay out of it. [applause] thank you. Now on tubject of fees, i talked about that in the opening remarks, we have three different pce against the cpb. Currently theyre saying theyre junk fees and looping them in with all other industrial sectors. We take offense at that. We think that banks should be able to charge fees for services and disclose them and how do you see this debate . Ill start with you, kathy, how do you see that debate going . Do you think that calling them junk fees makes we think that really misses the mark. Whats your take in this debate . You know, it is always hard when youre playing defense. Service that people using. From my standpoint its really about those people who claim to be helped in this scenario are y the very people who will suffer from the lack of the service being available to them. But that seems to be a completely unconvincing i suppose to serving the regulators. So it absolutely is the right place to be challenging this in the court. The basis of Consumer Protection is transparency and disclosure. Certainly you have the direction to go with udaap but thats also weve got decades of cases around a lease t unfair and deceptive acts and practices that are well documented and Consumer Protection. So it really is about disclosure. And so when the provided to the consumer, the consumer has a choice to make any competitive Banking System, that should be their choice to make and it certainly is a business decision how you recoup the business fees and cost of doing business and offering those services. So it isnftunateute■i find ourselves in a place where thats the remedy we have to seek. Are right. So cra, we are suing your former agencies, and banks are passionate advocates of lifting up all peoples, all across the United States. And have for a long t so thats point number one. Number two we do think the rule should be modernized. We apsley think the rules should be modernized the way banks serve their customers and clients indignities is different than they could to go when the room will initially came about. But the role as proposed actually grades disincentives for banks to serve all their Community Spirit we are challenging this rule in the courts is quite ren probably res rule proposal, i will start with you, what is your take on this debate over cra . When you saw that proposed rule did you also, we are also skeptical of what was your take . As a veteran of Many Political in washington, d. C. At the Federal Reserve, and the United States senate and the yoe rulemaking that ruffled more feathers than many others, jenna, you say basel iii people think its like, this spice you put in the suit. You say of their like do the right thing. So i do think that agencies should be challenged on how they are promulgated. And is in the, when internal assistance of checks and balances so you resort to tr or congressional processes. And i do think the cra, this is one iteration now, fifth over the past six years . I think people are just whiplash of the changes if we could frany sensibly put politics aside and just work on what matters, which the new role produce more for the communities that it is meant by law from 1977 to protect, right . Which is are you helping the communities that are low and moderate income committees, are you providing Banking Services in a drivein making ser■p■lces the committees need . Its not that complicated. There are think that a complicated. Any kind of a word again with this man is complicated. This is actually you know not that complicated. Is it more or is it less . When w w to on the role when i was in the office, i basically i did ask ceos, a few i said can you take the proposal as we proposed it, can you put it in your system, came to run the numbers and can you tell me is that more for the community or is it less . That should be the bottom line, right . And i dont know that thats where we are. I havent seen seen objective evidence to tilt thats where we are. If we are not there, then you should be pursuing whatever remedies you can pursue to challenge of the role. Thank you. Randy. Former agency had the pan here. I, i completely agree that thum of things that could and ought to be done in order to modernize see a. The practice have been come classified on certain set of things that you do. It was very formulaic, but again what has been put in place is too complicated and complexity results in unintended consequences. ■ and all of that was unnecessary i think. The closer you get to the issues that were relatively straightforward. Kathy, anything further . Just how political this is it gets unfortunate because the intention of cra is absolutely laudable. Thats one minute he went into business to begin with, to serve certainly the entire capital system and the notion of this country for opportunity of providing opportunity, thats a we should talking about. But, of course, thats that with the rule will actually do and that is the whole complex. The last thing i will see on the politicization is this was one fdic Board Meeting certainly while we were there where we had members of Congress Show up for the boardlany. Remember that, but there is a lot of passion around this, understandably given the purpose of the law. But we all know the outcomes are not matching with the purpose. So we running low on time. Im going to give each of you an opportunity to share a final word just on the kind of direction, the regulatory dialogue and climate around banks today, anything they would not give covered. Randy, i will start with you. I think that the, i guess for the lightning round, i think the relationship currently between regulatory and sobriety system in the banks is far too adversarial. And that is not good from the point of view of the public as weof the industry. When there is more interaction and cooperation to a better result. Thank you. I will say building upon what randy said, lay low. Dont stick your neck out. Thats actually too bad advice and give it because the imbibe is s a other than just plain vanilla stuff, you going to be in perilous situation and dire straits. So this is not the time to be incredibly inventive, sadly, but serving your communities and just dont, dont come up with anything new for now. [laughing] evolution overrated. [laughing] kathy, final word. I think part of this also as randy was touching on the supervisory process and that relationship, i think were finding ourselves in the police were again theres a generational change happening amongst the examination staff and theres an expertise gap therefore so that opportunity to be working with the regulators in concert in a way that is good for the overa Banking System, its not there. I will say there is patience as yellen said, and patient still trying to have that Good Relationship by bringing them its tedious. Ain the business you all have to do it all the time, and so that i think work needs to continue. Please join me inha randy, jelena and kathy for being here today. [applause] please join me in welcoming the president and ceo of lake central bank, brian. Good morning, e its truly honored to have the opportunity to introduce our next speaker. Representative tom represent minnesota sixth Congressional District since 2015 and he has assert as a House Majority whip since 2023. Since hes been in congress i have been fortunate to have had the opportunity to get to know him well as a of of a underground perspective to him and to a step on the main issues facing banks today. As a member of the Financial Services committee, cant imrh n to our perspectives. Where fortune to have them here today to share his views banking policy and i know its going to be a fantastic conversation. So would you please join me in welcoming House Majority whip tom emmer to the sta conversation with abas had a congressional relations, kirsten sutton. Pplause] cant emmer, so good to see you. Thank you for being here. For bankers and run, cant emmer hold a leadership position in the house of representatives. Lots going on the house now with republicans. We occasionally see things in the news here and there, so the role that congressman emmer place is with and i wanted to get started off and explain a little bit of what that role entails . I will. First off, welcome to washington, d. C. Great to be with a bunch of free market entrepreneurs the Banking Committee in this country. God bless you for what you do. Majority whip, now, if we dont know what it is, its funny, most people one up as because they think im supposed to know all that. But youre not. The speaks everything. The speaker is in charge of the capitol hill police. The speaker is in charge of the architect of the capitol. Literally everything on the■d congressional campus is under the speakers direction including the agenda for theder is the number two position, and ordinarily this is the great job because what majority leader our friend Steve Scalise from louisiana is he built a calendar for the year and then he builds out with, shares with different committees for schedule for when were going to vote on what were going to vote on. And again i say thats ordinarily a pretty good job. The problem you is the majority is 218. Right now we have 290. We started this congress three e house is the with job which i have. It is without a doubt the best job in the house when youre such a because we work with everybody. If youre going to get something across the floor, the speaker and the majority leader have to do it through our office. And its been very interesting. Everybody is getting along so well. [laughing] a lot of love and trust in washington. Easiest job in house, thats what i was thinking. Has anyone seen house of does anyone watch that . That is about the whip, exactly what your job is like to come right. Was idle think that is exactly like thats not . That hasnteen your experience . Interesting. Faceting for us is looking from the outside, leaders can set the for sched o responsibility to be counted votes and knowing where people are which feels different this congress i think than the previous congresses. Our bankers watch the news. We know former Speaker Mccarthy went through a number ofotesecame speaker and that we have a new speaker. And so when you aspire to become more senior, when you were a freshman member of congress, i got to meet them back in can were both working to give a house Financial Services committee, the best committee and the house, as you thought about what the throw what look like as you became more senior, im guessing that the experience you had is probably not what you thought it would be but is that i could . How hasnt actually been in practice . I had to back different lives in congress. The first life is with the Financial Services industry. Which i briefly mentioned it. I believe this industry is literally what to find freedom in this country. Nowhere else in the world can dg with the Business Plan for the next harleydavidson, the next amazon, the next walt disney into a local bank and enter into a risky situation with somebody on main street. Just doesnt happen anywhere else. Congress, your question is m about how did i i prepare to n this position. I say i live to separate life because one is a policy side which i refuse to give up. Kevin mccarthy came to me after i was elected with eddie said you know you could spend your committee aivoing to be ply enough the whips job and i said absolutely not. This is what i am in congress for an ongoing, i think you just have to manage your time well. At a a great team. But the other part of my life is that i spent the last five years, first as the chair of the National Republican Congressional Committee which is the campaign arm for the House Republicans. Lly i traveled the country with kevin raising money, recruiting candidates in winning elections. We were the only ones to win at the last two cycle cycles. A formula which thats not what were here for today. It works but heres what it did for me. I learned every distr understanf not only the members but the people that their answering to k about the majority leader and the speaker. The reason we are key to what happens in the house is because i can have relationships with Brian Fitzpatrick would be considered right of center suburban philadelphia all the way to Thomas Massey who■a is a libertarian anarchist, he was a libertarian, from kentucky. Everybody in between. And you need to know what drives them, what they can and cant do. I will tell you the other thing i did when you started, they thought because way i handled the Campaign Committee that i would t tom delay, who was affectionately nicknamed the hammer, came from your home state. Because im three months of individual conversations, Small Group Meetings until we get find that intersection which is basically ow as we were leaving for the easter break. Said this is the intersection of the conference, and he laughed turkey said well, you go and socialize the membership over easter weekend he said, and if they can pass we are goi■xng too it us in his weekend when we get back. And you remember we did something that nobody expected we were going to be able to do. Its interesting how psychological your job is. I think as a member of congress we have here today knows the republican conference better than anyone else. You said something that we touch on with our bankers that it want to come back to. Your first point is what is going on in your district. Are you taking care of your constituents . One of the things we tell our bankers the most powerful person in the halls of congress is a constituent. So we have a team of that are working with your team, with members of every Committee Really weve got so many issues and that work is impord importaf the work of our bankers have left their families, banks to come in d. C. We will talk ae with you to a successful meeting but he wanted to thank you for holding on to spot of the house Financial Services committee because con amber has been a champion for the Banking Industry congressman emmer it is pretty uncommon the folks hold on to that■ res so incredil that you did that. As bankers are preparingoill toh their members, if you could give a little bit of context just about what it feels like on the hill right now. We know the Credit Unions were just here. The retailers were just here and there are myriads of other groups that are sending tons of constituents up to the hill. The hill. Theres a lot going on legislatively. So i know its busy but just helping our bankers prepare for it, they are walking to an office wit thatxpress might feel that. Banking issues may not be totally top of my for everyone we are meaty whisper it depends on how you were dating it. Takiy from your business, your family, not necessarily in that order, and for using your resources to be and be part of this. You are incredibly impactful. And descriptive everybody back after thenl socalled pandemic, because you cant get Business Done in washington, d. C. Without having people here. This is an incrediblyus time. So just be prepared. I think two weeks ago there were 6000 people with come in to washington. I think you were here at a summertime, right . I dont know if the numbers are the same but everybody is impeding for time and understand your message■u believe, on the house side and only speak to the house because of a reference the senator from massachusetts who will not be named, there are some who view what you do in your industry as innately selfish greedy and are kind of put all kinds of restrictions on it. You dont have quite as much in the house. The house whether its republican or democrat, grated he got to be able to tell between the two where somebody is and you should find out whether at, which is pretty easy to tell on im sure kiersten haa group of giving you some of this information. But just so you let somebody receptive to what you do on main street of you come from. You are the primary funder of new opportunities. You are the thing t alive. I artie went into all these businesses that started in ia garage with some startup capital from a local bank or. Ll alive and well with a lot of you in what youre doing and i think think you just have to remind the members this is what we do, and by the way you could help us a lot by protecting this and making some changes, like were trying to do, my friend brian bronze told that a couple years back when i started this job, you know, if minnesotas going to legalize marijuana, i should be able to make a legitimate basis for whatev government has been slow to get that done. We almost had it done last time. Thank you for your support for the safe banking act. But thats an example. [applause] bryant would not be satisfied until it is done. Het÷s back there waiting jut so you know. The conversation will continue. But weve had a few challenges with republican offices who have concerns about legalization and brian i cant say better than brian did. For industry its was not about that. Its about the ability of banks to provide Banking Services to any entity that is legally operating within that space. I know former Speaker Mccarthy was not a huge fan. Set that are not this is a huge fans but in addition to thank you for your support and lot to a member both on the committee and serving in Republican Leadership supporting a priority of the Banking Industry. Because of the members look, right, if you are taking a new member of congress, right, a legislative assistant or new member you usually three or four people that you go at, how they vote on something or if they cosponsored something. Congressman emmer is one of those people picks up means a lot to us that we have your support have any advice for us on states to do in a house with House Republicans we want more cosponsors on the bill. Its actually what isfirst o. Youre not . No. [laughing] sorry. You would think im in congress, im stone [laughing] it isnt my deal. Jackie and i race seven kids and its like to try tohe right dec. I have a lot of concerns about this mind altering substance. That part of side, i think the message is its not how y about this. It is whether or not it is illegitimate legal business. Like it o your state has enacted laws creating this a legal entity that is legitimate, then our bankers should be allowed to bake it. Thats my belief. I think thats the approach. Is that what you are a water love her or hate her. Its more this is a legitimate business that has been approved by the Representative Government of that state. Thats right. 38 states to pick and board also is we sometimes need folks on the right and left telling banks you cannot link to this industry this industry. Of course we think banks should be in the position to make the decision based on the Business Models, expertise. We really appreciate of your help here. Theres another Financial Services policy issued you been a leader on data want to raise, and that is this concept of Central Bank Digital currency which may be similar to some of our bankers and real. An idea being examined by the fed and one that you i think taken some hits at the edit the fed would be stepping in and providing a retail that could be direct competitor with the private sector. I was one easy chair a little bit about your legislation related to see bcd and we see that moving or share which expenses beent with colleagues. First off, this is the other thing for our bankers. You need to have the opportunity to benefit fromhe innovation thats out there, right . You can create all kinds of new opportunities if we encompass will start to get some direction, especially comes to digital assets. But that part aside, the Central Bank Digital currency, which ive been working on this, this is by tensor encompassed eyster working on this nine years ago. The first time i offered legislation to outlaw a cen■tran 2017. But i was in the minority. I mean, this is how it works around you. Its like turning a supertanker at sea, you slowly start to republicans and democrats, as to why it is your take a position thats what i told one of our more extreme members, great person who are said to them one day come if you just and direct all your attention to these guys over here and they are guys alone, and they said well, here, republicans got to grow a backbone, start flooding prices that may be true but you and i have an obligation to bring them with us. Thats what we dont Central Bank Digital currency get what i started this seven or ages ago youve listened to republicans democrats on the Financial Services committee, you might remember where they all sounded the same. I mean this is where all the drug dealers hang out, this is thats all they knew. In fact, its much more than that. Are the bad guys . Sure, there are bad guys in there but cash is looking when it comes to this. So as this default what did they want . The existing structure needs to be able to be allowed to evolve into the 21st century, and you dont do that by giving the government control over a Central Bank Digital currency because thats the next step to a banking world that i do want to see. But more importantly, when it started it was like we are falling behind the chinese. We do not want to emulate the Chinese Communist party who are using Central Bank Digital currency, the digit juao the population. To create scores on whether they are living a properly and buying the right food and products. Its outrageous that we do not want to be the purpose of the legislation that kirsten is bring up, simply says the prohibited from creating a Central Bank Digital currency unless a transparent and the big one, private. We should not be playing with americans privacy. You can givep, y could give up your liberty out of fear for your safety, and dont believe that the government is o you. We are typically in my mind the best solution when it comes to making decisions how to protect ourselves. Absolutely. Yeah. [applause] so when we hear about congress, we areri about drama amongst the parties entering a lot about government funding. So i know theres a lot of challenges bringing things to the floor and building consensus that would be curious what you expect to see made out of house Financial Services committee. Chairman mccain is retiring at the end of this term of what you expect to see legislated in committee . Is of the possibility anything could be released to the four . I do. Een an amazing job. By doing when you get any credit for statement of Financial Service committee, one of the reasons ive been able to do is make henry was truly my mentor when i first came to congress, patrick has been very helpful in helping me to maintain both jobs and do what you need to do because theres a sacrifice. I cant do everything you would normally do but hs allowed me to follow my passion and to the stuff that im really passionate about. Hes got two pieces of legislation, hes got more, of thewo that a very intriguing to me that i think are going to find the way to the floor, the first one ieleady. His team has done an amazing job working not only themselves but with all of our members on the Market Structure bill for digital assets. Hink thats a great start. Hes also got some stablecoins legislation that hes been working on with d the white house disputed we noticed that one, too. That when has got some work still needs be done. I think patrick would tell you ating to find a way to make that work because look, this is all about the future of the dollar. H its that just about the future of the greatest Banking System in the world financial industry system, industry in the world. Its about the future. And if you got stablecoins out there that literally are backed up by u. S. Dollars, imagine the opportunities that wl want to deal in the dollar. Stablecoins could be the answer to that where youve got, you got stablecoins. Example that is used by howard which i love is when he says imagine a cab driver in brazil. You would like to do business with u. S. Dollars but he has no access to them right now. If he had a stablecoins that was backed up by u. S. Dollars, now even the brazilian taxicab driver can deal in u. S. Dollars. It would be great for this country. He would be great for our financial industry, it would be better for the world. We appreciate his leadership and taking something thats hard to do to try to create a path forthe ranking member, with the Federal Reserve, treasury come some and partners interested in that. Of c to ensure nonbanks are treated similarly to banks and we appreciate that a lot with with your office, with the childrens officnds conversations continue. Bryan knows come again im picking on bryan bruns. He is the banker of the year, Something Like that. But he knows that when you talk to me about issues that others are getting a benefit that you are not, i will hear often well, you should take away their opportunity. You know what i prefer . Why do we get the opportunity to you . Why dont we give you the same opportunity to do the things that these other entities are doing so that you cant into the 21st century . We would love that. We would love that. Two questions quick but i noticd theres been a lot, a lot of conversations going on tiktok and a note the house voted. So for bankers think about incorporating tiktok into their social media plans, any words of wisdom or advice . Say is to all of you is i have not been in the skiff so i have not had the Confidential National in trouble i repeating something ive never heard but i can tell you that as a guy whos responsible for that getting across the floor, it was very telling when you had 50 members of the energy and commerce committee, republicans and democrats, though have this this is a this is a divestiture, the Chinese Communist party ontrol tiktok. I mean this world is all about data right now. They are collecting data, which is what the risk is. Probably deeper than that but thats as much as i can say about dr. Hill because if folks aro reading about are hearing about the context is sorted in congress banning tiktok, assume theres more to the story there but as folks i be talking about it, wanted to get speed is its not a band. Just a moment it is not a banter they will have 165 days and that it makes it to society, which te president has indicated he would, it will be when it is 65 days within which they would have to divest. Steven mnuchin and others are already talked talking a. Whatever it is, just cant be owned by the chinese. crty. I would at this, kirsten, youve got to be very, what, you have to Pay Attention to what immediately with somef t they should because the headline in a minneapolis paper was minnesota gop members vote to ban tiktok. First its not a bad, and second, two democrats voted with us. [laughing] this has been the fastest 30 minutes ever. We could talk to you p for hour. My last question, to our bankers in the audience with so many issues coming at the Banking Industry. We just heard from former regulars who talk about onslaught of rules come from the regulatory agencies that are members having to do with. We have legislative issues and recognizing its hard to get things through congress, there are five issues were trying to prioritize and talk about, i think you can come with acre, our act lending bill to add more money to ag committee spirit we would love to have hearing on credit union oversight, more than 20 have deep, deep concerns over the way the bureau finalize the 1071 role. Congress did cra on that. Ground to cover. Five issues. We try to narrow it down but thats still a lot. So for folks are getting ready to go to the hillhis afternoon you have any tips or suggestions on how to to have a successful just understand, on the committee, Patrick Mchenry and his staff will determine which ones were going to be pushing for. If anything, your representatives that your meeting with you want tourage to patrick about moving one or all five of these during this congress. The bigger thing i could tell he is just understand the pressure that these numbers are going to be under. Its not just pressure from you. We have got the funding bills that had to be passed before the end of the week. Their plates are going to be i had a minnesotan come not from the banking community, some of those with the goo, text me at say hey im in town tomorrow. Got time for dinner . No, im saving that for the bankers obviously. Atbats, theyre going to be under a lot of pressure because the days are going to be long because theyre short, right . You get basically three or four days before this thing shuts down. Get an. Thank you so much. Please join me in thanking congressman emmer. Thank you so much. [applause] theres no other Banking Organization doing business in the United States Congress Returns later today facing another deadline of friday atnight eastern to fund the government andvert a partial shutdown. The hses back at noon easter a along with the senate po vote on the six remaining spending bil for 2024 to fund federal government has the deadle later this week. Later todayow■n so9sider several Foreign Policy bills including legislation t bck the sale of american sensitive personal data b da brokers to foreign adversaries. The Senate Returns today at 3 p. M. Eastern. Lawmakers will vote on the confirmation of Service Employees International Union general counsel nicole bernero serve as a u. S. Court of appeals judge for t Fourth Circuit at that 5 30 p. M. Eastern if confirmed to be the first openly lgbtq judge to serve on tt court. Watch live coverage of the house cspan, the senate on cspan2, and remind you can watch all our congressional coverage with our free video at cspan now or online at csp. Org. Today Senate Intelligence Committee Chair mark warner discusses National Cybersecurity at the crowdstke summit in washington, d. C. Li coverage begins just after noon eastern on cspan2, cspan now our free mile veo at, and online at cspan. Org. Celebrating the 20th anniversary of our annual studentcam documentary competition. And High School Students across the country to look forward while considering the past. High loving the milestone of the university in each parts as it was given 20 years into the future or 20 years into the pastor in response we received ipiring and thoughtprovoking documentaries from more than 3200 students across 42 states through conducting Indepth Research and interviews with experts. Students tackled critical topics such as technology and social media. Ai has already started replacing humans andbs. Challenges inclined. Can no longer sustain discussion about criminal justice, race, bias and the american criminal justice system. Winners of studentcam 2024 of in the middle School Division the first prize goes to from isaac graham nudeid in mountain view, california. The documentary beyond just scifi, i reshaping americas tomorrow delves into the evolving world of Artificial Intelligence. High school eastern divisions first prize is awarded silver spring, maryland, for his film the purple line. Climate change and reimagining the future of americas suburbs. Regatta johnson and leah from Troy Athens High School in detroit, michigan, claim the first prize in the High School Central division with the production and seen heroes. Ca of america. In ayes Western Division brendan, emily and max from Palo Alto Senior High School in california earned first prize for threats threads of h takes a critical look at the fact fashion issue at a top award of 5000 for grand prize goes to nate and jonah, tenth graders at Weston High School in connecticut. There documentary innocence held hostage, navigating past and future conflicts with iran deals with the time and sensitive subject and features interviews with a former iranian hostage. Instead of saying so youre free to leave, i was blindfolded, handcuffed, thrown in the back of a conference taken straight to the prison. It brings me great joy out of 3200 students who participate in this competition thisou guys are the grand Prize Winners of studentcam 2024. Oh, my god, thank you. Thank you so much. [laughing] this is a huge honor. We are so grateful for this opportunity. Really thank you a lot. We extend our gratitude to the educators, parents and participants who have supported each of these young filmmakers on their creative journey. Congratulations to all our winners. Dont miss out, the top winning documentaries will be broadcast on cspan starting april 1, place you can catch each other when hundred 50 awardwinning online anytime at studentcam. Org. Join us in celebrating the young mize as a share that opinion that are important to them and affect our world. Irs commissioner Daniel Werfel discuss modernizing and digitizing the internal Inflation Reduction Act have had on taxpayers. He also talks about the importance of irs funding, Common Misconceptions about the■ agency a decision for the future. Future. This is hosted by american universitys school of business. It runs just over an hour. ■c■b