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March 1, 2013

News for the retail banking industry

Top Story

FHA will issue its own QM rule
The Federal Housing Administration says it will publish its own version of a rule issued by the Consumer Financial Protection Bureau that addresses a borrower's ability to repay a mortgage. The Dodd-Frank Act allows the FHA to devise its own qualified-mortgage rule. The agency says upcoming fee increases could disqualify FHA loans from the CFPB's definition. Bloomberg (2/28)

Retail Banking Roundup

Banks make good on promise to boost small-business lending
Banks say they are fulfilling a pledge made two years ago to the White House to increase small-business credit. Lending to borrowers with less than $20 million in annual revenue climbed 21% at Citigroup and 28% at Bank of America last year compared with 2011. AmericanBanker.com (free registration) (2/28)

First Niagara seeks to attract small businesses with new options
First Niagara Financial Group is launching two checking options aimed at small-business customers. Last year the bank added a small-business division. The Buffalo News (N.Y.) (2/26)

Industry News

Report: Student-loan delinquencies rising
Thirty-five percent of student-loan borrowers under age 30 are at least 90 days overdue on payments, an increase from the 26% reported in 2008 and 21% in 2004, according to a report by the Federal Reserve Bank of New York. Almost 47% of borrowers have balances between $10,000 and $50,000, up from 38% in 2005, the report says. The Wall Street Journal (2/28)

Auto, student and credit card loans push consumer debt up in Q4
Debt in American households rose 0.3% in the fourth quarter, or $31 billion, to $11.34 trillion, according to a Federal Reserve Bank of New York survey. Debt climbed in student and auto loans, and credit card balances, the report shows. Bloomberg Businessweek (2/28)

Cyberattacks can increase customer mistrust, Raskin says
Federal Reserve Board Gov. Sarah Bloom Raskin warns that the increasing number of cyberattacks on financial institutions can damage the industry's reputation and could lead to the "total loss of consumer confidence." While joint efforts are underway between the government and banks to ward off such attacks, such incidents fuel customer mistrust of banks, she says. AmericanBanker.com (free registration) (2/28)

Legislative Affairs

Congress gives up on efforts to avoid sequestration
Hopes of averting $85 billion of spending cuts set to take effect today disappeared as Congress left the U.S. Capitol for the weekend. Congressional leaders are scheduled to meet with President Barack Obama today to talk about the matter, but Obama has offered little optimism that the effort will accomplish anything. In the House, Republicans are now focused on the March 27 deadline for preventing a government shutdown. The Washington Post (2/28), CNN (3/1), The New York Times (tiered subscription model) (2/28)

Bipartisan duo plans legislation targeting "too big to fail"
Sens. Sherrod Brown, D-Ohio, and David Vitter, R-La., say they plan to introduce a bill that would address concerns about banks that are "too big to fail," partly by requiring large banks to hold more capital. Meanwhile, JPMorgan Chase CEO Jamie Dimon says processes need to be in place to allow banks to fail and that small banks are not the solution. "We've raised $7.5 trillion [in financing] for customers. We cannot be replaced by small banks," he said. AmericanBanker.com (free registration) (2/28), San Antonio Express-News (2/28)

The Future of Money

Small firms embrace mobile payments to boost cash flow
Small businesses are benefiting from new technologies that allow customers to pay via smartphone. These payments provide businesses with immediate working capital that allows them to reimburse creditors without having to borrow. The Wall Street Journal (2/27)

Career Development

Leading your company through positive change
Positioning a good business to be even better requires going beyond setting up the right structure, Robert S. Olszewski says. He advises companies to evaluate how they can cut waste in seven key areas, identify their sustainable competitive advantage and disrupt routines. "Companies that can clearly demonstrate why and how the change will have a positive impact, leading to dissatisfaction, have a higher probability of effective change," he says. Smart Business/Philadelphia (2/2013)

CBA Connect

CBA LIVE 2013: The Future of Money

Are you ready for the Future of Money? CBA LIVE 2013, March 11-13 in Phoenix, Ariz., will bring together the top executives in retail banking to learn, exchange ideas and identify solutions to the challenges facing our industry. Our 2012 event was a record-breaking success with more than 1,000 banking leaders in attendance! Now in its fourth year, CBA LIVE features expert panels and distinguished speakers across nine forums of tailored programming. Reserve your space today and join us for this must-attend event.

Learn more about CBA ->

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