NEW YORK — A slew of banking issues are on the agenda in Washington right now, from proposals to roll back some of the regulations implemented after the financial collapse a decade ago to questions over the structure of the Consumer Financial Protection Bureau. Wells Fargo is still in the headlines, feeling more repercussions from its scandal over fake accounts. Banks are also facing pressure from Silicon Valley, which has looked to scoop up business in things like payments and student loans.
Richard Hunt is president and CEO of the Consumer Bankers Association, the nation’s trade organization for the big retail banks like JPMorgan Chase, US Bank, Wells Fargo and the like. Hunt sat down with The Associated Press this spring after the CBA’s annual conference to discuss politics, competition and Wells Fargo. This interview has been edited for length and clarity.
Q: During your conference, you said the consumer banking industry was getting back “a little bit” of its swagger in Washington. What do you mean by that?
A: Well, what I mean by that is we have an opportunity to reform industry regulation. We’re not calling for less regulation; we’re just looking for balance and better regulation. And we believe the Trump administration, coupled with what we believe will be an improving economy, gives bankers some optimism that they can get back to the business of banking, of true banking.
Q: Do you think the main federal regulators will be willing to cooperate?
A: We’re going to have several new heads of agencies between now and the end of the year — Office of the Comptroller of the Currency, FDIC chair, etc. I hope that’s true, I’ve not heard that yet. There’s just no reason why we cannot have consumer protection and banking coexist. We are not enemies of each other. I get a little tired of hearing about how we’re trying to eliminate the CFPB and roll back regulation. It can’t be further from the truth.
Q: How is the industry reacting to the Wells Fargo sales practices scandal?
A: Any time you have a major current event in the industry, it’s going to impact us all. It’s an issue that jumped to the forefront from not even being a consideration at all. That calls for industry reflection. But I feel very confident it is not an industry systemic problem.
The regulators are doing their work to examine the banks right now. They understand that the American trust in confidence in these banks is at stake. If they’re going to accuse a bank of having an issue, then they better be darn sure about it.
Q: Fintech companies like SoFi, Prosper, Betterment have popped up all over the place in the last few years, offering products that banks traditionally offered. Do you see them as a partner or a competitor?
A: I’m glad they’re out there and I am pretty confident that it will end up being a partnership between the fintechs and banks.
I will say, four years ago, I thought there was a great opportunity for fintechs to totally disrupt the banking industry. But I now believe the banks, especially the larger banks, now have the wherewithal to compete and create their own technology to compete. Maybe some banks will acquire these companies as well.