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Congressional GOP: pursuing vote to overturn arbitration rule

Last week, the Consumer Financial Protection Bureau issued its Final Rule that, in essence, prohibits banks and other lenders from using mandatory arbitration clauses in their lending and other documents.  

“That's the bad news,” OBA President and CEO Roger Beverage said.  “The good news is that congressional Republicans are poised to use the Congressional Review Act to overturn the rule.”  

Beverage noted the CFPB's own study found arbitration has significant benefits over litigation in general and class actions in particular.  

“IBC Bank's Bill Schonacher recently sent us some information that details the reality of how arbitration works,” Beverage said.  “Bill is on our GRC and points out that the process is 'A convenient, efficient and fair method of resolving disputes at a fraction of the cost of expensive litigation, which helps keep costs down for all consumers.'

“Here are some amazing statistics that (Bill) forwarded to me. He also sent this information to Sen. Lankford and Sen. Inhofe and asked them support an effort to overturn this final rule using the (Congressional Review Act)."

ARBITRATION                                                                                    CLASS ACTION

Quicker Resolution — Average Timeframe 2-7 months               Lengthy — Average: 690 days (1.89 years)

Document only: 4 months                                                                   District court: 758 days (2.07 years)
   Telephone: 5 months                                                                           Days in court: 407 days (1.11 years)
       In-person: 7 months

Lower Costs to Consumers — Fee cap: $200. Aside                  Higher Costs to Consumers — Consumers
this nominal fee, companies often cover the entire                        cover court attorney costs through contingency
cost of arbitration.                                                                      fees at an average of 21% (and as high as 63%
                                                                                                of consumers' relief.

Higher Recovery — Average of $5,389                                           Minimal Recovery — Average of $32.

"The CFPB's own study points out consumers do better under arbitration than becoming involved in class action law suits," Beverage said. "It's the lawyers who win big in class action suits. That's just reality, and it's the wrong decision at the wrong time that was finalized in the wrong way.”

Meanwhile, on Friday, state bankers associations from all 50 states and Puerto Rico wrote to Senate leadership urging lawmakers to use their Congressional Review Act authority to stop the CFPB arbitration rule from taking effect. Under the CRA, Congress has the ability to reject new federal regulations within 60 legislative days of publication in the Federal Register.

“We collectively pointed out that the rule 'would create a windfall for unscrupulous class-action attorneys, provide little or no relief to harmed consumers, and effectively eliminate an accessible alternative to the often-daunting judicial system," Beverage said. “We think we have a real shot at this request in spite of Democrat opposition.”

Click here to read our letter.

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Quarles nominated as Fed vice chairman for bank supervision

Last week on Monday, the White House announced President Trump will nominate Randal Quarles to serve as vice chairman of the Federal Reserve for financial institution supervision. The position was created by the Dodd-Frank Act but has never been filled.

Quarles has a private equity background, but has also served as undersecretary of the treasury for domestic finance during the George W. Bush administration and as assistant treasury secretary for international affairs. He served as deputy assistant treasury secretary for financial institutions policy in the George H. W. Bush administration.

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ABA urges bankers: Write to senators to keep momentum on reg reform

In case your bank is not a member of the American Bankers Association, we are working with them in an effort to make sure bankers' collective call for regulatory reform are heard.  

“I think our two senators agree with us on this issue,” OBA Chairman Guy Sims said. “The question that everyone keeps asking is 'what will that look like?' The answer to that question is not certain at this point, but it's pretty clear that time is wasting insofar as actually getting something done is concerned.

“Nonetheless, it will be helpful to add your voice to that of bankers all across the country as we try to get the Senate to focus on meaningful regulatory relief. ABA has made it easy and (below) is all you have to do."

  1. Click here
  2. Check out the scripted message that will go automatically once you have filled in the blanks and identified yourself.
  3. Make changes if you desire to 'customize' the message.
  4. Hit send.  

“I hope you will take 60 seconds and join the rest of us who have sent our email messages,” Sims said. “I hate to risk 'overdoing' it, but I don't want to assume anything or just take it for granted that Sens. Inhofe and Lankford are 'in the bag,' so to speak.  Please take the time to click, fill in the blanks, edit the 'message' and send it along.  We really need your voice added to this effort.”

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ABA, CFPB to host free webinar on HMDA submission tool

ABA's Center for Regulatory Compliance and the CFPB will offer a free webinar on the new Home Mortgage Disclosure Act submission tool at 2 p.m. on Aug. 8, 2017. The program will provide an overview of the new tool and the data collection process all financial institutions will use to submit HMDA data beginning Jan. 1, 2018, for data collected in 2017 and after.

CFPB experts will demonstrate the new HMDA platform and discuss other tools designed to help with filing. During the program, participants will see the new web application for uploading data files, learn how they will receive feedback on file format, syntax and validity edits and learn how they can approve the conditions in quality and macro edits. This webcast is designed for compliance, operations and loan processing professionals.

Click here to register.

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Bankers' Night Out events scheduled for autumn

To help with our bankers' future planning, we've already been able to set the dates and locations for the upcoming Bankers' Night Out events for the fall season.

There are six stops scheduled, including a new addition to our regular list of locations: Stillwater.

  • Sept. 19 — Lawton
  • Sept. 21 — Woodward
  • Sept. 26 — Tulsa
  • Sept. 27 — Oklahoma City
  • Oct. 10 — Krebs
  • Oct. 12 — Stillwater

Each event is $40 person and pre-registration is required. Click here to download a registration form.

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OBA education corner ...

Summer is officially here for the OBA education department, and while that means things might slow down a bit, it sure doesn't mean they stop! Take a peek at the upcoming events:

  • Regulation by Enforcement, Aug. 2, webinar — This program reviews many of the recent consent orders dealing with compliance-related matters.
  • Phishing Trip, Aug. 3, webinar — This discussion will review strong risk management processes and identify critical elements for building layered information security controls into your security program.
  • Residential Construction Lending, Aug. 3, webinar — Many problems can occur during construction that can leave lenders highly exposed unless they are unwritten properly.
  • Introduction to ACH (part one of three-part series that can be attended individually), Aug. 4, webinar — The ACH Basics and Overview is designed as an introduction to ACH processing. You will gain a broad understanding of the Automated Clearing House Network and the processes the network follows.
  • Internal Audit Seminar, Aug. 16, Oklahoma City — This seminar will emphasize the importance of a strong risk assessment in any bank and the role this risk assessment, along with a sound and effective audit plan can have in helping a bank avoid fraud.