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Regulation Reimagined: Banking Beyond Partisanship · Leaders in Lending

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You're listening to Leaders in Lending from Upstart, a podcast dedicated to helping consumer
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lenders grow their programs and improve their product offerings. Each week, here decision
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makers in the finance industry offer insights into the future of the lending industry,
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best practices around digital transformation, and more. Let's get into the show.
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Hi, you're here with Lynn and Matt from Upstart, and we're happy to
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have Kelvin from the CBI on the podcast today with Leaders of Lending. Kelvin,
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would you want to introduce yourself to our listeners? Sure, thanks so
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much, Lynn, and listeners that are on video, just be warned.
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I thought that this was a podcast, not a video podcast, which is
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why I'm dressed the way that I am so. I recently joined the Consumer
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Bankers Association about five months ago to help coordinate the policy work that we do.
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And so you know, we have a new CEO, Lindsay Johnson,
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that y'all interviewed last February. And you know, one of the things that
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among the changes that Lindsay made, which I was super excited about, was
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she took our regulatory team, our lobbyists, our communications function, and a
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new data function and put them into one squad with a kind of recognition that
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advocacy these days has to go across those different travels. And prior to this,
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I was at Barclays in the US Consumer Bank, where I was in
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the ex CO, I was briefly very leading the regulations policy function. I
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was at Capital One where I led the bank regulatory and policy team for several
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years, and then I had roles at the Federal Reserve Board, the CFPB,
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and the Federal Trade Commission, and then I was allitigator in New York
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for several years. Oh wow, so you've had quite a great experience.
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You're being like industry regulators, government litigation. So a little bit about rething
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my eleven year old. It's very worried that I can't keep a job,
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and I keep telling them that these are like progressives, but it's like this
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is like the new economy. But he's very old school. Yeah, always
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interested in banking. Or how did you get into the CBA, the aggressively
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mortar banking? So basically everything after CFPB was banking. Yeah, CFPV very
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topical. We had director of Choprah, we did and we did. What
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were your thoughts on his speech? His remarks. Uh, and maybe tie
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that back to your experience at the CFPV. Sure, I have to start
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by saying I love the CFPB. Right, So I was part of the
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kind of first generation of CFPB ers as was right. Oh see you were
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there when Quadra we're both from Ohio, part of Yeah, I actually before
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upstart met through politics. Oh why gosh, yeah, yeah, but that's
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right. So like I did, I did my my time at the Bureau
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under Rich Quadray, and you know, I am and continue to be a
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true believer of the CPB. I did moral minors at the CPB than I
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did in several years. And I have a practice in New York. But
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you know, uh, Lindsay recently testified to me hearing on the Hill where
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the focus was the politization of financial services regulation. And so as part of
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the wind up for that, you know, we sat down with a reporter
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and they said, well, gosh, like, isn't all regulation politicized?
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What is it? What does this mean? Right? How things changed?
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And it was a it was a good moment to kind of stop and say,
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oh, how have things changed? And you know what I would say
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is that back in my day under Director Cordre, you would focus on facts.
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You had a bunch of resoarch economists, you had market analysts, and
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the facts were the facts, and you'd set out kind of a good understanding
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of the market, and then you'd lay out a menu of policy options,
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and then the director would choose from those policy options, and politics would have
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to play because you'd have to figure out like what would work and what wouldn't
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work. Then you write a headline and you go to market. While from
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the outside in and understanding that I'm on the outside now, it feels like
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the agency is starting with the headline and then working backwards. Right, So
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you have an administration that is fixated on junk fees and they recognize that among
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the electoral messaging, junk fees are one of the few things that sticks.
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So then that message goes down to the team saying, okay, give me
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some policies that you can sell politically, and so picking on big banks is
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something that politically sells. Then you back up into that and say, okay,
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then what will be the policy interventions? And then perhaps the most concerningly,
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then you choose your facts, and so you know, one of the
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things that I can go on for like thirty minutes about this. But that
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we've been kind of really in just very concerned about are just the facts that
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are coming out of the BUREAUM. So the director today talked about competition in
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the credit card market, and there's this notion that the credit card market is
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not competitive, and this is pervasive, right, This is why they justify
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their late fees rulemaking, this is why people talk about credit card interchange.
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And the thing I would note is that one there four thousand issuers in the
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credit card mark. You guys know this better that you're your listeners know this
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better than anyone else, you know. The director talked about concentration of the
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twelve largest issuers, like I can't imagine any industry that has twelve of anything,
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right, like twelve leading airlines, twelve leading computer manufacturers, twelve leading
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cell phone manufacturers. But there are also like fifty billion dollars in billion transfers
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all using CFPP datum. And then I'll just a little bit more on this,
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then I'll stop, just because I get really fired up about credit cards,
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you know. The director also talked about how consumers are apparently firing more
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poorly credit cards when they talk about like super high interest rates. But in
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the speech today he repeated something that they'd said in their data before, where
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they said that the amount of subprime card holders has remainconsistent, and that's simply
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not true. Like, if you look at the cpeb Z owned Card Act
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data, the number of subprime card holders has gone up from like sixty two.
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Sorry, the percentage of people that are the subprime space that have credit
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cards has increased about basically ten percent from twenty fifteen to twenty twenty twenty two.
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But then to the deep subprime space, we've seen massive inroads in underwriting
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to deep subprime consumers while keeping them paying their bills at good rates. So
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like that's financial inclusion working well. Actually you're seeing more more borrowers of the
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subprime space, not people kind of falling down to subprime, but actually like
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a growth of barrowers coming up to receiving credit, you know, and that's
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who may not have before. That's right, And that's the last part of
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my rant. And indeed, it's like I'll stop at this, but you
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know, there's this notion that you know, because you're bringing in and record
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numbers of deep SOB prime consumers but they're doing better than they ever have been
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before. So the Bureau also has charts where you're looking at basically the number
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of people that transact. Those numbers are all times highs. And then you're
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looking at the balance is that the progress people are paying into their balances.
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And when the Card Act was first on in twenty fifteen, people are basically
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paying off like twenty eight percent of their loans each month, and we celebrated
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that. Under Director quadrat Well, they're paying thirty nine percent of their loans
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off each month. Right, And so again, like you can that's that
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whole kind of Daniel Patrick mornand thing where you can have your own opinion but
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you can't have your own facts. And that's where we're at right now.
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So I'll stop there. Thank you for letting me get that off my chest.
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So I like that. It seems like part of maybe your critique is
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that it wasn't a balanced view, right, So really focus on fees,
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deep on that versus understanding the whole consumer landscape and how each consumer is using
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the product and the need of the product and how we're better serving It's part
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of that, right, But it's also even if you're going to focus on
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fees, stick to object effects. Sure about the fees and how consumers are
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very One of the interesting things that that was part of the comments today was
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that the difference between a rewards versus non rewards credit card. And I don't
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know if you heard that, but it was kind of a you know,
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a nuanced that could be interpreted as consumers aren't aren't smart enough to choose whether
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they want their rewards versus versus maybe having a card with less cost but no
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rewards. So that was I think an interesting distinction to make was even not
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just the fees in general, but the very specific types of cards that are
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offered to do so, where do you see innovation coming from? Like it
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seemed like part of his message too, was like the government is necessary to
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drive innovation by creating some more parity or transparency. How do you feel about
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that? I struggle with that as well. I mean, I think the
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main thing I would look to just from the innovation space, and maybe it's
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just because it's less flashy and people don't talk about it as much. If
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you think about all the innovations that have taken place in underwriting folks, and
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so you see that like to double down on this notion, like the deep
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penetration into the deep subprime space while ensuring that they're paying off their balances like
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at better and better rates. Like that requires a lot of like alchemy and
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data science and risk splitting, and it's I think it's kind of remarkable,
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and that's why I really bulk when we have policymakers that are kind of then
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bringing a chainsaw to something that is so delicately created. Yeah, I think
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and that you know, I know, you have been both kind of private
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and public sector, and so it kind of leads into into Map's question then,
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like you know, how is being on really both sides of that really
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kind of shape your perspective on kind of regulatory affairs and policy development. Yeah,
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I think that. You know, the interesting thing about financial services,
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so they're kind of two things that drive my personal career. One is even
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going as basic as like having grown up a minority in the Deep South,
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like I have a deep respect for what policy can do to making sure that
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people are treated fairly, particularly federal policy, So I think that's enormously important,
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particularly so in financial services. On the other hand, you know,
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when I was at the Bureau after we got through that first space of big
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rigs, you know, I started to see kind of the Bureau kind of
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moved to arguably kind of less impactful things. At the same time we saw
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the smartphone changing the world. Right, So I imagine like so many of
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the guests that you've had on the show, like head platforms that were built
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on or enabled by that one device. And so you know, I remember
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sitting at the Bureau thinking, oh, I'll work like another two years and
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another rule that might like move the needle a little bit, whereas like these
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people in California are making the pie larger for everyone. They're changing lives,
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and so just a real recognition that you need the rules and you need to
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understand them in financial services, but that the only thing that makes the HIE
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larger for people and the only thing that really advances financial health to many products
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for it. Yeah, and so trying to mar the two has been kind
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of where I try to take my career since then. Well, and maybe
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describe a little bit for those who aren't familiar with the CBA and the different
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committees, like what what is your role as had a policy? Like what
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does what does that entail? And the day to day to week to week
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base with sure. So the Consumer Bankers Association is a banking trade group.
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We focus primarily out of retail banks and increasingly on banks that are ten billion
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dollars or more so banks is that are just above like the Durban threshold all
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the way up to the very largest banks. We have, as map points
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out, a wide range of committees in which basically bankers get together and just
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compare notes in an anti trust compliant way on how the world is changing,
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right, and so you know that the example I would use there is during
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the pandemic, like a lot of people are trying to figure out like is
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it safe to like reopen branches, but then how do we serve our customers
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and you know, how do you handle cash? And so we created a
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new committee that still stands now that helps people compare notes on that and just
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ensure that there's best practices there on the other side of the house. And
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that's regulatory change, and so you know, the goal there is to understand
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what regulations are coming down the pipeline and how they'll impact the banking industry and
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most importantly banks and ability to serve their consumers. And so we run data,
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we talk to the hill, we work with the regulators, and ultimately
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like try to even talk to consumers so that we can help people understand how
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that regulatory change will path through lives and in some cases maybe impact the regulatory
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changes. I definitely think like your background, certainly in kind of consumer protection
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payments. I think payment space vans are about credit cards a little bit,
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but just payments in general, not being able to maybe go into branches for
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people who don't have internet access at home during the pandemic. I think what
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are you seeing is kind of the evolution of the payments landscape there. I
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think there's a proliferation of payments providers, and some of it's pretty concentrated still
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in some of the big banks. But like, what are some of those
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key considerations you think about, like policies, it relates to payments that would
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be good for the industry but also help innovation continue. It's a great question,
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Lynn, You know, when I think about payments, I think of
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it as like one example of why silos are so dangerous in regulation in payments
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right now. In many ways we're kind of typified by fraud, right,
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and so that's one of the things that we're all focused on the making industr
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orty is just and you hear stories. I mean, it's it's not uncommon
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to just hear whispers of institutions saying that credit losses are now like rivaling fraud
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losses because proud losses are so high. The thing I would note there is
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that you know, we have from like an advocacy and really a communications issue
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in the space, because when people think about broad in this space, there
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a lot of concerns are like a lot of people are looking backs to fix
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things, and a lot of people are thinking about even reopening long standing regulations
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and that have governed the payment space since quite literally since I was born,
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because I guess Rege and the electronic funds transfer active done in seventy eight.
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The concern there is that there's this line in New jack City, right,
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this is bigger than you know Brown, right, And I think a lot
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of people don't really don't seem to appreciate, particularly for people that are folks
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in the banking sector, that a lot of the problems in this space exist
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outside the banking space. And so there are things that will involve the telecommunications
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companies, they'll involve the social media companies, they'll involve other government actors and
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so well, we're going to have to really work hard in the near future
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the de silo all that be able to start addressing these issues. So are
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you able to participate with those groups outside of the CBA or bringing some of
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those in or house collaboration go on with some of those. We're working on
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it. But I think that the thing that's interesting about REGs it's kind of
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different a business, is that in the government there's literally like a reg E
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part eight person at the bureau and like a Reggae Part B person of the
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bureau, and you coexist by like not not getting each other a stamp base,
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right, And you know, and the thing about fraud is kind of
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typified by its ability to arc over Like who would have thought, yeah,
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that like telephone companies would be the gateway for security for financial services, right,
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And so you know, trying to encourage people that to be more open
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minded and kind of learn across disciplines is we're all gonna have to learn that
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together. Yeah, I think we've certainly seen that. I know some of
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our attorneys and people in the government affairs space have been at industry events where
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a lot of the payments processors now are are companies like Meta or or really
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what you think of the social media companies not not specifically a payments processor.
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And I think some of the some of the friction put in even by some
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of the banks to protect consumers can then make it hard to transact. So
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finding that balance is certainly hard. Do do does this see being involved in
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anything related to digital assets or anything crypto or is there something kind of outside
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of your space today? It's we care about it to the extent that it
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intersects retail banking, which right now, you know, most of the crypto
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conversation is more of nastic class or you know, kind of the background rails.
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I will say, like when I I'm a member of there's a group
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called the Digital Dollar Project that does some really interesting work thinking about a central
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bank issue digital currency. And you know, one of the questions I often
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raise in those conversations is, you know, what is the need that they're
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addressing and the thing that kind of take it back to the advocacy discussion.
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People will often point to financial inclusion, the point to ubiquitous and faster payments,
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and you know, I'm stuck thinking, well, gosh, like we
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have a banking system that like we've got record levels of people being baked,
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we have record levels of subprime card penetration, and said, we're doing historically
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well. And I'm you know, taking my kid on travel overseas and like
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I'm not taking cash because like I can take this thing intab it anywhere in
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the world and I get points back, all right, and like like we're
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not talking about that, all right. And so one of the things we're
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realizing as a banking industry is we have to tell our own narrative matter because
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if we don't, like people are painting a picture of us, if we're
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not paying that picture for them. So what are some ways that you're able
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to do that being more proactive about that's a great question. Some of it
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is like, as you can tell, I get like really excited talking about
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this stuff. Some of this is really taking the facts in and educating folks.
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So if you think about it's kind of before we start up with the
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credit card space, like we have a deck where we are going through and
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say, Okay, here's all the things that our regulators have said that's that
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their own data is incorrect. About que cards, and we are taking that
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to reporters, We're taking that to modern democrats on the hill and just educating
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people and just kind of sitting them down and kind of nerding out with them
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and showing the charts. The other thing I would note, you know,
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I used to say this when I was in government, is that the average
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American has to hear a song seven times where they like it right. And
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depending on what you think of government, regulators are either better or less than
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average. And so it takes time. But we're doing that work, trying
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to pay into building those relationships and trying to earn that trust with folks being
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received well or I think so, I mean, I think the thing is
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and this is the beauty of facts. And this is why I really worry
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a lot about just about the future of the CFPB. Like the data is
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the data, right, and so if you go in there and you're earnest
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with books, I mean, we go in there with some of the most
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hardcore like super progressive offices, but like the old heads that like help write
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the Card Act, if you sit down with them and you show them the
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data, like they're the ones that are most willing to engage because they kind
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of see the patterns, they see the numbers. Do you see most of
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that happening at the federal level or we're seeing even some activity at the state
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level in terms of great exportation or trying to bring control of the banking industry.
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It's it's tricky in the states, goodness. I mean, we don't
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do a lot of work at CBA in the state space, but I will
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note like like increasingly everything from state legislation that would impact state tax and interchange
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to things like fair access requirements. It's just a very tricky space to navigate,
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you know. I think we've we've certainly heard that from from banks as
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they kind of crushed that gurban threshold and then have to pay the interchange fees
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where before they were exampt from them is a is a pain point. It
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sounds like the CBA many of the bank members are above that. So there
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you know, any any thoughts about those those kind of banks that are kind
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of right at the edge like where they you know, it's kind of a
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little bit above in assets and being subject to those is pretty painful versus like
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do you keep your assets a little bit low and need to do an acquisition
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to grow or how are the members thinking about that, about navigating that transition
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between those two two and aligns on the interchange space. That's a great question.
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I can't speak to necessarily how the members are thinking about it, but
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what I would say is that that is a great example of how regulations can
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lead to kind of unnatural, like like business practices. I had dinner last
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night with a group of CEF and B alumni, including a fellow that was
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in the most recent team, and we lovingly got into almost like a real
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Housewives like table flipping argument because there's just a regulation on open banking, right,
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and they have this regulation that we kind of dream up this entirely new
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world that would have like they literally have two new definitions of consumer, one
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of which doesn't include natural consumers. Right, So it's like a very complex
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rule set that in many cases like they have weirdly specific definitions and then other
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cases weirdly vague spaces. And I use the Durban example that you just raised
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trusted look like when the Fed and Durbin did that ten years ago, I
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think no one anticipated that you would have bang intentional was staying below the number,
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Like no one anticipated the rise of these neo bakes, right, Like
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who wouldn't want to grow? Right? And like I think no one really
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thought about the impact like that has now been demonstrated of free checking and so
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then when you come in and like you kind of pan outside the lines of
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your statute and create all these new rules, just having a little humility to
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think about gosh, like what are the unintended impacts? Like what are the
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weird places we might to be pushing the market. It's just something that I
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think regulators have to keep in mind. Yeah, it you know, we
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push ourselves to like test and iterate so fast. Like do you see that
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happening in the government again, like recognizing where a law maybe was good for
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a time but needs to be adapted. Is it is there a faster rate
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of change do you think happening? I wish and you know, and this
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is where I really want to have some empathy to regulators, you know,
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with the increased like politization and polarization that we're saying, and to some degree
19:51
industry we did a little bit of ourselves. So there was a big lawsuit
19:53
called Celia Law where we said, hey, ceefp of this five year term
19:56
you should really be appointed by the executive and removable by the executive. But
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then like we then can't really complain then when then like the CPP is like
20:04
more aligned with the executive and importantly is on a four year term. And
20:07
so you know, I've done it where you know that you know that the
20:11
administration flips, you have four years, you know, and then it's just
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a race to get the regulations done because you're worried, like my rule actually
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got undone by a new Congress because we didn't get out of the gate fast
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enough. And so you know, they're just kind of breaking off the mirrors
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and all the regulatory Of course they can to get to the end, but
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it doesn't lead to great results too. And we've depitate been I think it
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is kind of peering and seeing some of that. But the regulators, knowing
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this as an election year, what does make the regulation sticky? Then,
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like how do you differentiate between you know, kind of things that are put
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in place between now and maybe a change of administration and what can stick or
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it's really everything up for rescinding it that if the leadership changes. Gosh,
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that's a great question. You know that you can teach a whole lot of
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I've even tried to draw out like a lawsul law school syllabus. I'm like,
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if you had a class, I'm like, how do you make a
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persistent regulatory change? I mean, I think the biggest thing, ideally would
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be to to start with consumer need right, start with the data like where
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the market actually drives you, and then try to lead to a space where
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people can serve their customers in a productive manner. I think once you go
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beyond that to kind of broader designs around the economy and kind of forcing it
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into natural spaces, your regulations necessarily get more brittle. Is that a consideration
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as you're going through the is like hey, I want this to last wherever,
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or you're just thinking like here's the problem in front of me, let's
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solve it and move on to the next thing. Or when when you're writing
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rights around here on our side of it. Either, Yeah, I mean,
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ideally, when you're writing regulations, you're thinking about like how do you
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kind of get the market in a natural space in a better equilibrium. You
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know. The one thing under director Coadre that I mean many things that I
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thought that was really kind of smart is that he would often look at the
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industry and say, okay, is the industry getting to a better place on
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its own right? And then so where do I then need to nudge right
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or provide clarity to get it there? You know? I think it's when
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you kind of again depart from that that it starts to get a little dangerous.
22:08
Yeah. And I think with the maybe we had some folks from the
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Fair Responsible Banking Committee on the podcast as well, the chair and vice chair.
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And I think fairness of lending has been obviously a key topic. And
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I think particularly with AI. Any thoughts on the Executive Order of AI last
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year that came out and it was pretty broad and not necessarily industry specific,
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but I think, how did you message that within the CBA or any feedback
22:37
from the banks? Yeah, I mean I can do better than that.
22:38
I'll tell you how we messaged it when I was in the government. Like
22:41
so, when I was at the FED, I did a speech with Leel
22:44
Brayer, who was amazing, and we did a speech in twenty seventeen about
22:51
kind of where we saw artificial intelligence, where she saw artificial intelligence going in
22:56
financial services. And one of the things that then Governor bring Her said was
23:00
look, you don't always need to reinvent the wheel. You need to stop
23:03
and kind of look and see what toolskits you already have and then see what
23:06
needs to be again kind of the early point we made right like what are
23:07
the incremental fixes you need to make? And in banking, as it turns
23:11
out, there are a lot of regulations and guidances that apply to the use
23:15
of artificial intelligence. There's model risk management, there's for a lending, there's
23:18
guidance on third part of risk management. There's guidance on adopt bringing in new
23:22
technologies and products, and so there's a lot of great talking collaboration needs to
23:29
happen there, but there's a lot of good tools to start with that you
23:30
don't need to reinvent. We see the CFPP increasingly leaning in on the use
23:36
of AI in financial services, so they're calling for whistleblowers data thing today where
23:41
they're calling from our technologists. The concern that I have is that the CFPV,
23:45
among other things, was created to basically ensure that consumers get the same
23:48
protections whether they're with banks or non banks, but the Bureau, when they're
23:52
thinking about AI releasing, is focused on big banks, where in many ways,
23:55
like there's already like a good framework or tools, Like in the non
23:59
bank space, non banks have no understanding of model risk management because there's no
24:03
there's no regulator there, they aren't regularly examined for a co there's no TPRM
24:07
guidance, third party risk management guidance, there isn't this guidance on new products
24:10
and services, and so like I would like, there's so much good that
24:15
the bureau could do if they would just like take that framework and start talking
24:19
to non banks. It just doesn't seem to be that that's not putting their
24:22
chips there, which is a little concerting. Do you think they're just kind
24:26
of staying where maybe the I guess clientele is more comfortable that they're not ready
24:30
to because I know the CFPB has made some statements and that you know,
24:34
if there is a possibility of consumer harm, then they feel like they do
24:38
have had a regulatory oversight over that, and they've gone after some non bank
24:42
lenders recently. Do you think that they're just not quite ready to jump that
24:48
farther, expecting an industry reaction or or what do you thinks holding them back
24:52
from doing that. The CFPP for all the reasons they discussed before is very
24:56
politically savvy. I'll give you the cynical view, and I'll give you the
25:03
positive view. So the positive, the positive view is that consumers, a
25:04
lot a lot of consumers used to be banks. Said you beat up on
25:07
a couple of big banks, then you theoretically address a lot of consumers.
25:11
That more cynical view of that would be. I used to tell this story
25:15
when I was at Barklays where there are two pieces of bipartisan legislation at the
25:19
time that Tim Scott and Shared Brown were we're sponsoring. One was stopping fencible
25:25
and then the other was taking executive conversation away from big banks. Right.
25:27
So like that, I would say, welcome Bakers, like the one area
25:30
where there's bipartisan support, is you infencible and not something you've would have been
25:36
along, right? And so I think the bureaus like smartly realized and you
25:40
see this in their messaging right kind of when they started out by saying,
25:42
hey, we're after big banks, not relationship banks, right, And you
25:45
see these carbouts with overdraft, we see these carbouts with late fees, like
25:48
they thoughtfully kind of triangulated that if we beat up on this sector, that
25:53
we're going to basically get a free pass on both sides. And so that's
25:56
something that again like if that's the best politics. But I mean, I
26:00
think I said it's perfectause like i'd write, it's my job to gribe like
26:03
heard who cares about what spirit of banks? Right? It's not good for
26:07
consumers, like because because every consumer, like you could, you know,
26:11
Plaid has an update where they say, hey, like more people are using
26:14
fintech than are using screening services, right, Like, we need the bureau
26:17
there, like that's why the bureau exists, and so you know, I'm
26:21
hoping that the bureau gets there. I was reading an interesting article earlier this
26:26
week. I think I shared internally in our slack channels that many people who
26:30
work for FinTechs have not the majority of people who work for FinTechs actually use
26:33
a traditional bank for their banking services though, and have not poured it over
26:37
their kind of day to day banking. So I do think that like,
26:41
FinTechs have made inroads in a lot of a lot of places, but many
26:45
consumers are still working with the major banks or the regional banks on their their
26:49
standard banking. So what are some of the current I mean other than you
26:53
know, the things we've talked about credit cards, interchange fees, certainly a
26:57
lot of a lot of complexity in headwinds. Anything else that are you see
27:02
is like current pressing, trends, challenges, things you're hearing from the membership
27:07
that they're worried about that you know what's next on the horizon. Yeah,
27:11
I mean, I think the thing that I would note is that you know,
27:15
we're seeing such a caste of regulatory change in an uncoordinated manner, Like
27:21
in my limited government to a career, I've never seen so much change happening
27:25
from so many different places in a non talk together way, right, Like
27:27
at Dodd Frank at least there's like one piece of paper that it was all
27:30
on, like one PDF that you download. In this case, like if
27:33
you take them, if you think about like the banker that we've got that's
27:37
trying to make sure that he or she can provide low cost checking account services
27:41
to consumers. Right, so this is like a mitzvah, right, Like
27:44
you're just like low cost checking accounts for people. That's like a platform that
27:48
consumers can build their lives on. They've got a P and L that you're
27:52
trying to manage down to like the penny. You've got the CFPV coming at
27:56
you with overdraft regulation that could limit it to anywhere from three to fourteen dollars
28:00
or something of this kind of CPB said price. At the same time,
28:03
you have the Federal Reserve coming in cutting debit interchange rates by a third.
28:07
You've got possil rules that would require you to hold capital against this CFB overdraft
28:15
credit. And then you've got the CPB requiring you to create APIs for third
28:18
parties that you're supposed to pay for for free forever. And then this ten
28:22
thirty four C thing, we're supposed to give away any records to consumers for
28:25
free whatever they may ask for. That's kind of this unbounded manner. I
28:27
just I don't see how that's sustainable, right, And I don't think And
28:32
the worst part about it is, I don't think the regulators should like really
28:34
feel the need to even say, oh, like what are you doing?
28:37
Like what are you doing? Like let's think about like like get it all
28:40
on one page and then think about like what's happening to the consumer. Do
28:42
you think that'll lead to lawer consolidation, more merger and acquosition activity. I
28:47
mean, if that if the cost of operating get more expensive and you really
28:49
need that size and scale, it feels like things would I know that the
28:55
CBA is primarily that you know, ten billion out of buff banks, but
28:57
feels like the opportunity for community banks and even smaller banks for ones on that
29:03
threshold and gets even harder. So so, and this is where I can
29:10
only see problems. I can't see answers right now. We have this weird
29:15
squeeze really, I think on the regional banks, because you've got on the
29:18
top end of the you've got prudential regulations that are coming down, right,
29:22
so you've got these like long term debt requirements and such that are trying of
29:25
trickling down to these resolution planning requirements that are coming down to the regional bank
29:29
level. At the same time, you've got these this kind of massive and
29:33
well and ultimately like basically potential regulations saying hey, make less money on lending,
29:38
make more money on fees, and then you have consumer regulators coming in
29:44
and saying, oh, you can't, you can't even make a revenue on
29:45
fees. Like that's a whole thing. That's like a whole other podcast where
29:48
it's like there you've got regulators saying that you can only recoup your costs on
29:51
fees, but then they're carving out the smalls, right, and so like
29:55
for overdraft, for late fees, for REGII, smalls are carved at.
30:00
So for those reagonal banks in the middle, right, you can neither lend
30:03
nor generate fee income. I don't know what happens to them, And like
30:07
like what if it's you know, increasing when you're starting to hear even in
30:11
public earning earnings polls, executives kind of questioning like like do regulators recognize how
30:15
hard it will be for them to stay in the consumer retail space? And
30:18
at the same time you have the CPV coming out saying we don't want you
30:22
to emerge. So I, well, I don't know what's going to happen
30:26
there, but it's it's another good example of work. We can like please
30:27
sit everyone around a table, like put it all on one piece of paper.
30:30
Maybe that's a start. Any Uh, speaking of murders, any any
30:33
hot takes on whether or not the capital one and discover murders that to be
30:37
approved takes it takes it home. Yeah, we've learned there's some topics that
30:47
people won't cover with a microphone. Here. We won't put you on the
30:49
spot on predicting or endorsing a candidate either, but anything you see happening in
30:53
the next four years, like or you just kind of wait and see.
30:57
Oh gosh, is it that by are like you're saying that the polarization,
31:00
like it's really that hard to tell where you know where legislation may go or
31:06
reaction to I mean, the thing I would note is that this is unsustainable,
31:11
right, Like this notion of like a new administration coming in and then
31:15
you spend all your time kind of throwing out some things that happened in the
31:18
last administration. It's it's not good for the industry, but most importantly,
31:23
it's just terrible for consumers. And so I don't know what the answers are
31:26
going to be, but we've got to find some way to kind of come
31:29
to more middle ground on these issues and to kind of normalize this and get
31:32
back to the facts. That's better. Whole thing that's matter. I've been
31:36
put that on your shirt. Yeah, yeah, thank you very much.
31:40
Calvin Briefinding exploring conversation. I didn't realize how much like this is very cathartic.
31:45
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