Independent Banker - October 2017 - 51

and his or her immediate family
divest themselves of all bank stock
holdings. Many community banks are
privately held and have been in the
family for generations, so divesting is
not an option.
As Thomas explains, the Fed's
community banker's seat might make
sense for someone who is leaving or
near the end of their banking career
or someone for whom bank stock
doesn't represent a significant portion
of the net worth of themselves
or their family. The law also allows
someone who has community bank
supervisory experience to qualify for
the seat. Thus, a regulator, such as a
current or former state banking commissioner,
would qualify.
CFPB leadership
Perhaps the most contentious contender
in this list is the Consumer
Financial Protection Bureau, created
under Dodd-Frank. Richard Cordray,
appointed by President Barack
Obama, is scheduled to remain in
office until July 2018. The only way
Perhaps the most
contentious contender
in this list is the
Consumer Financial
Protection Bureau,
created under DoddFrank.
Richard Cordray
is scheduled to remain
in office until July 2018.
he can be let go before that is " for
cause. " (There has been speculation
that he's considering a run for governor
in Ohio, and if so, he would likely
need to resign before the end of this
year. So far, Cordray has dodged questions
about this.)
The CFPB is working on rules that
are nowhere close to becoming final,
including debt collection rules that
would apply to community banks
and also section 1071 of Dodd-Frank,
which mandates the collection of data
on small-business lending. ICBA is
working hard to repeal that authority
for the CFPB, but it's not likely that
anything will become final before a
new CFPB director is in place.
While some would like to cut the
agency's funding or even vaporize
it, it is unlikely that the CFPB will
go away any time soon. Regarding
its governance, Thomas says
ICBA supports the CFPB being a
commission rather than a single
director and making it subject to the
appropriations process.
ICBA also supports raising the
asset size at which a bank becomes
subject to supervision by the CFPB to
at least $50 billion from the current
$10 billion. As Thomas explains,
this doesn't mean that a bank is not
subject to the rules CFPB writes.
Instead, it's a question of who
examines it for compliance and who
has supervisory jurisdiction over
it. As of now, banks with less than
$10 billion in assets are examined
and supervised for consumer
protection rules by the prudential
bank regulators. The CFPB itself only
examines banks with more than $10
billion in assets.
On the qualified mortgage rule,
the CFPB could raise the asset size
for what constitutes a small creditor
under the qualified mortgage (QM)
rule and liberalize the exception
in that rule. It could also make
permanent the temporary patch
that considers any loans sold to
Fannie Mae or Fanny Mac to be
qualified mortgages.
A number of reforms would require
legislation, and the challenge there
is getting enough Senate votes. But
community banks may see relief
sooner as new agency heads fall into
place, because some items, like capital
rules and the way certain assets are
treated, do not require legislation.
Kathryn Jackson Fallon is a business
and financial writer in New York.
independentbanker.org
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Independent Banker - October 2017

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