DS News - U.S. Bank

63 seen that. What comes through there, I think, is an open question, but I would expect enhanced fair lending scrutiny and enforcement across the regulatory front. I think you will see a lot more attention given to that in both the House and Senate Financial Committees. I think you're going to see an increased level of focus on rulemaking, whether that means rewriting some of the rules that were done under the Trump administration or just taking a fresh look at some of these existing rules on consumer matters. Another piece that you may see impact the mortgage space is what's going to happen with CRA reform. We saw the OCC go at it alone. We saw the Federal Reserve publish their Advanced Notice of Proposed Rulemaking. e FDIC has indicated that the timing isn't right for reform. So, what happens there? Do we see the regulators come together and have a singular, standalone mechanism where we're just going to have one new CRA rule? Or do we see three distinct and divergent methods across these different agencies? e big one is still the CFPB. I think we're going to see a ramp-up back towards what we saw under the Obama administration. Just look at consumer relief. It was just over $2 billion under President Trump, compared to $10 billion under President Obama. e focus was on different types of institutions. It wasn't as much on banks as on smaller companies and nonfinancial institutions. So, I think the signaling is that we're going to see a shift back in terms of the priorities of the CFPB. e best kind of compliance is proactive compliance. at's going to be determinative based on the size, complexity, and the risk profile of the institution. But I look at a few basic tenets, strong policies and procedures to have in place and widely communicated across the institution. A strong employee training program. Everybody is responsible for compliance, regardless of where they sit. We need to make sure that everybody is understanding and aware of their compliance requirements. en you need a specialized monitoring and testing function, identifying potential issues and making sure that we have the correct feedback loop to get in front of those issues and change processes and policies as necessary to make sure that they're not occurring again. DO YOU THINK YOU'LL SEE MORE STATE-LEVEL REGULATORY AGENCIES SIMILAR TO CALIFORNIA'S DEPARTMENT OF FINANCIAL PROTECTION INNOVATION? at's a great question. It comes down to, do you think the rise in state regulatory agencies was the result of the deregulation that we saw from the federal government? Or were the states filling a gap that they felt was necessary apart from that? Dodd-Frank and certain consumer protection regulations give a lot of power to state attorneys general and state financial agencies. We've seen California, we've seen New York, Pennsylvania, Maryland, New Jersey, all take steps to ensure they can regulate as they see necessary. It may not be to the extent that we saw in California, but we may have these mini-CFPBs or mini agencies with the same focus as the Bureau start popping up. I would expect that we probably will, whether or not you see a ton of enforcement from these groups or whether it's the foundational element to be prepared to see if we see another shift back to what we have seen over the last four years may be an open question. en I think the other question is, where did these state agencies arise? Does this become another red state versus blue state divide? at's just another kind of separation, and it impacts where companies are setting up to do business. LOOKING BACK OVER YOUR CAREER, WHO WERE YOUR MENTORS, AND WHAT WERE THE MOST IMPORTANT LESSONS THEY INSTILLED? I would highlight one person: Jim Costa, former CRO at TCF. From that perspective, he taught me the strategic value of risk. Risk management is often seen as a roadblock, and that was never the goal. One of the things that I tell my team all the time, it's our job to support the know, K-N-O-W, and not just to say no. It's our job to partner with everybody across the bank for the better good of our customers and the bank. If we identify a potential issue, whether it's from a compliance or other risk perspective, it's our job to get in the foxhole and work and determine how we're going to address that issue in support of the bank's strategic goals. at was something that I learned from Jim early on, the need to have a balance as we're looking at risk. We need to understand risk, but we also need to be aware that it's our job to support and enable the growth of the institution. We have to make sure that we're doing it in a safe and sound manner, controlling against all the risks that we can encounter as we go to market with any product, any new service, in any new geography. e risks that we encounter in banking are never-ending. It's our job to understand them. It's our job to control them. But more than anything, it's our job to enable the growth and success of the bank. David Wharton is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in journalism. Wharton has over 17 years' experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. Wharton and his family currently reside in Arlington, Texas.

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