ABA Banking Journal Podcast

On the latest episode of the ABA Banking Journal Podcast — presented by Alkami — ABA’s Dan Brown and Sharon Whitaker discuss community bank exposures to commercial real estate and how community banks are managing shifts in the CRE sector. They also dispel imprecise narratives about the state of CRE.

“There is a lot of nuance within the commercial real estate market,” says Brown. There are going to be some challenges for sure. But at the same time, too, though, there’s going to be a lot of resilience. A lot of these loans are very conservatively underwritten. I think a lot of banks would be in a very good position no matter what may come in the future.”

This episode is presented by Alkami.

If the past has any predictive power, rate-watchers may want to discount the chance of significant rate movements this election year. On the latest episode of the ABA Banking Journal Podcast, ABA VP Jeff Huther summarizes his analysis of Federal Open Market Committee actions during presidential elections, showing that in rare circumstances — well-telegraphed technical movements from a low base or during crisis moments like 2008 — the FOMC has generally refrained from taking action that could be perceived as political. Huther discusses what this means for the 2024 interest rate outlook.

“We’re really focused on increasing competition and innovation in the core provider landscape,” says ABA Core Platforms Committee Chair Kristiane Koontz. “We want to make sure that people know core conversions are an option, and we want to help make that easier and less risky for banks to undertake. But in many cases, a core conversion may not be the right path.”

On the latest episode of the ABA Banking Journal Podcast, the host catches up with Koontz at the Conference for Community Bankers to discuss the committee’s recent work on core resilience and competition, as well as the committee’s plans for 2024. The show also features past chair D.J. Seeterlin of Chesapeake Bank on the committee’s newly released Core Provider Flexibility Assessment, a tool to help banks identify what the need to power their strategies.

Sometimes there are good reasons for friction in the banking experience: to stop fraud, to comply with laws. But sometimes the friction is a result of legacy tech — and legacy thinking. On the latest episode of the ABA Banking Journal Podcast, Anne Tangen, a bank IT expert-turned-CEO at BankFive in Fall River, Massachusetts, talks about BankFive’s efforts to reduce friction in the account opening process, as well as her work to smooth the path for talented women in the community bank C-suite.

Tangen also discusses her own career experience working at banks of all sizes and how BankFive is embracing its mutual identity and investing in growth.

• Connect with peers on these issues at the ABA Mutual Community Bank Forum and ABA Women and Allies Forum, March 17 in Washington, D.C.

The multiyear effort to change the credit scoring models required by Fannie Mae and Freddie Mac continues to move forward, and mortgage lenders, credit officers and compliance professionals need to know the latest developments. On the latest episode of the ABA Banking Journal Podcast, ABA VP Sharon Whitaker provides an update. Among other topics, Whitaker discusses:

• The operational challenges of moving from today’s tri-merge system to merging just two credit reports.
• How FICO 10T and VantageScore 4.0 differ from credit scores in use today.
• Why rushing the transition might be counterproductive to the initiative’s financial inclusion goals.
• The role of core platforms and other technology vendors in supporting the transition.
• What may happen in the Federal Housing Finance Agency makes the change but the Federal Housing Administration, Veterans Administration and others don’t.
• Why the industry needs to see data on how the new credit scoring models would perform, and how banks can get involved in sharing feedback with FHFA.

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• Learn more about the credit score transition at the American Mortgage Conference, April 15-17 in Savannah, Georgia.
• Contact Sharon Whitaker to join ABA’s working group on the issue.

Late in 2023, Warsaw Federal — a $71 million mutual savings and loan in Cincinnati — was officially designated as a minority depository institution. The move to MDI status is part of the 130-year-old bank’s pivot to serving its community more deeply while building its capital base to support growth. On the latest episode of the ABA Banking Journal Podcast, President and CEO Robie Suggs discusses the bank’s strategy.

Among other topics, Suggs discusses:

• Why and how Warsaw Federal sought and obtained MDI status, and how it helps the bank meet the needs of the Price Hill community of Cincinnati.
• The role of the bank in serving unbanked and underbanked households in Price Hill.
• Warsaw Federal’s use of tier 1 mutual capital certificates.
• How Warsaw Federal is supported through its affiliation with First Mutual Holding Company.
• Her own journey as a banker and community and economic development executive.

Join mutual bank peers at the ABA Mutual Community Bank Forum March 17-18 in Washington, D.C.

Last week, the ABA Banking Journal Podcast featured the CEO of Esquire Bank, a nationwide bank with a focus on law firm banking. On the second part of this two-part series, the podcast welcomes Kyall Mai, chief innovation officer, to discuss how the bank reaches this niche market. With the goal of getting lawyers (“who are often very difficult to convince,” he notes) to switch banks, Mai emphasizes the need for content marketing, data and top-shelf technology.

Mai discusses Esquire Bank’s content marketing site, LawyerIQ, which has a unique value proposition of educating attorneys on the business side of running a law firm successfully. He explores how LawyerIQ’s AI-driven tailored content helps the bank generate leads in a niche market. He also talks about the bank’s use of Salesforce platforms and other technology services to compete for business.

Esquire Bank has found a strategy that turns the typical ratio of business client loans to deposits on its head. Through its nationwide vertical of services for law firms, Esquire Bank brings in roughly $1.80 in core deposits for every dollar lent. On the first ABA Banking Journal Podcast episode of 2024, Andrew Sagliocca — president, CEO and vice chairman of Long Island-based Esquire Bank — discusses the bank’s unique niche in serving the litigation sector, including the complex financing its clients require, and how the bank developed its strategy to meet these firms’ needs. Sagliocca also discusses the bank’s merchant services solutions and how they fit into the bank’s strategy.

On the final ABA Banking Journal Podcast episode of 2023 — sponsored by R&T Deposit Solutions — John Vivian of Patomak Global Partners and ABA EVP Hugh Carney discuss the OCC’s latest Semiannual Risk Perspective, released earlier in December. Both past veterans of the OCC, Vivian and Carney explore the agency’s findings — including the way credit risk and leapfrogged liquidity risk over the course of the year and the OCC’s concerns on artificial intelligence, among other topics — and what they portend for bank supervision in 2024.

From the Basel III endgame to Regulation II to new Community Reinvestment Act and Section 1071, 2023 has delivered a regulatory onslaught for the industry. How are bankers navigating the waves of overlapping changes? On this episode, Gary Shook, chair of ABA’s Government Relations Council, reflects on the council’s recent meeting and offers perspectives on how banks can navigate the policy environment.

Shook also highlights areas where ABA is looking to press gains on its positive agenda, including the SAFER Banking Act, the ACRE Act and financial inclusion. And as president and CEO of Community Bankers’ Bank in Virginia, Shook discusses the role of bankers’ banks in today’s landscape, including helping the industry transition to new payment platforms like FedNow.

For high-net-worth clients, generational transitions can be fraught moments — implicating business ownership sales, control transfers, tax situations, philanthropic decisions and of course family dynamics. On the ABA Banking Journal Podcast — sponsored by R&T Deposit Solutions — Todd Brockwell, president of 1900 Wealth, offers strategies for bankers and wealth managers to help their clients navigate these transitions.

A veteran of family offices in central Texas, Brockwell discusses how bankers and wealth managers can effectively approach generational dynamics and difficult conversations. He also emphasizes the importance of education, especially for young people in these families. Brockwell offers practical examples of how wealth managers can add value in family transitions.

He also discusses the business model of 1900 Wealth and how it interacts with its “old school” parent, Jefferson Bank, a community bank in San Antonio.

• Register for the ABA Wealth Management and Trust Conference, Feb. 21-23 in New Orleans.

For new couples, does the decision of how to organize their finances — separate accounts, a joint account or a blend of the two — matter? On the ABA Banking Journal Podcast — sponsored by R&T Deposit Solutions — Indiana University marketing professor Jenny Olson discusses new research that provides an answer.

Olson and her colleagues randomly assigned new couples to one of three conditions for a two-year period: using only separate accounts, using a joint account only or to a third group that received no instructions about the kind of accounts to use. Couples in the no-instruction group and the separate account group saw declines in relationship quality during the experiment, couples with joint accounts were “buffered” against the declines otherwise expected, she says.

“Because we randomly assigned couples, we can take better steps toward understanding causality,” Olson says. “Our results really do suggest that having a joint bank account improves relationship quality.” While every couple’s financial needs are unique and separate accounts may be what’s needed in many situations, Olson discusses implications of the research for how bankers and wealth managers approach financial planning conversations with clients.

• Read the paper by Olson et al. in the Journal of Consumer Research.

Family-owned businesses — especially those crossing the mark of $10 million in annual revenue — often have unique banking needs. They have the freedom to make long-term investments, but they also face challenges associated with funding for growth, complex family dynamics and the need to manage liquidity events for family members, says Mikel Williamson, the newly appointed president and CEO of First Bank in the St. Louis area.

On the ABA Banking Journal Podcast — sponsored by R&T Deposit Solutions — Williamson discusses how $6.7 billion-asset First Bank — itself a family-owned enterprise — supports this sector through its Center for Family-Owned Businesses and wealth planning options. He also discusses the bank’s investment in core transformation and open digital banking architecture and his background in Texas banking before joining First Bank earlier this year.

“When we’re able to take banking to them, at a place where they already have trust with their employer, that’s a bridge,” says Jennifer Huffman of Atlantic Union Bank’s workplace banking product. “From there we’re able to grow that relationship.”

In the latest episode of the ABA Banking Journal Podcast — sponsored by R&T Deposit Solutions — Huffman provides an overview of Atlantic Union’s Solutions Banking product, which brings consumer accounts into more than 2,300 small and midsize business clients of the bank. She discusses how it fits into Atlantic Union’s organic growth strategy, how the program developed and how it furthers the bank’s financial inclusion and financial financial wellness goals.

Huffman also discusses her career journey at Atlantic Union Bank, describes her role in the bank’s Women’s Inclusion Network and shares her tips for leadership and career development as one of ABA’s Emerging Leader Award winners for 2023.

“Banks have long supported consumers accessing their own data, but believe it should be done in a safe and sound way that provides them with control,” says ABA VP Ryan Miller. With respect to Section 1033 of the Dodd-Frank Act, the CFPB “has attempted to put that into place here.”

In the latest episode of the ABA Banking Journal Podcast — sponsored by Intrafi — Miller provides an overview of the long-awaited Section 1033 proposed rule. In this episode, Fink also talks about:

• How the bureau’s proposed framework recognizes industry-led efforts like FDX to facilitate safe data-sharing.
• The end of screen-scraping as envisioned in the proposal.
• Challenges in the proposal on liability issues and privacy.
• The need for a level playing field in terms of how Section 1033 supervision is applied across banks, nonbank fintech providers and aggregators.
• The compliance timelines envisioned for banks of different sizes and the types of accounts covered.
• How core providers will be positioned to help banks comply.

To join ABA’s comment letter working group, contact Ryan Miller.

“Capital investment has surprised a great bit of our economy and the business community,” says TD Bank EVP Bill Fink. “As rates go up, how could we be having stronger capital investment?” In the latest episode of the ABA Banking Journal Podcast — the third in a series of conversations on the business outlook, sponsored by Intrafi — Fink discusses how the fiscal stimulus of the CHIPS and Science Act and the Inflation Reduction Act, as well as state economic development packages for incentivized facilities in the high-tech, semiconductor and green tech sectors, are offsetting the increase in rates.

In this episode, Fink also talks about:

• Where businesses are looking for growth in an era of rates being “higher for longer.”
• The durability and strength of warehousing and manufacturing facilities in commercial real estate.
• Continued opportunities for add-on acquisitions amid a constrained M&A market.

“Often, economic change occurs at this level of the economy,” says Umpqua Bank EVP Richard Cabrera about the middle market of the commercial sector. “While economic concerns still linger, there’s tremendous optimism.” The latest episode of the ABA Banking Journal Podcast — sponsored by Intrafi — continues a series of conversations on the business outlook, following last week’s episode on the perspectives of CFOs at large corporates and the upper end of the middle market.

In this episode, Cabrera discusses:

• What Umpqua Bank’s latest Business Barometer survey says about optimism and growth plans among small businesses and the middle market, which represents 45 million jobs and one-third of U.S. GDP.
• How banks can work effectively with small and middle market clients, including advising on cybersecurity.
• Why small and middle market businesses in the western U.S. are more optimistic than their counterparts in other regions.
• The growing trend of onshoring and nearshoring in middle market supply chains — and what that means for their commercial real estate needs.
• The continued strength of industrial and warehouse real estate.

Corporate CFOs and finance leaders are “best leading indicators.” says Stephen Philipson, head of global markets and specialized finance at U.S. Bank. “They always have to be looking ahead.” On the latest episode of the ABA Banking Journal Podcast — sponsored by Intrafi — Philipson discusses findings from U.S. Bank’s 2023 CFO Insights Report, among them:

• Large and middle-market corporate CFOs’ accelerated transition from growth mode to cost-cutting and what the slowdown in capital expenditures and business investment may mean for the economy.
• How banks can support corporate goals for improvements in technological capabilities.
• The demand of large and middle-market corporate clients for instant payment solutions like FedNow and RTP.

This episode is sponsored by Intrafi Network.

The latest incarnation of ABA’s award-winning #BanksNeverAskThat anti-phishing campaign returns for National Cybersecurity Awareness Month in October. On the latest episode of the ABA Banking Journal Podcast — presented by Servbank — ABA’s Amy Wertlieb talks about new resources this year, including a return of the popular scam quiz and an all-new consumer-facing site plus customizable resources in Spanish. Banks can register for free and use campaign materials all month or at any point during the year. 

• Learn more about #BanksNeverAskThat and register.

With the availability of credit card rewards at stake under the Durbin-Marshall credit card bill, bill sponsor Sen. Roger Marshall dismisses consumer concerns about their rewards. “Rewards are for rich people,” Marshall said derisively at a Capitol Hill press conference on Wednesday in response to media questions about consumers’ preferences.

Facing Marshall at the press conference just happened to be nearly 50 bankers from his home state of Kansas, in D.C. for their annual Washington Visit. On the latest episode of the ABA Banking Journal Podcast — presented by Servbank — three leaders from that delegation reflect on the press conference and what they heard. The podcast guests also discuss the urgency of banker advocacy on Durbin-Marshall, as its sponsors seek to attach it to other legislative vehicles, and they debunk false talking points to show that consumers and small businesses of all income levels use and benefit from credit card rewards. They also illuminate the stakes of the Durbin-Marshall debate for everyday credit card users.

• Take action to oppose credit card routing mandates.