Top banking news this month: November 2022

November 30, 2022 12:32 PM

In this month's roundup of American Banker's favorite stories: the inaugural list of the Most Powerful Women in Credit Unions goes live, TIAA exits the banking space, the Consumer Financial Protection Bureau investigates U.S. Bancorp over unemployment payments during the pandemic and more.

Click here to read last month's roundup of banking industry news.

The Most Powerful Women in Credit Unions, 2022

Cardshow by Editorial Staff

The credit union industry is, at its heart, one of the most diverse in financial services. Each institution caters to its own demographic, ranging from specific underserved communities as small as a single county to the full global scale of the U.S. armed forces.

In its inaugural Most Powerful Women in Credit Unions listing, American Banker is proud to share the stories of 25 of the women leading the credit union industry through times of rapid and unprecedented change.

Click here to read the full story.

Bank employees sorting and counting money inside bank vault. Large amounts of money in the bank.

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Deposit outflows are forcing some banks to play defense

Article by Polo Rocha

A growing outflow of deposits is starting to cause headaches for some banks, forcing them to play defense in order to maintain enough cash to make loans.

The quickly shifting picture — an effect of the Federal Reserve's rapid interest rate increases — is prompting many banks to raise their deposit rates to prevent customers from leaving for higher-yielding alternatives.

Some depositories are also filling in the gaps by turning to costlier options, such as the brokered deposit market or the Federal Home Loan Bank System, to fund their loans.

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Professional IT Programer Working in Data Center on Desktop Comp

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Bankers design a new blockchain that works like bitcoin — but it's regulated

Article by Penny Crosman

A team of technology experts within banks and technology companies have designed an anti-bitcoin. It's the architectural drawings for a distributed ledger that borrows many of the concepts behind bitcoin. But instead of existing outside of the government and the current banking system, the way bitcoin and many other cryptocurrencies do, this version would be used by central banks, traditional banks and some fintechs — and fully regulated.

The idea is to counter the rapid rise of unregulated digital currencies with an approved and supervised form of digital dollar, and along the way help modernize many outdated payment rails and other tech platforms used in financial services.

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Retirement giant TIAA to exit banking

Article by Jim Dobbs

TIAA in New York is selling its bank unit to a group of investors as part of a broader strategic plan under new leadership to refocus on the company's core retirement and asset management businesses.

The privately held retirement giant said Thursday that the investors — which include funds managed by Stone Point Capital, Warburg Pincus, Reverence Capital Partners, Sixth Street and Bayview Asset Management — will each own noncontrolling interests in TIAA Bank. The parties did not disclose the financial terms of the planned sale.

Under the terms of the deal, which is expected to close in 2023, nearly all the $38.6 billion-asset bank's current assets and business lines will be acquired by the new ownership.

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U.S. Bank is one of the largest players in the business of distributing unemployment benefits. Since the start of the pandemic, the Minneapolis bank has had contracts with government agencies in more than 15 states.

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CFPB probes U.S. Bank over unemployment payments during pandemic

Article by Kevin Wack

U.S. Bancorp is the latest bank to face an investigation by the Consumer Financial Protection Bureau into the administration of unemployment insurance payments on prepaid debit cards during the pandemic.

The Minneapolis company disclosed the CFPB probe in a securities filing Tuesday. It also said that it is cooperating fully with all pending investigations. A company spokesperson declined Wednesday to provide further comment.

U.S. Bancorp's filing did not specifically mention fraud, but numerous banks have been contending with the consequences of fraud in connection with expanded unemployment insurance payments during the COVID-19 pandemic.

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A decision by the U.S. Court of Appeals for the Fifth Circuit last month could have drastic implications for the Consumer Financial Protection Bureau and other bank regulators in the likely event that it comes before the Supreme Court.

Eric Lee/Bloomberg

What happens when the CFPB's funding question hits the Supreme Court?

Article by Kate Berry

The Consumer Financial Protection Bureau is widely expected to end up back before the Supreme Court defending itself for a second time in yet another review of whether the agency's structure is constitutional.

Legal experts are gaming out the various options for the CFPB after a three-judge panel of the U.S. Court of Appeals for the 5th Circuit ruled on Oct. 19 that the bureau's funding is unconstitutional. Three justices appointed by former President Donald Trump unanimously found that the CFPB's funding through the Federal Reserve violates the separation of powers clause because it occurs outside the congressional appropriations process.

Constitutional scholars and legal experts said the Supreme Court is likely to expedite a review of the case as early as next year, in its current term, given the potential impact on other federal agencies — particularly the Federal Reserve.

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Senator Dick Durbin, a Democrat from Illinois, is co-author of a bill — along with Kansas Republican Roger Marshall — that would require large banks to allow credit card transactions to occur on at least two unaffiliated networks. Durbin and his allies will attempt to get the measure passed in the post-election lame- duck session of Congress.

Eric Lee/Bloomberg

Swipe fees may come to a head in lame-duck Congress

Article by Claire Williams

WASHINGTON — A bill that aims to reduce the largest payment networks' leverage on swipe fees could get new life after the midterm elections come to a close.

The legislation, spearheaded by Sens. Richard Durbin, D-Ill., and Roger Marshall, R-Kan., would require large banks to allow credit card transactions to occur on at least two unaffiliated networks. One of them would have to be a smaller network, rather than Visa or Mastercard. The House has also introduced companion legislation.

The bill was originally introduced in July, but its proponents' hopes to pass it into law have since been tied to the National Defense Authorization Act, which lawmakers plan to take up in the lame-duck session after the lawmakers return to Washington following the 2022 midterm elections. That makes the bill one of the only items of interest for banks during the lame-duck session.

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Credit union regulator says liquidity risk is top priority for 2023

Article by Ken McCarthy

Many credit unions are facing potential problems with their liquidity because they are saddled with portfolios full of low-yielding loans but face competitive pressure to increase rates on deposits.

The speed at which this situation developed is part of why liquidity risk is among the National Credit Union Administration's biggest priorities going into 2023, John Kutchey, eastern regional director for the National Credit Union Administration.

"The world has changed pretty significantly over the last six, seven, eight months. The rapid increase in interest rates has changed the landscape of just about everything, including your balance sheet," said Kutchey, who spoke at the CrossState Credit Union Association's CU Reality Check conference last month in Hershey, Pennsylvania.

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Venus Williams at the Most Powerful Women in Banking Conference 2022

Donna Alberico

American Banker exclusive: Venus Williams on pay equity and a winning mindset

Article by Mary Ellen Egan

While Venus Williams is probably best known for her prowess on the tennis courts, she is also an entrepreneur who has founded an activewear line, EleVen, and an interior design firm, V Starr — as well as a part-owner of the Miami Dolphins football team.

But the five-time Wimbledon singles champion is also a pay equity advocate who successfully convinced the celebrated British tournament's organizers to give equal prize money to both the male and female champions.

In 2005, the day before she competed to win the Grand Slam for the third time, she met with the International Tennis Federation board to discuss the pay gap for women in the sport. It didn't work.

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A rendering shows what the FNB Financial Center will look like when it's completed in 2024. F.N.B. Corp. will serve as the anchor tenant in the 26-story building.

F.N.B. Corp.

2022 bank reputation: Payoff for thinking outside the box

Article by Miriam Cross

Normally a new bank headquarters would hardly draw much attention.

But F.N.B. Corp. in Pittsburgh has proved to be an exception to this because of the unusual choices management has made in developing its new office building.

The partially constructed 26-story tower, to be called FNB Financial Center, is scheduled to open in 2024 with the bank serving as the anchor tenant. It will occupy the former site of the Civic Arena, where the Penguins, Pittsburgh's National Hockey League team, once played. The Hill District neighborhood that surrounds this site is historically Black, and experienced turmoil in the 1950s and 1960s when a redevelopment project displaced many residents.

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