ABA Banking Journal Podcast

The OCC is planning to unveil what Acting Comptroller Brian Brooks called “payments charter 1.0” as soon as this fall, Brooks said on the latest episode of the ABA Banking Journal Podcast, sponsored by Jack Henry. Version 1.0 would be a “national version of a state money transmission license” offering nonbank payment providers a “national platform with preemption,” but not access to the Federal Reserve’s payments system. After about 18 months of operating under version 1.0, Brooks said, the agency would roll out version 2.0, which he anticipates would include direct Fed access.

In recent interviews, Brooks has touted the idea of using the OCC’s authority to grant special-purpose national bank charters to charter payments companies. In the ABA Banking Journal podcast, Brooks provided more details about the financial inclusion requirements these charters would entail to provide consistency across depository and non-depository institutions.

“What we have to do is be creative about the way that we measure the benefit created by our charter, and what is the rational, intelligent, but not overly burdensome concomitant benefit we’d expect them to plow back into their communities,” Brooks said. “Rest assured, these charters will have some kind of financial inclusion expectation.”

Noting that banks have faced challenges adopting artificial intelligence and machine learning technologies in part because “regulators have been slow to provide guidance,” Brooks also said the OCC is working to evaluate advanced technologies that can improve financial inclusion such as AI-based underwriting.

As part of the agency’s financial inclusion efforts, the OCC’s Office of Innovation is “in the process of standing up an evaluation unit, where for the first time the OCC will analyze specific technologies, look at risk frameworks, engage in model validation and give banks guidance about what we think is good and what we think is risky. We’ve never done that before.”

The goal is to be “very specific,” Brooks added. “I’m not talking about generic guidance about managing safety and soundness and reputational risk. I’m talking about ‘What do we think about AI for credit underwriting?’ or ‘What are the fair lending and legal implications of AI in underwriting under various conditions?’ It won’t be useful if we’re not that specific.”

In addition to the topics mentioned above, Brooks described several other elements of his OCC innovation agenda:

• Changing credit bid rules for real estate owned to incentivize homeownership and renovation in distressed neighborhoods.
• The need to update vendor risk management rules to support innovation.
• The role of core processors in supporting bank innovation in a time of technological unbundling in the fintech marketplace.

Beyond appearing on the podcast, Brooks will be a keynote speaker at ABA’s Risk and Compliance Virtual Conference, July 28-30.

The latest episode of the ABA Banking Journal Podcast continues a pre-Thanksgiving tradition by interviewing the winners of ABA's 2019 Community Commitment Awards. Recorded before a live audience at ABA's Annual Convention in Seattle, where the awards were presented, each interview explores the winning program or initiative at each bank and provides insights on how they might be implemented or adapted at other banks. These stories present the perfect inspiration as we prepare for the season of thanks and giving.

The full episode presents excerpts from each interview. To listen to the full conversation with each Community Commitment Award winner, click on the links below.

• Affordable housing (co-winner): Alec Gorynski, VP for community development and corporate philanthropy, FNBO, Omaha, Nebraska, and Amanda Brewer, CEO, Habitat for Humanity of Omaha.
• Affordable housing (co-winner): Kimberly Smith-Moore, SVP and NeighborhoodLIFT program manager, Wells Fargo.
• Community and economic development: Alex Fennoy, EVP for community and economic development, Midwest BankCentre, St. Louis.
• Economic inclusion: David Loundy, chairman and CEO, Devon Bank, Chicago.
• Financial education: Louis Beck, chairman, and Keith Borders, VP for community development, Union Savings Bank, Cincinnati.
• Protecting older Americans: Debbie Gulan, regional community banking manager, IncredibleBank, Wausau, Wisconsin.
• Supporting military families: Ruth Christopherson, SVP for Citi Salutes, Citi.
• Volunteerism: Donna Dodson, AVP and banking operations manager, First Financial Northwest Bank, Renton, Washington.
• George Bailey Distinguished Service Award: Kathy Luria, SVP for community affairs and philanthropy, Webster Bank, Waterbury, Connecticut.

First Horizon Bank, a regional bank based in Memphis, Tennessee, offers some eye-catching numbers on the bank’s gender balance: Women make up 62 percent of its executive team, 54 percent of its top 1,200 corporate managers and 33 percent of its board of directors.

To mark International Women’s Day and Women’s History Month, the latest episode of the ABA Banking Journal Podcast — presented by Alkami — features three top executives from First Horizon discussing how the bank built an inclusive culture. For Beth Ardoin, chief communications officer, it’s less about focusing on women per se and more focusing on “how do we build the organization around exceptional talent, no matter who you are, where you came from?”

Hope Dmuchowski, First Horizon’s CFO, adds that for “our top talent, whether they’re female, male or diverse, we’re making sure they have lots of opportunities for lots of people that see how talented they are.” Ardoin, Dmuchowski and Erin Pryor, chief marketing and experience officer, also discuss the role of sponsorship, allyship and executive leadership in creating a culture that allows women to showcase their excellent work. “Great work always speaks for itself,” says Pryor. “How do you take those who are doing great work and helping to lift them up and to lift the women who are doing great work in the organization and amplify them?”

Resources:

• Access women in banking resources and training from ABA.
• Register for the ABA Women Lead Symposium, July 17, 2024.
• Listen to First Horizon’s Bucket List-ening podcast.

On Sept. 25, the House passed a landmark cannabis bill: the ABA-backed SAFE Banking Act, which would provide clarity to financial institutions seeking to serve legitimate marijuana businesses. In this bonus episode — sponsored by RIVIO Clearinghouse, the future of financial information exchange — ABA’s policy team breaks down:

• The significance of the House vote, which carried with an overwhelming bipartisan majority of 321 to 103.
• The mechanics of how the SAFE Banking Act address the conflict between federal and state laws over cannabis.
• The outlook for cannabis legislation in the Senate and ABA’s continued advocacy