October 6, 2023

Tell Hawley Exactly How You Feel About His Credit Card Proposal

“It’s just basic fairness.”

That’s what Sen. Josh Hawley said about his legislative proposal to cap credit card interest rates at 18%. In an interview with St. Joseph News Press, Hawley said that because of inflation, “more and more people are having to use credit cards to buy gas, to get groceries, pay their rent” and that is someone misses a payment, “you get hammered. People just can’t afford this.”

“What people can’t afford is Hawley’s bill,” said MBA President and CEO Jackson Hataway. “We understand his intention of helping consumers, but Hawley’s bill isn’t the answer. His proposal will put the individuals he wants to help in harm’s way.”

If enacted, this bill immediately reduces credit access for consumers who need it the most. Capping rates means fewer choices for consumers as many financial institutions that issue credit cards may cease operations or be forced to offer significantly lower limits on cards. This forces consumers to resort to alternative credit providers — which are not regulated — that charge exorbitant fees.

Hataway said that in the interview, Hawley notes he’s unsure if “his proposal has legs” and “anticipates opposition from banks.”

“We want the senator to know exactly how our industry feels,” Hataway said. “Regardless of whether your bank issues credit cards, our industry must vocally and staunchly oppose all rate cap proposals on credit products. If this bill passes, it will lead to even more proposals mandating caps on any type of credit product.”

MBA urges bankers and their boards to contact Hawley to express your opposition to this legislation. At MBA’s website, you can send your message directly to his office. To make your message even more impactful, add your own concerns.

“Banks across Missouri are committed to protecting their customers and their financial well-being,” Hataway said. “Hawley’s bill will only harm consumers, and we must ensure he hears this loud and clear from every single banker.”

Luetkemeyer Speaks Out Against Credit Card Competition Act

Congressman Blaine Luetkemeyer said legislation that imposes government mandates in credit card routing is not “an acceptable scenario.”

The Credit Card Competition Act would force card-issuing financial institutions to choose among routing networks set by the Federal Reserve and end credit card reward points. The legislation would dramatically reduce interchange income from credit card transactions while increasing security and fraud risk.

“When a large retailer experiences a data breach, thousands of credit cards must be reissued and hundreds of thousands, if not millions, of dollars in fraudulent charges must be repaid to consumers,” Luetkemeyer said. “Interchange fees cover those expenses. An attempt to eliminate interchange fees is an attempt to eliminate those services.”

He added that “the Credit Card Competition Act would force consumers to either swallow the cost of fraud or sue the retailer who suffered the breach to get back their money. Neither is an acceptable scenario.”

“We applaud Congressman Luetkemeyer for speaking out against this misguided bill,” said MBA President and CEO Jackson Hataway. “We encourage other members of our congressional delegation to follow the congressman’s lead in opposing this legislation that props up highly profitable big box retailers while harming Missouri families.”

Supreme Court Hears Case Challenging CFPB Funding

On Tuesday, the U.S. Supreme Court heard arguments in a case challenging the funding of the Consumer Financial Protection Bureau. The court took up Community Financial Services Association of American v. CFPB on appeal following a ruling from the 5th U.S. Circuit Court of Appeals. In October 2022, the 5th Circuit found the CFPB’s independent funding through the Federal Reserve System without expressed annual appropriation violated the appropriations clause of the U.S. Constitution. Since this ruling, this claim has been added and made in other cases challenging actions taken by the CFPB. 

More than 30 different groups or individuals weighed in on the case by filing amicus curie briefs (friend of court). This included different groups of states taking opposite positions, as well as members of Congress, academic groups and business trade groups. 

Some media outlets reported that the justices seemed frustrated with the presentation and arguments presented by Noel Francisco, the CFSAA’s attorney. Counsel apparently struggled to distinguish fee funded agencies and entitlement programs from the CFPB’s unique authority to draw upon the Federal Reserve System. Media comments and reports from advocates of the agency appeared to be optimistic after the argument while opponents were quiet. 

“It would be very disappointing if this appeal and challenge to the CFPB’s funding structure and lack of accountability was lost on a fumble,” said MBA General Counsel Keith Thornburg.

A decision from the court is expected in 2024.

MO Banker Named Emerging Leader By ABA

Becky Buhr, executive vice president for retail banking at Bank of Franklin County in Washington, was honored by the American Bankers Association with its 2023 Emerging Leader Award. Buhr is one of 12 bankers from across the nation to be recognized by ABA.

The ABA Emerging Leader Award recognizes the next generation of bank leaders who are committed to the highest standards of achievement and service to both their industry and their local communities.

“An emerging bank leader is someone who sees beyond their current title, job description or role. They don’t view those things as some sort of a limitation,” Buhr said. “They continuously work to develop themselves, but more importantly, they instinctively work to develop those around them.”

MBA honored Buhr in 2022 with its Young Bankers Leadership Award. She chaired MBA’s Board of Trustees for Banker Education and is a faculty member for the Graduate School of Banking at Colorado in Boulder.

Buhr will be recognized during the ABA Annual Convention scheduled Oct. 8-10 in Nashville.

Davidson Announces Retirement From GSB-WI

Kirby Davidson, president & CEO of the Graduate School of Banking at the University of Wisconsin-Madison, has announced his retirement, effective Dec. 31, 2024. Davidson joined GSB in 2000 as the vice president of marketing and banker relations. He was promoted to president and CEO in 2008.

During Davidson’s tenure as president and CEO, the school expanded its programming, adding four additional specialty schools (IT management, IT security, sales and marketing and digital banking), in addition to the HR and Financial Managers Schools that were introduced in the early 2000s. Davidson, along with key faculty leaders, also worked closely with the Wisconsin School of Business so that graduates of GSB’s primary Graduate Banking School now receive the prestigious Executive Leadership Certificate from the Wisconsin School of Business — the highest leadership certificate available from UW — in addition to their GSB diploma.

The QTI Group will conduct the search for the new president and CEO. The search will launch in January 2024.