Simply Stated - All Things Finance - Conference of State Bank Supervisors (CSBS)

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COVID-19 Financial System Update, March 23 Mar 23, 2020

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Follow all updates on COVID-19 Financial Services here: https://www.csbs.org/information-covid-19-coronavirusRead the shownotes in full here: https://www.csbs.org/covid-pod1Good afternoon, and welcome to the COVID-19 Financial System Update. During the ongoing pandemic, news is happening at a rapid pace. And we at Simply Stated realize that you might miss something important. So we will be sharing the most recent financial stories, regulations, guidance and more surrounding the pandemic. Each news item shared here will be available in a single link, available in shownotes of today’s podcast and from the homepage of CSBS.org. So, let’s get started. It’s March 23, and here are the news updates as of 4:40 PM Eastern Time.

#20 - What Happened in the Repo Market? Mar 19, 2020

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Hey folks.A lot is going on right now. As companies go remote, businesses shut down, and we all work on social distancing during the COVID-19 Pandemic, we here at Simply Stated have also gone remote. In the coming weeks, we are completely retooling our programming to focus on the Coronavirus pandemic, steps regulators are taking to strengthen and protect the financial system, and advice for bankers and consumers alike during this time.One big thing you are hearing about in the news right now is all the steps the Federal Reserve is taking to stave off the economic impact of the pandemic. The Fed has cut interest rates to near zero, is re-starting quantitative easing like it did in the 2008 Financial Crisis, and it’s actively trading in something commonly referred to as the “repo market.”But this isn’t the first time in the last year that the Fed has been working in the Repo Market. Last fall, another far-less-noticed crisis occurred in that market that led the Federal Reserve to intervene.So, just a few weeks ago, I talked with an economist who could better explain to me what the repo market is, why the Federal Reserve sometimes participates in the repo market, and what exactly happened last fall.Even though this recording is just 3 weeks old, some of the information is going to feel dated due to recent developments. But the story and lessons in it are even more relevant today than they were at recording. So, we decided to provide it to you anyway.Please keep up with us. I’m Matt Longacre, and this is Simply Stated.

#19 - Are Consumers Using Mobile Payments? Are they Safe? Are they Protected? Mar 05, 2020

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Guest: Rachel Siegel - Senior Associate, Consumer Finance, The Pew Charitable TrustsHost: Matt LongacreTimestamps2:22 - What is a "mobile payment?"4:10 - Are mobile payments companies utilizing the current infrastructure or building their own?6:10 - What are consumers saying about mobile payments?7:36 - Has mobile growth payment slowed?9:11 - What causes some consumers to decide not to use mobile payments?10:26 - Do consumers understand the protections they have when using a mobile payment?11:47 - What protections do exist for consumers?13:37 - What needs to happen for mobile payments to grow?14:45 - What are "real-time payments?" What is FedNow?16:46 - What is the impact for consumers of a real-time payments system?18:50 - Are there risks associated with real-time payments?It feels like you can do almost anything on your phone nowadays. Beyond just, you know, making a phone call, there’s listening to music, texting, games, photography, changing your thermostat, watching the delivery driver drop a package at your front door… The point I’m trying to make is that more and more of our lives have been driven into our mobile phones. And where people go, so goes money. Shopping, sending cash to your friend or super, paying your Uber driver… all of these things are part of a growing financial ecosystem known as “mobile payments.” But, I’m just curious… do you really know what’s going on with your money on these apps? Is the cash you store on them secure? Are your payments protected from fraud like they are with a credit card? Am I the only one who is totally clueless about this yet still continue to use these apps?Today, I sit down with an expert from The Pew Charitable Trusts to talk about an interesting survey they conducted about consumers and mobile payments. We try to answer the questions: Are consumers adopting mobile payments technology as fast as everyone expected? Do consumers trust mobile payments? Are they running into issues and, if so, are their issues getting resolved? What sort of mobile payments are protected and what aren’t?

Soundbite: What Does "Fintech" Even Mean? Feb 27, 2020

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Today, we talk with CSBS Senior Legislative Vice President and Deputy General Counsel Margaret Liu and try to define exactly what everyone means when they call a company a "fintech."

#18 - Revolutionizing the Supervision of Fintechs & Nonbanks Feb 20, 2020

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Right now, in San Francisco, over 800 people have gathered for the 2020 NMLS Conference. The System, initially designed to handle all the work that goes into licensing mortgage loan originators, is now used for all sorts of nonbank financial companies.This conference attracts everyone in the nonbank space. State regulators, federal regulators, licensees, the press... And the meeting serves as a forum to discuss what's new in licensing and compliance. It's all centered around this platform - NMLS.That's because NMLS revolutionized how companies got licensed. It sped up the time for approval, it made it easier to get licenses in multiple states and even made completing the test you take to get a license way more straightforward.This year, there's some big news coming out of the conference. An entirely new piece of tech - the State Examination System - seems poised to revolutionize how regulators examine - or "check in" - on these companies.All of this is a big push for a more "networked system of supervision." Today, I sit down with CSBS President and CEO John Ryan to talk about this concept. What does a "networked system of supervision" look like for nonbanks? What is the vision for a fully tech-enabled world of compliance? What is a day going to look like in the life of an examiner?

Simply Soundbite: What's an ILC? Feb 13, 2020

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Simply Soundbites is a new mini-series on the Simply Stated Podcast, where the guest of the week explains a complex topic or definition from the news in ten minutes or less.Today we ask Darryle Rude, Chief Examiner at the Utah Department of Financial Institutions, what an Industrial Loan Corporation is(also known as an Industrial Bank or ILC).Editors Note: At 3:28, we discuss a "loophole" for ILCs. From a technical perspective, it is an exemption for ILCs, not a loophole.

#17 - What's Faster than Fast? - Real-Time Payments and FedNow Feb 05, 2020

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In recent years, there’s been a new obsession with something called “Real-Time Payments.” It’s the idea that everything it takes for one person to send money to another could happen instantaneously.Host: Matt Longacre,Guest: Joey Samowitz, Senior Analyst, Policy, Conference of State Bank SupervisorsTimestamps:2:05 - The Journey of a Check in the 20th Century6:05 - How 9/11 Stopped Your Check from Flying Commercial8:33 - How Does Money Move Today?10:34 - What's a Real-Time Gross Settlement System?11:25 - What's a Net Deferred Settlement System?12:52 - Are there any Real-Time Payment Systems Today?14:15 - Why Create a New System if one Already Exists?16:18 - What's in it for the Consumer?17:38 - Who is for FedNow? Who is Opposed?18:57 - How did the Federal Reserve Gather Feedback for FedNow?Editor's Comment: During the interview, we discuss how "50% of banks have been reached by the Clearing House RTP system." This system has in fact only reached 11 of the 24 banks that currently own The Clearing House, accounting for 50 percent of all deposits.Paying someone feels so simple nowadays, right?Whenever I go out to dinner with friends and we need to split the check, they just tell me to “Venmno them” or “Paypal them” or “Zelle them” (Okay, nobody’s ever actually told me to Zelle them, but you get my point). And even the old, "slow" systems seem faster! When I get a check, my bank lets me snap a photo of it and deposit it.But even though the transaction kind of feels instant, it’s still anything but. When I add that check to my account, it says “Pending.” And the bank tells me to hang onto that check for a couple days in case something goes wrong.It turns out that, behind the scenes, there’s a vast system of machinery working to make sure the little bits and bytes of data on my phone represent real transactions. They want to be sure that everyone actually has the money they say they have and that the money is getting safely from bank A to bank B. That process can still take a while to complete. In recent years, there’s been a new obsession with something called “Real-Time Payments.” It’s the idea that all this should be able to happen (the movement of the money, the confirmation that person A has the funds, the deposit into person B’s account) instantaneously.Today, I talk to an expert who knows more about the hard work going into making payments faster. We talk about how checks cleared before, where we are today, and what new and innovative “Real-Time Payments systems” mean for the future.

#16 - FDIC Chairman Jelena McWilliams - Community Banks, Supervision, And the Future Jan 21, 2020

Show notes

Timestamps:1:39 – Intro2:45 – Why does the Community Bank Research Conference exist?5:11 – Why the FDIC Joined the Research Conference7:06 – What Impact has Research had on Policy for Community Banks?13:41 – How Does the FDIC Build Trust with its Regulated Banks?19:20 – What is a Community Banker’s Biggest Risk Right Now?24:33 – Community Banks and Fintech? Friend or Foe? Adapt or Ignore?26:50 – How do States and the FDIC Collaborate?34:05 – What to Regulators Wish Bankers Understood About Them?38:39 – Time Travel! What Does Community Banking Look Like in 2030?Supervising banks anywhere is hard work. But there’s an extra challenge when supervising institutions in the United States: more than any other nation in the world, we have the most diverse number and type of banks themselves. These banks can be globally, nationally, or locally-focused. Some of those most locally-focused banks are commonly referred to as “Community Banks.” Community banks have played an important role in serving rural areas, towns, and cities for more than a century. But supervising and truly understanding so many institutions with such diverse purposes and goals requires regulators and leaders truly “in the know” about America’s diverse localities. Today, I sit down with two of the most “in the know” people there are when it comes to community banks. How do we go about understanding them? How has what we’ve learned impacted our view of the nation’s financial system as a whole? What does a fintech-filled future hold for America’s uniquely-diverse banking system? Listen to learn more.

#15 - A New Exam System is Coming. How Will it Impact You? Dec 12, 2019

Show notes

Time Stamps1:55 – What is the Supervision of Non-Banks Like Now?8:45 – What is the State Examination System? What Will the Experience Be Like for Regulators?15:55 – What Will the Experience Be Like for the Industry, and what are some of the coolest features of the system?23:30 – What’s Next? For State Supervision, for NMLS, for SES? What’s the next step in this process?If you work for a financial company that's not a bank, chances are pretty good that you need licenses to operate in the states you work in. If you're a regulator of these companies, you've got a lot of licenses to supervise. You may need to examine companies every so many years, or you may need to examine based on risk. And you also need to work with your colleagues across state lines to coordinate.And this is important work. These exams ensure companies are operating in a safe and sound manner. They ensure that consumer protection laws are being followed.But, with 50 US states, and tens of thousands of companies (that number only continues to grow), you can see how this is a behemoth task.Today I talk to two minds who work day in and day out to tackle this problem. They are working on a new system - the State Examination System - that works with the licensing system present today to make examinations faster, more efficient, and more meaningful for regulators and companies.If not often that regulatory work can be made less burdensome and more effective, but we may be in one of those rare moments.

#14 - What Keeps Community Bankers up at Night Nov 22, 2019

Show notes

CSBS, the FDIC, and the Fed have this annual conference every year about community banks. And we get together these brilliant economist, and statisticians, and we even do a poll! A poll of community banks all across the country. And we look at all the data and research, and it’s pretty informative.But we also learned pretty quickly that we weren’t capturing everything that was going on. Community banks are local, just like these local interviews that I’ve slowly learned to appreciate. So we started doing a sort of “Vox Pop” of our own, focused just on community bankers, and we call it “Five Questions for Five Bankers.”Today, I have on an expert from CSBS who works with the state regulators that gather the feedback from bankers across the country, summarizes, and publishes it for the conference. Some of what they say can be seen in data we have, and some of what they say is pretty surprising.

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