Leaders in Lending
Leaders in Lending

Episode · 1 year ago

Economic Recovery & Regulatory Changes in Lending w/ Rob Nichols at ABA

ABOUT THIS EPISODE

Banks are the economic first responders during our current economic challenges. How do regulations support banks in their work to support Americans?

On this episode of Leaders in Lending, we had a fantastic conversation with Rob Nichols, President and CEO at American Bankers Association (ABA) about regulations, economic recovery, and the optimistic future of banking.

What we talked about:

- Potential policy and regulation changes

- The economic landscape in the near future

- ABA and their relationship with Fintechs

- Future trends in banking and lending

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If you're a community bank or a midsize bank CEO, it's hard to know exactly where your technology spend should go. It's hard to know that. That's where the ABA comes in. You are listening to leaders and lending from upstart, a podcast dedicated to helping consumer lenders grow their programs and improve their product offerings. Each week here, decision makers in the finance industry offer insights into the future of the lending industry, that's practices around digital transformation. In more let's get into the show. Hi and welcome to leaders in lending. I'm your host, Jeff Keltner, and I am joined this week by Rob Nichols from the American Bankers Association. Rob, thanks so much for joining us. I really appreciate it. Jeff, happy to be here. Thanks for inviting me. Absolutely so. I imagine most of our listeners are relatively familiar with the ABA, but just in case, can you give us a little bit about the organization, kind of how you fit in the banking world and what your role is? Sure well, Jeff, there's about five thousand banks in the US, as you and your listeners know, and we are voice of all of them. Were the only there's a number of national trade group representing banks, but we're the only one that represents essentially every bank in the United States versus just a small ones. Are just a large one. So we do a lot of advocacy for, you know, for common sense banking policy, and then we also help our members from a business and operational sign and we do a lot of training and education and offer other resources. So kind of one stop shopping for the nation's banks. Have about three hundred and fifty employees in our headquarters just a couple of box from the White House. Nice and I've been to your office as in DC. I think we actually use some of your training here. It up starts. I've been through a few American banker trainings on various regulatory topics which have been very ruseful. So thank you for that. So I mean, I know you're in DC and we've got a lot of things going on and I'm curious what's you're got your eye out for for potential policy changes. As you know, we've got the new administration, not that new, I guess, anymore, but still. You know, not all the regulatory folks in place, but I think you know people expect a shift in mentality. What do you have your eye on? What do you see kind of coming down the pipe from a regulatory point of view from this administration that you're watching? Sure, we'll start big picture and then I'll kind of zero in a little bit. So the new president, Biden, has announced kind of priorities, my words, not his fixing covid you know, addressing the economical location, handling racial and equities and deal with climate change. So clearly on that, on the economic growth and the economic recovery platform, there's a lot that we can do worth the buide administration. A lot of alignment, I think, increasing access to credit and helping the economic dislocation, those facing a tough mortgage situation or a small business situation. That's where we have a ton of alignment with the incoming administration, with Janet Yell and Treasury, for example. And you're right on the regulatory side, we're going to have to new regulatory leaders at the OCC and the CFPB. Will have static leader at the FDIC and the Fed. So we're going to have some new folks that we're going to work with and then they'll be some static folks, you know, on the OCC, for example, will you know row it. Chobra hasn't been confirmed yet. He will be soon, so it'll be interesting to see the direction he takes the bureau. We have...

...some hints based on his compulation hearing a few weeks ago. Mike Sue, who's going to be the acting control or at the OCC I just spent some time with Mike the other day and I think he'll be in that capacity for a number of months, if I had to guess. But I'll tell you the area of alignment with both the regulatory community, with the Congressional community and certainly the administration, is just about helping spur and economic recovery. And what's great is all of those stakeholders realize that they that they need a fully efficient and effective functioning banking system to do that. So it's in our interest to demonstrate that we want to be part of the recovery story and they know that we need to be part of the recovery story. So, unlike the financial crisis of ten years ago, we're not the bad guys where view or view right now is kind of the solution and not part of the problem. What do you think they keep parts of that solution are for that the banking sector can offers. I think it's a great point that we are really looking at a recovery from an unprecedented and very unique moment and stress period in our history. How do you think about what it is the banking sectors really adding for value and providing in terms of, you know, assisting in that recovery process? Yeah, two things jump to mind, obviously, and that's one on the on the Housing Front, obviously of a lot of people facing for closure challenges. So, even apart from all of the government programs that were announced and implemented and rolled out last year, banks were in advance of those working with the their homeowners to keep people in their homes. No one wants to fork close on all. It's not good for the overall county, it's not good for banks. Are Good for the family. So I think just on the how leak front, there's a lot that the sector can do to be helpful. And then on the small business front, the same thing. Obviously the small business community is such a huge part of the overall economy, as you well know, and even pre cares act and and before the PPP, banks were proactively working with their small business borrowers to say hey, what can we do to help keep this business afloat? So those are two examples. But again, there's I mean there's plenty to be done, certainly, but those are just those are just examples. And then on the you know, obviously there's a lot just from a resiliency standpoint we need to do. You know, as you well know, cyber threats are huge. Ye, banks have great defenses, you know, arguably better than any other sector in the economy. But we have to remain vigilant. So I think there's you know, on the security of the banking system, they'll be work to do there for sure. Yeah, it's always more to do on that front. It's a bit of an arms race, I think, with the bad guys. But does feel like the banking sectors in good shape and kind of working with the government through PPP, do you you that as a model? The big for me it seemed like a great example of a government program industry execution in partnership that really was quite effective and achieving its objectives. And how do you think about that? It's a little different than some other government stimulus programs where you end up just kind of bypassing the private sector. Do you see that as a model moving forward for other kinds of economic disruptions, because it seemed to be a pretty effective actual program and utilization of the markets to drive some of that execution of that program yeah, so go. It's a great question. So, despite the rockiness of the launch of the PPP program which was awfully chaotic, it would arguably the mote to your point. It was arguably the most effective part of the cares act by a mile. By some emits...

...as fifty million jobs were supported, by others almost a hundred million jobs. I mean huge amounts of economic support for the small business women and men of our country. I do think it is a good model. Again, despite the rocky, chaotic launch and the lack of guidance at sometime, took weeks or months to come. You know, the fact that the government realized we need to have the nation's five thousand banks really be the key, the front lines, the economic first responders for these programs. We can't do it ourselves. They need to be on the front lines of these lending and liquidity facilities. And you know, the SBA stretched in a way. Of course they never had. You know, normally they do in a year forty billion of lending. We asked them to do eight hundred billion then. So where they're glitchs, sure, but it's basically the banks, of the five thousand banks in the US, roughly four thousand of them really, I mean eight and ten, were the ones dispersing all of that at grant money to the small business women meant women, been their community. So yeah, it was. It was a heroic effort on the part of the government and on the banks and on the small business community. Yeah, it's been remarkable to me to see how that's all played out, particularly as we've seen less disruption in many ways, on the at least the lending side, and defaults and things and the many anticipated. We've been kind of pleasantly surprised by the stability and in many ways, and I think there's a lot of credit, you know, two points. By a rocky start, which anything you're trying to exequ quickly, like a I'm going to tech world. We launched UFF real fast and you know usually comes with a few bumps along the road, but I think we ended up in a good place. So let miscause. I know you think a lot about the financial health of the consumers in the US overall. How have you seen that? You know, take let's take that ones and we talked about the small business and PPP and supporting those folks. But how do you think covid in the last year or so has really impacted the financial situation, the financial health overall of the average you as consumer? What do they look like? What does that world look like right now in your mind's definitely improving. So, putting aside the PPP which we'd discussed, you know that the economic impact payments were huge, absolutely huge. By every by every measure, banks help deliver roughly three hundred million EP payments, roughly three hundred minute. That's remarkable and a fed survey found that about a third of the people use that money to pay down debt. Another third used to save, use the money to save it, which are both, of course, two indicators of health. So there's no doubt that those were the banks played an incredibly important role there in the economy is returning and restoring its strength. We had just literally last week, Jeff Our Economic Advisory Committee, which is made up of the chief economists of the nation's largest teaen or so banks, and they meet every one months or so they see growth. This year inflation adjusted growth at around seven percent. Wow, and I was really encouraged to see that and that with that economic growth a lot of positive things will happen. Yeah, I want to take a minute here to and ask you about you know, I'd heard mention something called the Bank on Initiative that I think you've been quite involved in and kind of improving the making sure we have access to financial services for the community. Could you, I mean I've read a little bit, but I'd love for you to kind of explain for the audience what that initiative is and how you think about it's importance. And it's so important...

...to bank on having a bank on certified account. This is a their nonprofit organization called the cities for Financial Empowerment Fund, also called the CFE fund, which is the group that has that certifies bank on accounts, and these accounts, you know, allow for they have trying, you know, transaction capabilities. They're kind of the kind of no nonsense, no frills accounts. There's no overdraft fees, and what they're designed to do to bring into the banking system the seven or so million women and men who don't have our unbanked or underbank and of course, to get a leg wop in our economy you need a lot of things, but certainly among those things is you need a bank account. You give got to be part of the system. So what this is defined is to bring those seven million unbanked Americans into the banking system with an account that this Third Party nonprofit group, the CFE Fund, has certified, and it's great. We have banks all across the country that are offering these. We're about a year into this campaign to encourage banks to consider offering one of these bank on certified accounts. It's great. The numbers the FDC just a week or so ago came out with the latest numbers in the unbanked. The sended to unbanked Americans is falling. So but there's still too many. Yeah, to bring them into the system and it's for you know, it's certainly obviously once you get into a banking relationship, that's the first step to financial security and there's just too many want to have to go to, you know, one of these other areas where you're paying, you know, crazy interest rates and all that sort of thing. So we're trying to eliminate all that bring these seven million people in. I lov you know, one of the things that got upstart into the financial space was the idea of expanding access on the lending side, and I think I never appreciated, not being in the financial services space earlier, how many people are left out of the bankings, not just a access to credit, but access to just banking products at the checking account level, and I think it's so critical. So for those listeners who don't have bank on initiatives, something to think about, because I think it's a really worthwhile initiative and it is the first step to bring people into the broader financial services ecosystem. You have to kind of start here exactly. Again, the numbers declining, it's diminishing. That's great, it's still way too many and it's really hard for these people to get a financial leg up if they don't have a bank account. So this is an end kind of an entry level bank account. LOAFIES, no overdraft. I mean it is. It's exactly where you want to be to have your you know, your first account, if you're if you if you don't have a bank account. Yeah, perfect. So when you talk to your members, I mean he said, all five thousand banks are. That are kind of who you represent. What are you seeing? Is the key strategic priorities from the consumer banking point of view? I mean it, where do you see people focus? What are the kind of trends that that you're hearing about in terms of where people are putting their time, energy budget attention in terms of improving those those offerings? Yeah, and so it's really all about the user experience right now. Obviously the rapid conversions of banking and technology has been upon us, so that's not new. Yeah, but we want to meet customers where they where they want to be, and so that's the huge trend. Again, the trend was underway precovid. Covids hastened and accelerated it and then second...

...half of that, though, the critical question for banks, in addition of meeting customers where they want to be, is that how do you maintain that relationship as you move into more digital channels and you're not having as much of the human interaction? So that's the run. That's literally it's where more technology, more mobile digital channels, but at the same time banking is a relationship business. So we think we can do both. But that's that. That's kind of top of mine for us. Have you heard any kind of best practices or approaches, because this is a topic when I talk to my guests that I hear a lot is like, how do I mel the the the in person high touch experience that we want in certain instances with the digital no touch experience I want others? How do we think about kind of those two things living together and complementing one another? Do you have any advice for folks or things? You've seen that it worked really well in terms of how banks are at tackling that question of how how these two things live side by side and maybe not just compete for how people interact with the bank, but actually compliment each other. Yeah, so there's no monolithic answer. So, for example, some of our nation's largest bank, APM, and others, you know, have really good data scientists that they are able to kind of solve that riddle on their own. But then some of our nation's baller banks are looking to partner with Fintech companies and companies like yours who have who say hey, we can to help you enhance a customer experience and create a win win win. When for us when for the bank, when for the win for the customers? So not. I'd love to say there's one modelith the answer to the question there is not. Really depends on the type of bank, the size of the bank and what your particular business and digital strategy is. But that's the challenge that all the banks are facing. I mean everyone realizes there's, you know, the in all, there's wonderful things that technology can enhance from a banking standpoint, from a regulatory standpoint and ML standpoint. Those are all good things, admittedly, but at the same time you just don't want to lose the bespoke human touch that has been traditionally associated with and makes banking such a premiere industry. Yeah, absolutely. What do you think about? I mean you talk about some of the banks looking for fintech partnerships. We've certainly seen that. Are you seeing the capability in that space increase or I feel like one of the things I see from banks is a not always a clearanswer for how they think about oversight, how they think about due diligence, how they actually engage in a partnership, and they're kind of challenge to do that with a fintex because they don't really know how to do it, if you will. It's like it's a first time at the dance. They're going I don't I don't quite know what to do. Are you seeing that shift and more clarity from banks and any advice for them or for the fintext on how you kind of ease the ability to work together? So I think there's a lot of opportunity there, but also a lot of uncertainty about how to make it work and who has what responsibilities and how you really execute and provide value in that context. So great question and I've got to I've got an answer for you. So twopart answer. Part one is in the five and a half years I've been the CEO of the Aba, I've noticed a huge shift in the rhetoric, both from the banking sector and the Fintech community. So back in two thousand and sixteen, when I started, a lot of the rhetoric was the fintex are going to disrupt the entire banking sector and banks are at times pretty defensive in some cases around the FINTECH sector. That's...

...totally changed. You know what it is now it's all about partnerships and enhancing the customer experience. So to your question again, some of our nation's largest banks, you know, the g sibs and others, do not need a lot of handholding in this area. They have incredibly thoughtful, sophisticated teams. But you know, you have forty nine hundred other banks. And what we do actually, Jeff, when you talk to when you asked about the Ab at the very beginning, everyone associates us with our federal advocacy from a regulatory legisave statement. And yes, we have a huge team of a hundred people to do that. But we also have a huge team that does due diligence on Fintech companies and finds the best Finta companies to partner with banks. So we have squads of people who are talking to every FINTECH company with ear drums to say hey, are you interested in partnering with Banks? Then we want to talk to you because we are always on a hunt for ways to improve the banking sector. So we're not just surviving, we are thriving. We're meeting customers where they are. So we have have tons of Fintech companies that we work with to create marriages with banks. Again, not the Geseid can do it on their own. But but once you get down that asset ladder just a little bit, there are thousand banks who will call us up and say, Hey, rob you know, I've heard there's a new small bit of business letting algorithms to help us close these loans in half the time. There's fifty companies in the space. How do I sort throw them? And we say, Aha, we've got a team that does that. So it is complex. To your point, there's a huge market place out there. It's a huge market place and if you're a community bank or a midsize bank CEO, it's hard to know exactly where your technology spend should go. It's hard to know that. That's where the ABA comes in. We have squads of people who help banks on any part of the technology experience find the right marriage with a tech company. And so to the FINTECH companies listening. So the banks know this now. They've heard me say this repeatedly last five six years. But for the Finn Tech executives listening, please give us a call if you have an offering that you think banks would be interested in. We're interested in talking to you and we have a big team of people who for you to liaise and meet and engage with, who would love to learn about your particular offering or your service or your piece of technology. I like that advice and I certainly think the consolidation to some extent of you know, having gone through many, many bank partnership conversations now, you get asks a lot of the same questions and having a place that you can kind of have a trusted third party, he is helping dig into the details and providing some of the insight, particularly for the smaller banks it don't have expertise to oversee, they don't know how to do diligence on a certain kinds of technology, they don't have experts in house, and so I think that playing middleman between the two is really valuable both for making it easier for the fintext to engage and for the Bankes to to really meet their by side. It's a great it's a great pointer for those and for the fintext out there. Will make sure you can find a way to engage with the AVA, but certainly something we've done and it's been valuable for us. So I want to shift a little bit. Probably as we we talked about fintech partnerships. Obviously I'm starts kind...

...of place in the fintech ecosystem is is very much centered around ai and the application of Ai to financial services, which is not true. There's lots of fantaxs are in that space, but that's a lot about where we're at, and so I'm curious. How do you think about the place ai or machine learning technologies play? Why are they? Are Are they, I guess first and if so, why, important to the future banking? One of the kind of things that banks can expect to get out of engagement with technology is like that. And then I want to talk a little bit after that about how we get there and what we need to do to make that more practical. Sure so, I think you know as a great, powerful tool quickly changing how every sector does business, and I think there's a ton of opportunity in our own sector, in the banking and financial sector. I think for us it can certainly help us understand how customer have help banks better understand customers and their needs. I think in lending it could probably help banks identify credit worthy customers in other ways apart from just probably the PHICHO system, particularly by bee, for borrowers who can, you know, qualify for a loan. So I think there's a lot of opportunity, I think, from a customer relation standpoint, to meeting customers where they are anticipating their questions, you know, just like Gif as someone said to me the other day, Jeff, you know when you go on your Netflix Account, based on what you you know what you've recently watched, if he gives you an opportunity in an offering of hey, maybe you want to watch this. So I think some of that, some of that basic AI tools are probably helpful in banking as well, again not supplanting the human interaction piece, but I think they'll be a lot of opportunities for ai, and not just perhaps on the customer facing side, but perhaps also in the regulatory side and helping with Amlbsa regimes and reporting. Right now there's tens of millions of pieces of information that banks churn out annually that they give to Finson in the form of stars and CTRS that we hope, of course, finsmen and the law enforcement agencies can use to get the bad guys. You know, bankers are phenomenally patriotic. They're happy to churn out all this data. They just wanted to be used efficiently and effectively to find the drug dealer, the money lawn or the terrorist financier. And I think if I had to guess, and I'm a Treasury Alumni, spent five years as an assistant as trinity sector, so I can say this, I'm guessing there are probably areas where I can help the law enforcement authorities as well. If I had to guess, sort through the tens of millions of pieces of the financial data that the five thousand banks turn out annually. So I think they'll be some customer facing pieces and then I think there's probably some regulatory advantages over time. If I had to guess, yeah, I say the other thing we see it certainly the application of not just to the customer facing with the Internal Bank processing where there's lots of efficiencies to be gained, lots of I mean, if you think of ML is being a predictions game, there's a lot of predictions being made by banks all the time is as a fraudulent transactions as a good load. So I think there's a lot of opportunity. One of the questions I hear a lot, though, is how our regulators going to think about oversee. What are the expectations were governance? How do I approach that in the context of a model? And I know the regulators to put out a joint statement recognizing the use. There's a urfi...

...out right now from some of the regulators on oversight. Do you have any sense of where you think the Fed, the OCC CP, all the various, you know, alphabet super regulators all have like a little bit of oversight the space where they're going and what we can expect on the front from the regulators about how, how I I can it should be used responsibly within the banking sector. Yes, this will be interesting. So it's hard to make a firm for super firm prediction, but I'm glad that they're weighing in here. You know, I think you know in banking they are we you know, the different types of activity are regulated right. So, like when alone is made, the same rules apply if it's, you know, alone online or in person or generated through AI for example. So I'm not from a from a regulatory standpoint. I don't think they're they're going to the regulators are going to fundamentally change, you know, how banks are regulated. I think they will account for ai, but I think they'll account for it perhaps in a similar way, and then they do when they look at other activities. Will See, but it will be interesting to see, you know, how they weigh in. So hard to make a firm prediction. We spent a lot of times thinking about it for sure, but my guess is since the banks are all, you know, pretty heavily regulated, I'm guessing that the introduction of AI was probably not going to dramatically change the regulations. But we'll see. Yeah, it'd be sort of what we've seen, as there are many of the regulations it seemed to apply pretty straightforward. Fair lenning is a great example where maybe it's socially different approach but the regulations are not a date. I do think the place we see the biggest opportunity is consistency and guidance, some things like oversight or model governance, where those are things that are that are not always consistent or well understood at the at the individual you know, examine a regulator level and where there's some opportunity in that vein. What do you think? I'd love it, but your advice for us or for our banking clients as we think about engagement with regulators in paving the road, if you will, for the adoption of these technologies overall. What do you think we can do to kind of speed up that transition and assist with the kind of clarity and getting to a point where these are more broadly understood and felt like they're safe to be utilized? So I'll tell you a big thing we haven't talked about yet, but it's like the eight hundred pound guerrilla in the room, is to have all these fintech companies engaging with the three major core provided unders he as you got it. You got to remember of the five thousand banks in the URE, once you cut out the top one hundred or so, the other forty nine hundred of them work primarily with one of three companies, FIS by Servant Jack Henry, and those companies help banks community amid size and even regional banks deploy, you know, there the their particular customer facing offering, whatever it may be, and so so much of the Innovation and Technology Adaptation Jeff for the banks goes through one of those three companies. There are other there in total about two dozen cores. So I'm not minimizing the other twenty one course, but those three have toughly eighty, five, ninety percent of the market place. So I'll just use them as an example. But there are twenty four in total. So if you're you work for one of those other core providers and you're saying, Hey, Nichols, what about us, I totally I'm saluting you guys as well, but it's...

...those three companies that right now have a huge chunk of the market place and as they move more speedily, more nimbly and with more agility to introduce these additional customer enhancements, that's I think those will be dramatic improvements there. And you know, a lot of our members have been frustrated with the pace of innovation deployment and technology deployment and these companies have grown through Ma and some cases as well, so they can have their own technology stack, can have really new technology and also kind of outdated technology. But I will credit them. They are moving, they're moving the right direction. More needs to be done, but that's a huge that's a huge piece of this Technology Deploy Mint Chess Board and that is ensuring that those three companies are engaged with fully from all these fintech companies that want to offer their services because again, to get a bank to deploy your product or service, in many cases that will occur with and through their core provider. That's interesting. I've you know, we've done some direct regulatory engagement. We certainly engaged with books like this and I've talked to all all three of the major core providers and some of the other saw just so you do don't tell yellow Calton anymore than yelling yell and Nichols. We talked to a number of them, but certainly most of our banking clients are customers of one of the big three core providers and I found them quite quite open to engagement. But I hadn't really thought of it from this adoption and regulatory overside point of view. So that's that's a really interesting perspective and I'll have to go back to my team and say, Hey, we need to make sure we're talking to the FIS and five serving Jack Henry folks on this front as well, because it is mean there is a huge amount of footprint that they have and pretty much everything we do end up does end up integrated and going through those systems because it's it's a system of record right yeah, that is what it is. Do you think there are other things? Do you have other advice for banks or Fintax or that are kind of pushing the cutting edge for how you engage on on the the oversight front on this or the regulatory front or I'm just really curious on this points. I think it's a wave that's coming and you know, being on the front end of the way of you know, I did. We like to figure out how do we really know pave the way for others as we come down this path. Yeah, so to to other concrete suggestions, and I don't want to say I'm too much of a promotional cheerlier here for the Aba, but we have a huge innovator. We have a huge innovation team that is really looking for the future. We're looking for the future now and that's really what they're doing. We're trying to think out, Jeff, what's banking going to look like in three, four, five, six and seven years and we're trying to discover that looks like now and and move in that direction. So number one, we would if you have an idea and you think you have a stone that you'd like to show us that shows the future of banking. We're all the years. Secondly, from a regulatory standpoint, the FDIC just hired, and literally like two months ago, a new head of innovation strategy for yelling and Williams, and as name is Sultan. He is you and came out of a core provider, coincidentally, and he if you are one of these emerging companies and you want to work with banks in the banking market place, I reach out to him as well and spark a dialog also, and...

...that's not minimizing their all the OCC or the Fed. They are incredibly important. But that would be someone from a regulatory standpoint that I would I would reach out to as well, just given his room, it his newness, and Yellow McWilliams, who I know well, has really tasked him with thinking about what should the future regulatory landscape look like, given all the innovation in the second so that would be a perfect person to have a conversation with. And then we again. We would embrace any of your listeners for a conversation at any time around this subject. That's great advice. I certainly a I think right now is a moment when the regulators are really cry as they're open, they're listening. I think the RFI on AI is a great example of saying how you like give us some input. So it's great advice and names to connect, because I think it's a moment where you've got an opportunity to really close the future, because people are trying to figure out how to deal with these changes. So one of my last questions for you round is there a question you wish I'd ask that I didn't ask? I mean, what did I miss that I should have asked you during this session? Now I think you've really covered it. One other emerging issue, though, actually two, that I'll just quickly surfaces. One is our industries role, particular our association to our focus on D and I. We have had a huge track record even before the murder of George Floyd. We've done a lot in this space, not only to help the five thousand banks with regard to their own DNI learning paths. Some are super sophisticated on DNI and others are in their earlier stages of that learning path, and so we have a team of people that help some establish DNI programs. We think that's incredibly important. Similarly, we also are trying to focus on economic policies that we can promote that will help address economic inequalities that can lead to they're not the soul cause of racial and equities, but economic inequality certainly doesn't help. So or also thinking about from a public policy standpoint what we can do there. And then we also just try to lead from example at the at the Aba, and we have a group of executives that help us ensure that our own internal protocols and policies are world class in this area. So that's I don't tell you banks there's more to do, but our industry has a great track record. There again, more to do you. I'm not spiking the football, but the large banks CEO just the other day testified about their very the various efforts around D and I had those six institutions and they had quite a story to tell. Is Very positive. And then the second one. Very briefly, there's a big debate over the future of climate policy and how do we move towards, you know, lower carbon environment. The banking sector, you know, we're not the fossil fuels and industry, so we're not in the front of that of that driving it. We're in the back seat to some degree. But I think as we think about a transition, the financial sector will, I have a role to play there to help finance the transition to a lower carbon economy and I think some proportionality will be important when you look at institutions or community banks that are in energy dependent parts of the country. We want to ensure that we that that transition doesn't harm the banking sector along the way. So we're in the early stages of this. There's not yet, you know, full regulation, but the feds thinking about what should you know, should they stress test for carbon, you know, going forward? So I just wanted to surface that as an again, an emerging issue that we're spending time...

...talking to the legislative and regulatory policy makers about because, well, it's in the genesis stages, it's coming and we want to make sure we have a seat at the table to help properly contribute to the outcomes. They're great topic. I usually don't dive into climate although my private life that's a very common topic of conversation, particularly with my children. My oldest has banned me from wearing jeans because he says it takes eighteen thousand gallons of water to make a pair of genes. I had purge my closet and now I'm short things to wear. And then I actually love the call out on D and I and in racial equalities. I think it's a huge area where, you know, it's very near and due to our heart, because we do feel like, from a credit point of view, a lot of what we're doing is there to help, you know, remove some of the inequities that exists in the system and try and offset those to the greatest extem possible. But I also think one of the things I've had to learn coming into the banking sectors. You know, you talk about five thousand banks and many of them are quite small institutions. I think often it consumer as a perspective of big institution in many of them are quite small, and providing the resources to be able to have world class policies around D and I know how to execute those. It's really important because many of them aren't as well resourced as as a big guys, and I think the Abas resources to assist in that is really important to getting the industry real large, moving in a positive direction on those fronts and able to make even more progress than we already have. So I appreciate those who callouts. Thank you, Joey. Well, rob I in this podcast every week with the same three questions. So I'm going to modify one a little bit for you because you're not a banker and a lot of our guests are actually bankers. But my final and I don't think I put these on the questions list you got, so you don't you don't fully know what's coming. But my final three questions are these. Number One, what's the best piece of career advice you've ever gotten? Oh Gosh, I think it's probably it's treat your intern as well. Today, today your intern, tomorrow you're lost. So I take time to help the you know, the junior most folks in your organization, like you know, seek them. The more that you can help those junior executives become season, the better it is. But not only as you establish your you know, your pipeline, your upward mobility pipeline within your institution. You're just improving your institution as well. So help the next in line. I know Tim McGraw put it in the song, you know, help the next in line. Be Humble and kind. That really being humble and kind and helping the junior executives at your place of work pays massive dividends, not just for you personally but for the organization of large so that would be number one. Today, you're intern tomorrow your boss. That's that first time I've heard that phrase, but I like it. You are unique in your answer that questions. That's great. Psycho one I was that's what's the best piece of advice you've gotten about consumer banking or consumer lending in your career, and you've been in the banking world long of I think I can stick with that. And No, no, listen. It's all about trust maintenance. That's really that. You know, when you look at the internation of capital, the deployment of credit, which is great, it's the most, one of the most powerful things in the university. In my opinion. That's why I love serving the banking sector, leading the ABA. You know, at the center piece of that of that deployment of capital and credit intermediation is one thing. Trust, and so you know, Bank must maintain that customer and client trust and it's fragile and you want to maintain it, and so it's all about trust. So as important as the latest technology...

...is and all that other stuff. Ultimately, the banking sector relies on one thing and it's trust and credibility, and so that trust maintenance with your customer, client is of sacred and must be treated as such. I love that answer. I think it's totally true that as you deploy technologies, it's got to be in service of and in collaboration with how you maintain it build trust. I think you can actually be additive to that, that mission, but you have to keep that mission front of mine as you do that. And then my final question, and you duck this one earlier, so I ask you what's a bold prediction for? You said You could make a bold prediction about regulatory guidance for our outcomes, and I think that's fair. Whether you can pick any other area you like put you have a bold predictions that I can I can drag you back on here a year and see if you are right or not. That's something you know you expect to see coming down the pipe in the future. You know, what I am interested in is is the overall introduction of drones into banking. So I was talking to a banker and they were talking about how drones will be used more widely for both commercial and residential appraisals and nature. And I'll tell you I've not been in a ton of meetings at the Aba over the last five and a half years around drone use, but I think that's going to I think that's going to pick up. The drones are coming all right. I like it right. My son will be very excited. Good drones, not scary drone. Good in drones now it see. Now my twelve year old is going to want to go into banking rod because he loves the drones. So if he can do drones and banking at the same time he's going to be very thrilled. So we've got maybe a new entrant into the career space based on that answer. But I like that and that's a really good one. Unique and all three answers the way to go. You're good. Well, thanks for joining me. I'm very much looking forward to hopefully getting the other person. I know you guys have your annual conferences that I have typically attended and have not been able to for a while, but it looks like we might be back to that in the not too distant future, so I'm looking forward to it. We are. So we've done a year of our conferences and conventions virtually, but that's about to change. So our annual conventions in Tampa, Florida. This year it's on. It's INPERTON. When is it again? It's in Tampa and it is mid October. I think it's the summer und eighteen them. October it is on and you go to abcom to learn all about it and we'll have are I think we're gonna have a great turn out of people. Folks are ready to meet again and of course we'll do it in compliance with every health and safety protocol that's appropriate. At the time. That the jurorstick local jurisdictions. I wanted to do, but I think we're going to have a big, big, big turn out. Jeff, I think there's a lot of pent up demand. I know I haven't been in conferences and two years and I think starting at about August, my calendar is getting pretty full with at least one a month, and I'm looking forward to making and out to the Avia this year, as I have in years passed, to be able to do it in person and be people. So that'll be great. Well, rob thanks, thanks again for joining us. I really appreciate this was a fun conversation. Thank you, Jeff Listen. I really appreciate the opportunity to be with you and I loved your final three questions. And Yeah, the humble and time and the pace of one piece of advice. WANT TO BE I'm one time to maintain that sacred trust. And three, the banking and drone in her intersection is come there, you're banking and dry. I like it. It's a great, great summary of the conversation. Thanks. Thank you. Up Start Partners with banks and credit unions to help...

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