U.S. Bancorp Chief Executive Officer Richard Davis said he’s “frustrated” that Congress hasn’t confirmed regulators to lead agencies in charge of new banking rules because the vacancies are hindering his industry.
“I’d like to have a better sense of where the endpoint is so we can all start marching toward that,” Davis, head of the nation’s fifth-largest commercial bank, said today during a conference call with analysts. Davis cited jobs at the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the new Consumer Financial Protection Bureau.
“Until the comptroller, or the head of the FDIC, are finally confirmed, and until the CFPB is finally appointed, you don’t get the same kind of definitive answers, and you don’t get the same kind of definitive progress,” said Davis, whose bank is based in Minneapolis.
Some of the appointments are stalled in Congress, where Republicans are trying to head off tighter bank regulation and have opposed creation of the consumer bureau. Davis, 53, is known for having a better relationship with regulators than most bankers, according to Nancy Bush, an analyst and senior contributing editor at SNL Financial. He told bankers in June not to “overreact” to the CFPB’s creation, urging them to embrace the agency and work with whomever is appointed.
“This thing has been endless -- it has ground on now for the best part of the past two years,” Bush said in a telephone interview after the conference call. “And as we go into the political atmosphere of 2012 -- and I guess we’re already there -- it just gets worse. Nobody is helped by a situation of warfare between the banking industry and the American public, and the regulators could help that.”
Davis said that banks are struggling with uncertainty as they await changes mandated by the Dodd-Frank Act, including tougher capital rules and the creation of the CFPB. Eighty percent of the country’s financial overhaul legislation is “yet to be defined,” and rules that dictate capital buffers for systemically important firms are unclear, he said.
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon pressed Federal Reserve Chairman Ben S. Bernanke in a June public forum on whether regulators have gone too far in reining in the U.S. banking system and are slowing economic growth.
Dimon and Bernanke
“I have a great fear someone’s going to try to write a book in 20 years, and the book is going to talk about all the things that we did in the middle of the crisis to actually slow down recovery,” Dimon told the Fed chairman during a conference of bankers in Atlanta.
U.S. Bancorp reported today that net income climbed 40 percent in the third quarter to a record $1.27 billion as revenue and lending expanded and fewer borrowers fell behind on payments.
“Nothing’s getting more clear or progressing very fast,” Davis said. “But our ability to now understand that it’s not going to happen fast, and our willingness to accept the fact that we have to make up some of the answers until there’s a final one, is probably much higher.”
The Senate Banking Committee on Oct. 6 approved President Barack Obama’s nomination of Richard Cordray, a former attorney general of Ohio, to lead the CFPB. Forty-four Senate Republicans have vowed to oppose any nominee without changes to the consumer agency’s structure and funding.
The consumer bureau, which officially began work on July 21, won’t assume full supervisory powers over non-bank financial firms until a director is in place.