Bob Kottler is chairing the Consumer Bankers Association at one of the most critical moments in the history of the nearly 100-year-old trade group.
The CBA is expected to repeatedly cross paths with the Consumer Financial Protection Bureau in the new year. Kottler, the director of retail and small-business banking at Iberiabank, will likely play a key role in those interactions.
The CFPB was busy this year, issuing its first enforcement action in July by hitting Capital One Financial with $210 million in monetary damages. The agency is showing no signs of letting up, with a slew of rules expected in coming months.
The CBA hopes to work with the bureau as it drafts new rules and monitors banks’ activities, Kottler says.
In a wide-ranging interview, he also says there are opportunities for the CBA to work with its members as technology changes how customers interact with their banks. The following is an edited excerpt.
What do you want to accomplish next year as the CBA’s chairman?
BOB KOTTLER: I think our goal is threefold. We want to continue to advocate on the legislative front, especially with the CFPB. We also want to continue to educate the industry so we can grow future bankers. I also want to bring the retail industry together so we can continue to innovate and take care of customers.
Can you provide specific examples of what you hope to do in your new role?
We have spent a lot of time with the CFPB. [CBA President Richard Hunt] reached out early, as did our membership, to provide input and information to the CFPB. One of the ways that we can work with them is to continue to provide information and feedback about the things that they are thinking about doing.
One of the things that we think is critical is that transparency is a good thing. We agree [with the CFPB] that financial literacy and having our customers make informed decisions is a really good thing.
Is transparency something that will help restore the banking industry’s reputation?
I think it will. One of the things that’s really important for the industry is to be well respected by our customers. If you talk to the customers, they think we are doing a good job for them.
We want to take that to the next level, so things like having concise and clear checking agreements and credit card agreements are a good thing. We want our customers to make good decisions. We want them to feel good about the decisions that they make. If they do, then they will come back and do more business with us.
What do you see as your greatest challenges at the CBA in 2013?
We want to grow our member banks. We ask our bankers to get out and call on customers. Richard Hunt and Liz Terry, who is in charge of membership, are spending lots of time on the road calling on prospective members, as well as calling on existing members, to make sure they are engaged and … that we are doing what we need to do.
I think that continuing to work with the CFPB will always be something that we spend a lot of time on. The CFPB has a lot of rules coming due, so we want to be in the middle of that and be able to provide feedback and input.
I think one of the most interesting things our industry is going through is a big strategic transition from a retail banking standpoint. Traditionally, our customers all banked in branches. We spent a lot of time as an industry building and running branches.
Today our customers are using mobile banking, remote deposit capture, online banking, and depositing at image ATMs. They are coming into the branches less. As an industry, we have to figure out what that strategic shift means. One of the places that the CBA can provide a lot of value to membership is to help facilitate the conversation.
What is your position on branches? Do you think they are obsolete or still a necessary part of banking?
I still think they are a very critical part of banking. Customers still want to come into a branch, especially when they need advice [or want] to open accounts. If you look at where customers open accounts, the vast majority of accounts are still opened in branches, although online channels are being used more and more.
Having said that, I think there is a combination of digital channels and branches together that make sense. I think the interesting thing is what does that transition look like and what do we do different than we do today.
Are there any rules that the CFPB is working on that the CBA is especially interested in?
There are clearly a number of things [the CFPB is] working on. The qualified mortgage rule is certainly something that affects our industry. They’ve talked about rules for prepaid cards and student lending and overdraft, which are clearly something that our membership is interested in.
One of the things they have to work on is data collection around small-business loans. That’s another one that clearly affects our membership and want to provide feedback to them on. Those are some of the key ones.
How would you summarize 2012 for consumer lending?
It was a bit of transition year. I think a lot of our member banks accelerated lending. A number of banks had seen good growth in home equity loans as well as a lot of our banks focused on credit card lending. People started to move away from the financial downturn and get back into doing more consumer lending. One thing that was a big transition was a lot more small-business lending went on. I think that’s a good thing. I think small-business lending had really dropped off after the downturn. Although it is still not where it was, it has picked up a lot.