Boca Raton, Fla., — William Cooper, the notoriously outspoken chief executive of TCF Financial Corp., had some surprising praise this week for the much-contested Consumer Financial Protection Bureau.
But Cooper isn't pulling all of his punches, especially when it comes to how his bigger rivals are handling new regulations. On Monday he told an audience of retail bankers that Bank of America Corp. "screwed the pooch" with its failed effort last fall to charge customers for using their debit cards.
Cooper, whom political observers have called a "biting and unreconstructed libertarian Republican," last year dropped its lawsuit against the Federal Reserve Board over debit card swipe fee regulations. And on Sunday, Cooper found a few kind words for the banking industry's newest regulator.
"At least so far, the big boogeyman that they expected to come out of that thing hasn't come out of it," Cooper told American Banker during a retail financial services conference on Sunday.
"A lot of the abuses of the banking system occurred not in banks, and maybe those things do need some regulation," Cooper said, pointing to the CFPB's crackdown on payday lenders as one example.
The CFPB's scrutiny of such non-bank financial companies "cleans up our image," Cooper said.
"To the degree that a mortgage [company] that's not a bank is creating this bad image, I get the image. It's all 'bad bankers.' So if we can clean up some of that, that's good. And some of these practices do need to be cleaned up," he added.
But Cooper is far from having a political change of heart. Even in the wake of TCF's failed lawsuit to overturn the Durbin amendment to the Dodd-Frank Act, which capped debit interchange fees, Cooper said he believes the new rules could be overturned after the presidential elections in November.
"Assuming there's a change in Congress and a change in the White House, this is now a pretty unpopular bill. And in connection with the repeal of portions of Dodd-Frank, I think this might go with it," he said. "It hasn't had the results people wanted it to have."
While TCF's lawsuit was not successful, Cooper argued that it helped push the Fed's cap on debit card swipe fees to around 24 cents per transaction, or about twice the 12-cent cap that the Fed initially proposed.
"I think our lawsuit did result in the [Federal Reserve] increasing the price [cap]. They doubled what they said they were going to do," Cooper told American Banker.
He said in a Monday speech at the conference that the lawsuit "forced [the Fed] to examine some of the legal issues of how that fee was being proposed in the legislation."
During his speech, the head of the Wayzata, Minn., bank estimated that compliance and regulation account for 15% to 20% of TCF's operating expenses. He added that such costs could lead to greater bank consolidation.
"You put two banks together and the cost of compliance doesn't increase proportionally," he said.
Cooper also said on Monday that TCF had lost some customers by adding new checking account fees, though he said the ultimate effect has been mixed.
"The vast majority was people who had a secondary account who merged them into primary accounts. So it looked like there was a lot of shrinkage of accounts, but there wasn't a shrinkage in revenue," he said.
However, adding new accounts "has been more difficult" since the regulations took effect, Cooper added. "It's been more difficult for everybody."
He argued that Bank of America's failed debit-card fee effort only made things worse for TCF and other banks trying to find ways to make up their lost revenue.
"It slowed the process that was really going along towards re-pricing for the debit card. And the big banks who are scared of government in general have really backed off on those pricing changes. They're occurring but on a much slower rate," he said.
The annual Best Practices in Retail Financial Services Symposium was sponsored by American Banker and its publisher, SourceMedia Inc.