With the July 4 holiday now in the rearview mirror, things are picking back up for the banking industry.
That is, at least until everybody takes off for vacation in August.
Below are some of the most significant events to watch in the coming week, including several important hearings before Congress and a slew of bank earnings announcements.
'Tis the season: More earnings reports are ahead, on the heels of Friday’s mixed results for Wells Fargo, JPMorgan and Citigroup. Followers of banking will be looking for any signs of progress (or not) on commercial loan growth, hints of credit risk, updates on fallout from the deposit and trade wars, and outlooks for the rest of 2018. Bank of America, the last of the megabanks to report second-quarter results, will kick things off Monday. Goldman Sachs will report Tuesday, and bankers will be curious about the latest on its digital-banking platform Marcus. A host of regionals will report, too, including Comerica and First Horizon on Tuesday; U.S. Bancorp and M&T on Wednesday; BB&T, Fifth Third, KeyCorp and Capital One on Thursday; and Citizens, Regions and SunTrust on Friday.
A different kind of stress test: Jerome Powell, chairman of the Federal Reserve, is set to testify before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday. He will undoubtedly face questions about the Fed’s recent stress tests — including the central bank’s decision not to flunk several banks despite a capital shortfall — which Sens. Elizabeth Warren, D-Mass., and Sherrod Brown, D-Ohio, have already criticized. Powell will also be expected to discuss the agency’s proposals to amend certain capital standards and the Volcker Rule, along with the Fed’s plans for implementing the regulatory relief law approved by Congress this spring.
Winning them over: Powell won’t be the only high-profile official to grace the halls of Congress. Kathy Kraninger, President Trump’s pick to run the Consumer Financial Protection Bureau, will make her debut before the Senate Banking Committee on Thursday. The hearing is likely to be a critical turning point for her nomination, which has raised questions given her lack of experience with financial services. The appearance will provide the deputy of Office of Management and Budget Director Mick Mulvaney (he is also acting CFPB director) an opportunity to demonstrate her fitness for the role. While leading Republicans, including Sen. Mike Crapo, R-Idaho, the committee’s chairman, and Sen. Pat Toomey, R-Pa., who could take over the panel next year, have been signaling support for her, Kraninger is expected to face tough scrutiny from Democrats about her views on consumer finance and the role of regulation. Given her role at OMB, they're also likely to press her for details about her work on Trump's "zero-tolerance" immigration policy that led to the separation of children from their parents at the U.S. border this spring. In that same session, lawmakers will also hear from Kimberly Reed, who has been nominated to head the Export-Import Bank.
Tea leaves, please? Bankers continue to await more detail from the Trump administration over how it plans to supervise the budding fintech industry. This month is supposed to be a big one, with the Treasury Department slated to issue a report on its approach to fintech regulation. Mnuchin told lawmakers on Thursday that the report is “going through final review” and will be out “shortly.” Comptroller Joseph Otting has also said that he will make a decision by the end of the month on whether the agency will begin issuing special fintech charters.
SIFI status: The Financial Stability Oversight Council is slated to meet behind closed doors on Tuesday to discuss several ongoing agenda items, including applications from Zions to shed its holding company and from Prudential Financial to drop its designation as a “systemically important” nonbank. Regulators also plan to discuss the Fed’s recent stress tests.
More chatter: House lawmakers will talk bank capital at a subcommittee hearing Tuesday with the heads of the Financial Services Forum, The Clearing House Association and the American Action Forum, along with former acting Comptroller of the Currency Keith Noreika. On Wednesday they'll tackle digital currencies in another subcommittee hearing. Witnesses have not yet been announced.
Bankshot is American Banker’s column for real-time analysis of today's news.