Capital One outage, CFPB woes and more top news in January

In January, top headlines across the banking industry featured President Donald Trump’s potential hiring freeze and other actions within days of taking office, Capital One’s five-day service outage, the future of the Consumer Financial Protection Bureau and more.

Click here to dive into the top articles across the banking space for 2024.

Trump team eyes hiring freeze, regulatory rollbacks for CFPB

Article by Kate Berry

With less than a week until Donald Trump’s inauguration, the Trump transition team was expected to oust Consumer Financial Protection Bureau Director Rohit Chopra on Monday and quickly install an acting leader while it sorts out a permanent successor.

But who will lead the agency — and for how long — remains a mystery.

The challenge is particularly difficult given the slew of regulations issued by Chopra in the final days of the Biden administration and demands by Trump advisors to gut the agency.

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Recent CFPB rules face repeal with no return under Trump

Article by Kate Berry

The Trump administration is expected to seek the repeal of some regulations finalized by the Consumer Financial Protection Bureau.

On the chopping block are rules finalized by the CFPB since August, the six-month lookback deadline for lawmakers to repeal rules under the Congressional Review Act.

CFPB Director Rohit Chopra has bombarded the financial industry with a flurry of last-minute rules that have drawn the ire of banks and congressional Republicans. Agency rules that get overturned by Congress using the CRA come with a major catch — once the rule is repealed, the agency cannot issue another rule that is “substantially the same,” an issue that could hamstring future directors.

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Why Democrats are still in charge of the CFPB and OCC

Article by Kate Berry

The Trump administration is waiting for Scott Bessent to be confirmed as treasury secretary and for other appointees to be confirmed by the Senate before naming Republican acting heads at the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau, according to banking experts.

President Donald Trump has spent many of the first days of his second term issuing executive orders on a range of topics, many of them only tangentially related to financial regulation. Though personnel change with any administration, some banking experts — who would not speak on the record when discussing internal personnel matters — say Trump is likely looking to have more of his top-line picks confirmed by the Senate before moving on to undercard agency heads.

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Chris Ratcliffe/Bloomberg

JPMorgan returns to the office. Will other banks follow?

Article by Nathan Place and Allissa Kline

Five years after the onset of the COVID-19 pandemic, banks are rethinking the work-from-home revolution.

The latest example is JPMorgan Chase. Earlier this month, the nation’s largest bank said it was requiring almost all of its hybrid workers — who already account for less than half of its total 300,000-employee workforce — to work on-site five days a week, starting in March.

For those workers, the new policy means a change in work-life balance. But for the banking industry, experts say, it also represents a much broader shift: a slow, collective return to the office after years of allowing remote work.

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Capital One’s five-day outage highlights third-party risk

Article by Carter Pape

Earlier this month, disruptions to financial transfers plagued dozens of banks, including Capital One, in an episode that highlighted the issues of technical resilience and third-party risks, two matters that regulators have given special attention in recent years.

Capital One and 26 other banks experienced outages starting Jan. 15 that caused some deposits, payments and transfers to be delayed. Financial services vendor Fidelity Information Services, better known as FIS, said Jan. 20 that a power outage initiated the disruption.

FIS provides banking operations and payments services to more than 5,800 companies and processed $12 trillion in 2023. A spokesperson for the fintech said the outage was “due to a local area power loss and a hardware failure” that occurred on Jan. 15.

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Amanda Andrade-Rhoades/Bloomberg

FDIC Acting Chair Hill lays out new regulatory priorities

Article by Ebrima Santos Sanneh

The Federal Deposit Insurance Corp.’s newly appointed Acting Chairman Travis Hill — formerly the vice chair of the agency — issued a statement on Jan. 21 saying he expects the agency to begin reviewing and repealing Biden-era bank regulations, take a softer approach to fintech and crypto, addressing so-called debanking and repairing the agency’s struggling workplace culture.

“It is my honor and privilege to serve as acting chairman of the FDIC,” Hill said in a statement. “While the FDIC faces a broad range of issues, and as always will fulfill our mandate to promote a safe, sound, and resilient banking system.”

The comments from Hill — whom Trump appointed to the temporary role shortly after his inauguration on Jan. 20 — echo many of the priorities Hill laid out in a speech earlier in January to the American Bar Association, as well as several new priorities.

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Q&A: Acting Comptroller of the Currency Michael Hsu

Article by Ebrima Santos Sanneh

During his tenure as Acting Comptroller of the Currency Michael Hsu has built a reputation as a thoughtful, even-keeled regulator, known for his ability to clearly communicate complex financial regulatory concepts with an almost philosophical level of reflection.

Appointed by Treasury Secretary Janet Yellen to the longest acting term in the agency’s history, Hsu has embraced the role with a focus on safety and fairness in the federal banking system both at the OCC and in his role on various regulatory panels including the Federal Deposit Insurance Corp. Board of Directors.

Before his current role, Hsu honed his expertise at the Federal Reserve, where he worked closely with Yellen during her time as chair. His work on the Large Institution Supervision Coordinating Committee, which oversees global systemically important banks, solidified his reputation as a meticulous and collaborative leader.

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Trump’s bank policy remains undefined amid flurry of orders

Article by Kyle Campbell

During his first days in office, President Donald Trump has shown a willingness to test the limitations of what can be done by executive action. What remains to be seen is whether he takes a similar tack for bank regulation.

Trump signed 48 executive orders, proclamations and memoranda within roughly 24 hours of his inauguration. These actions touched policies related to the military, trade, energy, the federal workforce and immigration — including ending birthright citizenship, a move that garnered an immediate legal challenge from nearly two dozen states. Banking, meanwhile, was left largely untouched by the new chief executive.

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Vitalii Vodolazskyi – stock.adob

How Fiserv’s new CEO shakes up succession at two firms

Article by John Adams

Fiserv has appointed PNC executive Michael Lyons to assume outgoing CEO Frank Bisignano’s role, bringing a longtime bank executive into the world of technology sales, and leaving an empty seat on the Pittsburgh-based financial institution’s talent bench.

Lyons became president and CEO-elect of Fiserv, effective Jan. 27. He reports to Bisignano until June 30, or upon Bisignano’s earlier Senate confirmation as commissioner of the Social Security Administration for the Trump administration. The move changes succession planning for PNC, which had viewed Lyons as a top candidate to eventually succeed CEO William Demchak.

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Pennsylvania community banks to merge in $214 million deal

Article by John Reosti

CNB Financial Corp. is taking on its biggest-ever acquisition, a $214 million, all-stock deal to buy in-state rival ESSA Bancorp.

The deal is expected to close in the third quarter and to create an $8 billion-asset bank. It would expand Clearfield, Pennsylvania-based CNB’s footprint east, giving the company a presence in Scranton, Allentown and suburban Philadelphia. It comes a little more than two months after the $5 billion-asset Mid Penn Bancorp agreed to pay $127 million in stock to acquire William Penn Bancorp, an $812 million-asset institution headquartered in Bristol, a Philadelphia suburb.

“We’re excited to partner with ESSA,” CNB President and CEO Michael Peduzzi said in a press release on Jan. 24. “This combination aligns two high-performing banks with an exceptional commitment to client-focused services for its customers and financial support to sustain the economic vitality of the communities in which they operate.”

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