TUESDAY SEPTEMBER 1, 2020 VOL. 185 No. 169 AMERICANBANKER.COM Follow us on Twitter @AmerBanker WesBanco in West Virginia 5 closing 20 branches Fast decline The company said migration to digital channels spurred its decision to shutter Washington Federal had consistently reported profits, locations across five states. Page 5 but then examiners uncovered froud See story on page 4 Stepping up: How pandemic 6 response boosted October 2017: OCC finds reporting irregularities ahead banks’ reputations of an exam Buoyed by its efforts to help consumers and businesses weather the pandemic, the banking industry saw its reputation improve Nov. 28: OCC tipped off to “mojor froud” involving $68M for the first time in several years. Our annual in loans survey offers some insight on how to keep the goodwill flowing. Page 6 Dec. 3: John Gembara, the bank’s president, commits Student borrower suicide 7 protection bill on verge of passage in California Dec. 5: OCC directs bank to recognize first of $62M in The legislation, which would apply to both loan looses banks and nonbanks, would give borrowers the right to sue for damages when servicing violations occur. Page 8 Dec. 15: Washington Federal fails Hanover Bancorp making Sources: Treasury Department and published reports 8 bigger push into New York with Savoy acquisition The company will use Savoy’s midtown Manhattan office to coordinate business Four bankers of failed thrift development efforts around the city. Page 9 dailybriefing 3 charged with helping client embezzle funds Chase launches its first Are public-private partnerships The Justice Department alleges that the 9 Mastercard-branded consumer 1 the future of postal banking? bankers worked with “higher-ranking bank credit card in 5 years Bankers have long opposed the idea of officials” at Washington Federal Bank for Visa and JPMorgan Chase & Co. are in the the U.S. Postal Service taking deposits and Savings in Chicago to falsify records and middle of a 10-year merchant services making loans directly, but some in the hide funds before the bank’s December 2017 agreement that gives Chase merchants industry are open to the idea of letting banks collapse. (See chart above.) Page 4 certain advantages with the expected goal and credit unions offer services at post of favoring Visa card volume. But it’s not an offices. Page 2 Heartland discloses exclusive arrangement. Page 9 4 delayed closing for The community banker AimBank acquisition Colo. ‘true lender’ settlement 2 at the center of the The Iowa company said the coronavirus 10 is path forward for bank- mail-in voting fracas outbreak and litigation against AimBank fintech partnerships Mike Duncan had kept a low profile as will postpone the deal’s completion by a few The agreement between Colorado chairman of the U.S. Postal Service’s board months. Page 5 authorities, marketplace lenders and banks of governors until it hired Louis DeJoy as offers a way to structure partnerships postmaster general. Now he is sharing an without triggering the wrath of state unwanted spotlight with the embattled regulators, Peter Weinstock, Marysia DeJoy. Page 3 Laskowski and Eric Flynn write in BankThink. Page 10 TUESDAY SEPTEMBER 1, 2020 AMERICANBANKER.COM PAGE 2 partnering with financial institutions. investigation into the discussions. CONSUMER BANKING “If the postal service were to come up with “Any exclusive arrangement, negotiated a fair and equitable and transparent process, behind closed doors, to allow a profit-driven competitive bid, whatever we typically expect entity to leverage the USPS branch network Are public- our government agencies to do to procure is a formula for corruption and should be a services, if they were to go through a process serious concern to all Americans who care private like that in that manner, then I think it would about the integrity of our public institutions,” make sense,” Gwaltney said. “Particularly ICBA President and CEO Rebeca Romero for communities where there is not a bank Rainey wrote to Taub. partnerships branch and there needs to be access to The spokesperson for JPMorgan said that services, the post office makes sense.” “there was never any discussion about an the future The comments from industry‘exclusive partnership’ for banking services” representatives follow the report last week by between the USPS and the bank. Capitol Forum, citing anonymous sources, But industry representatives are not of postal that said JPMorgan Chase and the USPS may opposed to the idea of public-private deals have even discussed some type of exclusivity between the USPS and smaller financial banking? arrangment for the bank to provide banking institutions. services to postal employees. Ryan Donovan, chief advocacy officer By Neil Haggerty But the JPMorgan Chase spokesperson at the Credit Union National Association, August 28, 2020 denied that the parties discussed exclusivity said that the post office should consider WASHINGTON — For years, bankers have and said the talks had focused on leasing partnering with local community banks opposed attempts by Democratic lawmakers space for ATMs. or credit unions, rather than a Wall Street to enable the U.S. Postal Service to provide “Our Real Estate group regularly megabank like JPMorgan Chase. financial services, arguing that the struggling explores a variety of locations for ATMs “It certainly begs the question of how did government agency is not equipped to for the convenience of our customers,” the Wall Street giant get in the room with handle such an undertaking. the spokesperson said. “We had very early the postal service on this and why wouldn’t But the industry’s position appears to conversations with the Postal Service about the postal service want to partner with local soften on the topic of banking services being what it might look like to lease unused providers to provide the services?” Donovan offered at USPS sites through partnerships exterior space for a small handful of ATMs.” said. “In most communities, I think the postal with financial institutions. But the revelation of those talks ruffled service would find a willing provider in a local Some industry observers said bankers some feathers among community bankers financial services provider.” may be more open to the partnership idea concerned about the idea of a large bank Still, some in the banking industry think following a report that JPMorgan Chase had potentially negotiating a deal with such a the USPS should stay out of the financial been in discussions with the agency before large national organization as the USPS. services sphere entirely, including partnering the coronavirus pandemic to offer ATMs The news prompted the Independent with private banks. and other banking services at post office Community Bankers of America to write McCall Wilson, president and chief locations. a letter to Postal Regulatory Commission executive of the $660 million-asset Bank of “We are not fans at all of the postal service Chair Robert Taub on Aug. 24, calling for an Fayette County in Tennessee, said he would getting into core banking functions,” said Rick Clayburgh, president and CEO of the North Dakota Bankers Association. “I think their Established 1836 One State Street Plaza, 27th floor, New York, NY 10004 focus should be on what their core delivery is Phone 212-803-8200 AmericanBanker.com and their core business model. The concept of having the post office serve as a potential Editor in Chief Alan Kline 571.403.3846 Copy Editor Neil Cassidy 212.803.8440 spot for an ATM machine or even leasing out Managing Editor Dean Anason 770.621.9935 space isn’t necessarily a bad idea.” Reporters/Producers It is still unclear if any talks between Executive Editor Bonnie McGeer 212.803.8430 Laura Alix 860.836.5431, Kate Berry 562.434.5432 JPMorgan Chase and the USPS will advance. Washington Bureau Chief Joe Adler 571.403.3832 A bank spokesperson said the pre-pandemic Executive Editor, Technology Miriam Cross 571.403.3834 “conversations never materialized, and Penny Crosman 212.803.8673 Jim Dobbs 605.310.7780 there are no imminent plans to continue the BankThink Editor Rachel Witkowski 571.403.3857 conversation or move forward.” John Heltman 571.403.3847, Allissa Kline 716.243.2679 Community Banking Editor Paul Davis 336.852.9496 But Peter Gwaltney, president and CEO Hannah Lang 571.403.3855 of the North Carolina Bankers Association, Contributing Editor Daniel Wolfe 212.803.8397 John Reosti 571.403.3864, Gary Siegel 212.803.1560 said the USPS should even allow other Digital Managing Editor banks to make bids to lease space at post Christopher Wood 212.803.8437 Jackie Stewart 571.403.3852, Kevin Wack 626.486.2341 office locations if the agency is interested in For up to date and complete coverage go to AmericanBanker.com TUESDAY SEPTEMBER 1, 2020 AMERICANBANKER.COM PAGE 3 still be concerned with the USPS partnering profitability of a community. And over the 2020 presidential election. with local banks. last 10 years, most bank closures have been Duncan, chairman and CEO of the “It would be a logistical nightmare to try in lower- and middle-income communities.” $149 million-asset Inez Deposit Bank in and make that work, to manage that model, But financial institutions say a better Inez, Ky., had kept a relatively low profile I think would almost be impossible,” Wilson approach would be reform the regulatory despite close ties to Sen. Mitch McConnell said. “I think you have to be very careful when framework that they say inhibits their ability and a two-year tenure as chairman of the you take the government and start partnering to serve underbanked consumers. Republican National Committee. with the government.” “There’s changes that can be made in That is no longer the case. Meanwhile, Democratic lawmakers law and regulation that could make it easier Duncan, chairman of the U.S.