I recently completed an exercise program called 75 Hard. I needed a reboot after 2020 and decided to jump into 2021 with both feet.
Basically, the program is 75 days of following a strict regimen: a diet, no alcohol, drinking four liters of water a day, working out twice daily for 45 minutes each (one has to be outside, regardless of the weather), taking a daily progress picture and reading 10 pages each day from a nonfiction book.
It is more about building your mental toughness than anything else.
Day one was on February 1, where it was it was 33 degrees in Illinois where I live. In the upper Midwest, we call this pre-spring. That is when you start seeing the shorts and flip-flops make an appearance. However, starting on February 5, we had an almost two-week spell when morning temperatures started in the negative numbers and rarely made it out of the single digits. Remember Ralphie’s brother Randy in A Christmas Story? That was me — only trying to exercise.
I am sure you are wondering, “What does this have to do with banking?” Remember I said the challenge is more about mental toughness than anything else. I think the next two years may require a lot of mental toughness in the banking world.
We are in a new year, with a new president and a new dynamic to the layout of the Senate and House. It almost goes without saying at this point that the banking world is going to see some tightening, and with that will come new or revamped regulations.
The Biden administration appears to be focused on consumer protection, so that means there will likely be renewed focus on areas such as CRA, fair lending and UDAAP.
What could change? While new legislation could take time — since it requires a proposed rule, review comments and final deadline — the administration could move more quickly by replacing the directors of the various regulatory agencies, who may take a more robust approach to enforcement of existing regulations.
The Biden-Sanders Unity Task Force Recommendations recently outlined its agenda over the next four years. One of its key items is a fairer economy. It proposed a new economic pact to address “decades of red-lining, rising income inequality, and predatory lending practices targeting low-income families and people of color.”
Community Reinvestment Act (CRA): President Biden has indicated that he would like to expand CRA to include fintechs and non-banks along with mortgage and insurance companies. The goal is to close loopholes that avoid lending and investing in certain communities. If that is accomplished, it may help to level the playing field.
Fair Lending: The administration wants to enforce the Fair Housing Act (FHA) and the Home Mortgage Disclosure Act (HMDA). It is also looking to reinstate the Affirmatively Furthering Fair Housing Rule, which provides its program participants with more effective means to affirmatively further the purposes and policies under FHA, Title VIII of the Civil Rights Act of 1968. The administration also wants to restore the federal government’s ability to enforce settlements against discriminatory lenders.
Unfair, Deceptive or Abusive Acts or Practices (UDAAP): With a focus on consumer protection, the administration may look to place greater scrutiny on potential unfair, deceptive or abusive processes. This became evident with the recent rescission of the January 2020 policy statement that had clarified the Bureau’s approach to citing and challenging abusive conduct in supervision and enforcement actions. With the rescission, the Bureau stated it intended to exercise its supervisory and enforcement authority consistent with the full scope of its statutory authority under Dodd-Frank.
We can help your institution develop more mental toughness and navigate change
While I ended my 75 Hard challenge, I enjoyed it so much that I planned to do it again. It was challenging, and there were days when I did not feel like doing all the tasks, but I applied some mental toughness and felt so much better each night reflecting on all I had done during the day. I took 30 days off — ate some pizza, had a beer (or two) — and then started back at it. As they say, there is no rest for the weary.
If you need an accountability partner to help you stay on track with the changes that are sure to come or to help support the mental toughness you will need for what may lie ahead, Wipfli can help make sure adapting isn’t quite so “hard.” Contact us to learn how we can assist you in navigating potential upcoming changes.