A PUBLICATION OF THE NEW JERSEY BANKERS ASSOCIATION 10 HOW A DAM SYSTEM CAN TRANSFORM COMMUNITY BANK MARKETING 22 THE POWER OF PERSONALIZATION IN CONSUMER AND BUSINESS BANKING 18 HOW TO KEEP YOUR BANK’S FINANCIAL MARKETING COMPLIANT AND EFFECTIVE NEW JERSEY BANKER MAKING CONNECTIONS ISSUE 4, 2024
CONTENTS What’s inside 10 HOW A DAM SYSTEM CAN TRANSFORM COMMUNITY BANK MARKETING DEPARTMENTS 05 CHAIR’S PLATFORM From providing advocacy and professional development to public affairs, NJBankers plays a pivotal role in continued success of our industry. 06 FROM THE NJBANKERS PRESIDENT’S OFFICE In the coming months, NJBankers will embark on a Strategic Planning process that will determine the path for the Association through 2030. 08 POLITICS AND POLICY At the New Jersey Bankers Association, our mission is to serve as leading advocates, trusted partners, and exceptional resources for our members. However, often our mission extends beyond supporting our membership. 15 WELCOME NEW ASSOCIATE MEMBERS 20 MEET SOME OF OUR ENDORSED AND SELECT PROVIDERS 26 IN THE SPOTLIGHT: MARKETING COMMITTEE ARTICLES 09 NJBankers Future Ready Internship Program is in its Second Year and is Continuing to Grow 10 How a DAM System Can Transform Community Bank Marketing 12 Chevron Doctrine Overturned 18 How to Keep Your Bank’s Financial Marketing Compliant and Effective 22 The Power of Personalization in Consumer and Business Banking 25 Q&A with a Bank CEO 30 Voluntary Benefits: Filling the Gaps Left by Medical Plans 18 HOW TO KEEP YOUR BANK’S FINANCIAL MARKETING COMPLIANT AND EFFECTIVE 22 THE POWER OF PERSONALIZATION IN CONSUMER AND BUSINESS BANKING 28 BANK SHOTS 29 BANK NOTES 31 UPCOMING EVENTS 3
NJBankers Officers Patrick L. Ryan* Chair President/CEO First Bank Michael P. Affuso, Esq.* President/CEO New Jersey Bankers Association Craig L. Montanaro* First Vice Chair President/CEO Kearny Bank Elizabeth Magennis* Second Vice Chair President ConnectOne Bank NJBankers Staff Michael P. Affuso, Esq. President/CEO [email protected] Jenn Zorn Executive Vice President/ Director of Education & Business Development [email protected] Jessica Jakobson Vice President Professional Development [email protected] John Mangini Vice President/Director of Marketing/Communications [email protected] Brittany Wheeler Vice President/Director of Government Affairs [email protected] Edward Yakely VP/Chief of Finance NJBankers/BCG [email protected] Andrea Ganzman Director of Digital Marketing & Creative [email protected] Lauren Barraza Chief of Staff [email protected] Cynthia M. Zaccaro Senior Administrative Assistant, Business & Professional Development [email protected] Diane Starr Marketing & Education Database Administrator [email protected] Bankers Cooperative Group Staff Matthew W. Cooney President/CEO [email protected] Mary Pat Boutmy Vice President and Board Secretary [email protected] Andy Slobiski Employee Benefits Consultant [email protected] Chris Corvil Client Services Analyst [email protected] Doug Holcombe Employee Benefits Consultant [email protected] Theresa Jolley Accounting Services Manager [email protected] Sarah Martorina Insurance Services Analyst [email protected] Jon Robinson Benefits Analyst [email protected] Contact New Jersey Bankers Association www.njbankers.com 411 North Avenue East Cranford, NJ 07016-2436 Phone: 908-272-8500 Email: [email protected] Counsel Mary Kay Roberts, Esq. Riker, Danzig LLP Contributing Editor John Mangini Vice President of Marketing and Communications New Jersey Bankers Association NJBankers Board of directors John M. Bonhomme* Managing Director/Regional Director JPMorgan Chase Bank N.A. John Borelli, Jr. President/CEO Newfield Bank Matthew Carcich President/CEO Freedom Bank John DeSclafani SVP/Commercial Banking Lender Wells Fargo Bank, N.A. Edward Dietzler President/CEO The Bank of Princeton Catherine Franzoni SEVP/COO Manasquan Bank Jorge S. Gomes, Esq. President/CEO Lusitania Savings Bank James A. Hughes President/CEO Unity Bank Thomas J. Kemly President/CEO Columbia Bank Steven M. Klein* Immediate Former Chair Chair/President/CEO Northfield Bank Anthony Labozzetta* President/CEO Provident Bank Kevin M. Lenihan President/COO Crown Bank Christopher D. Maher Former Chairman Chair/CEO OceanFirst Bank Martin P. Melilli Market President TD Bank, N.A. Donald Mindiak President/CEO First Commerce Bank James D. Nesci President/CEO Blue Foundry Bank Kevin B. Peterson President/CEO Haddon Savings Bank Jane E. Rey President/COO Spencer Savings Bank Robert Rey President/CEO NVE Bank Ira Robbins* Chair/CEO Valley Bank Michael A. Shriner President/CEO BCB Bank Kenneth R. Totten Chair/President/CEO United Roosevelt Savings Bank James H. Wainwright President/CEO Freehold Bank * Executive Committee 4
chair’s platform The Important Role the Association Plays in Our Industry PATRICK L. RYAN, CHAIR, PRESIDENT/CEO, FIRST BANK It is with great honor and enthusiasm that I assume the role of Chair of the New Jersey Bankers Association. I’d like to extend my thanks to Steven Klein for his work as chair, and Michael Affuso and the entire management team for their great work leading our organization. As we navigate the ever-evolving landscape of the banking industry, I am proud to do my part to help lead our association and industry toward a future of growth, innovation, and resilience. The banking sector has undergone significant transformations in recent years. Technological advancements, changing customer expectations, and regulatory shifts have reshaped the way we operate. As we embrace these changes, our mission remains steadfast: to serve our communities, foster economic development, and promote financial stability. NJBankers plays a crucial role in advocating for New Jersey banking institutions, taking a multi-pronged approach. Our advocacy efforts span government relations, public affairs, and impact litigation. ɨ Government Relations: ɦ Members of our team, led by Brittany Wheeler, actively engage in Trenton and Washington, working to make sure our voices get heard. ɦ Through hard-fought legal challenges, we now have the ability to provide financial support for key industry causes. ɨ Public Affairs: ɦ NJBankers aims to increase press coverage, emphasizing the industry’s strength and resilience. In fact, over the past twelve months, we generated 52 unique press hits, more than double what was generated in the prior period. ɦ This media coverage is further enhanced by the great work we do with various non-profit partners throughout the state, including Rutgers University, the Community FoodBank of NJ, the NJ Small Business Development Centers, and numerous veterans organizations (among many others). ɨ Impact litigation ɦ NJBankers is working hard to even the playing field by selectively partnering with organizations that are pursuing legal challenges to rulings or regulations that seem excessive or unfair. ɦ In fact, to ensure focus and support in this important area, the Board of Directors has specifically allocated funds in the current fiscal budget to ensure we can effectively pursue this strategy. This comprehensive approach underscores NJBankers’ commitment to their members. Beyond our important advocacy work, our organization will continue to emphasize professional development and networking, subsidiary organizations and third-party partnerships, and organizational efficiencies. ɨ Professional Development: ɦ Events, large and small, continue to be a hallmark of our organization. By running great events, and gathering member feedback, we will ensure we provide great support in the areas of training, development, and networking. ɨ Subsidiaries and Third-Party Partnerships: ɦ As the banking industry continues to consolidate, the nature of banking associations will change. We are actively working across various industries and geographies to make sure our organization remains effective and relevant. ɦ Our subsidiary entities, Bankers Cooperative Group and NJBankers Business Services, provide great support to our members and associate members, and they help build the financial strength of our organization. ɨ Administrative and Organizational Efficiencies: ɦ We plan to commence a strategic planning process in the fall. It has been some time since we last updated our strategic plan, and the changing industry dynamics makes this a perfect time. We will be looking for member volunteers to help with this exciting project, so please stay tuned or reach out to me or Mike to volunteer. ɦ We are exploring our space needs to make sure we have the right amount of space, in the right locations at the appropriate price. In closing, I am excited about the opportunities that lie ahead. Our association has a rich history, and we are committed to building upon that legacy. I invite each of you to actively engage, share your insights, and contribute to our collective success. Thank you for your trust and support. TECHNOLOGICAL ADVANCEMENTS, CHANGING CUSTOMER EXPECTATIONS, AND REGULATORY SHIFTS HAVE RESHAPED THE WAY WE OPERATE. AS WE EMBRACE THESE CHANGES, OUR MISSION REMAINS STEADFAST: TO SERVE OUR COMMUNITIES, FOSTER ECONOMIC DEVELOPMENT, AND PROMOTE FINANCIAL STABILITY. 5 chair’s platform
president’s office Members as Customers MICHAEL P. AFFUSO, ESQ., PRESIDENT/CEO, NJBANKERS I would like to take this opportunity to say, “thank you.” Thank you for your NJBankers membership and thank you for the confidence you’ve placed in us to be your trusted advisor, community partner and connector within the banking industry. Our goal, in all these avenues and more, is to exceed your expectations as customers—and members— of our Association. In the coming months, NJBankers will embark on a Strategic Planning process that will determine the path for the Association through 2030. As we begin this process, we will take a fresh look at our value proposition to ensure that we continue to remain relevant and vibrant. We cannot do this without your input. We will actively engage with our members throughout this process to ensure you feel heard, heeded, and supported. Our members will receive surveys and be solicited for feedback as to their needs and preferences, with the goal of ensuring we provide valuable content and resources. We have always aimed to be customer-driven and want to refocus our efforts moving forward. To that end, we will spend the Fall and Winter on our strategic plan, with the goal of submitting the final plan for Board approval in early 2025. This will tie neatly into the 2025/26 budgeting and event planning season, where you will see the manifestation of this plan in action. In addition, strategic planning will continue with our ongoing customer (member) engagement and value propositions. NJBankers will continue to lead with advocacy. Advocacy can be broken down into three disciplines which are interrelated. First, with public policy—lobbying—we will continue to be your voice in Trenton and Washington. We are proud of our past accomplishments and will continue to preserve, protect, and promote the industry to government leaders. Second is legal advocacy. As they say in the Godfather “blood costs a lot of money.” We will not be afraid to spend money on legal advocacy to ensure that our members are protected from overzealous regulations. We have done this in the past and will do so in the future. Finally, public affairs—where we help you publicly demonstrate the good you do as a bank, and the great things we do as a collective industry. We will further evolve our communication channels; you will see increased visibility on LinkedIn as well as content on other platforms such as Facebook and Instagram. We will continue our efforts to leverage traditional media and social media to demonstrate the importance of our industry. We have listened to you, our customers, and will continue to evolve our professional development offerings and presentations. We will focus all events on member value, which translates to more education, less recreation, and more chances to interact with peers. We will continue to dive deep into institutions to provide professional development for bankers of all levels through both in-person and virtual events. While we work on executing our long-term strategic plan, we will focus on some interim tactical goals. Specifically, we will: ɨ Expand public affairs efforts to create ten earned media events, where NJBankers creates an event that is media worthy, invites the media and results in a positive story. Grow the positive reputation that NJBankers currently enjoys with the state legislature. Ensure that members feel confident that their interests and our representation are maintained to the highest standards by our Director of Government Affairs. Success in this area, considering the political situation in New Jersey and the public perception of our industry, is measured by a lack of adverse industry actions and by the mitigation of negative repercussions of legislation that is enacted. ɨ Improve Communication of our Advocacy Efforts to the Board of Directors and Members: NJBankers traditionally conducts government affairs with the goal of avoiding any limelight. We will highlight our efforts through user-friendly presentations. ɨ Provide programming to better engage our Emerging Leaders with NJBankers advocacy: NJBankers will host a Trenton Advocacy Day in the Winter of 2024/25 with the goal of providing Emerging Leaders with a better understanding of state government and how advocacy works. ɨ Create a Banks are strong and secure campaign: It is critical that NJBankers be a leading voice on the strength of the industry. We will amplify our voice and messaging through social media outlets. ɨ Implement a Legal Affairs strategy: We will build on previous successes by developing cases to litigate and partner with allies to create legal change. ɨ Achieve Budget: The 2024/25 Budget contains several embedded stretch revenue goals including the revenue goals for professional development and membership. Achieving all goals in the budget year is the primary objective, despite some downward trends in attendance. ɨ Achieve Budget plan for NJBankers Business Services: Embedded in the overall budget is a goal for successfully onboarding and marketing the KeyState Solar Program. ɨ Assist in securing one net new additional bank client for Bankers Cooperative Group (BCG): Revenue growth of BCG is essential to ensuring that insurance companies seek BCG as a long-term viable entity, which in turn allows for purchasing leverage for our members and clients. ɨ Complete and follow through on new professional development programming: Specifically, the Internship Program, Mid-Career Banker training, Directors Training and Emerging Leaders; seek to grow participation and resulting revenue in all. ɨ Create additional operational efficiencies and modernization. ɨ Continue joint events: Focus on developing new opportunities such as a possible joint Federal regulatory visit and joint inter-state conferences. Facilitate Associate Member sharing on key topics. We look forward to working with you, and for you, in the year to come. 6 from the njbankers president’s office
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politics and policy A Comparative Look at Serving Constituents and Customers BRITTANY WHEELER, VICE PRESIDENT/DIRECTOR OF GOVERNMENT AFFAIRS, NJBANKERS At the New Jersey Bankers Association (NJBankers), our mission is to serve as leading advocates, trusted partners, and exceptional resources for our members. However, often our mission extends beyond supporting our membership. We also play a crucial role in assisting elected officials with issues related to their constituents, who are oftentimes customers of our member banks. This often-overlooked service highlights the intersection between our advocacy efforts and the customer service provided by banks. Our advocacy focuses on facilitating effective communication between member banks and lawmakers. We recognize that the success of our banking community depends on sound public policy and legislative support. By engaging with legislators, we ensure that the interests of the banking sector—and the well-being of our communities—are well-represented. This dual focus—advocacy and exceptional service—supports both the financial sector and our communities. Just as banks strive to understand their customers’ needs, we work to understand the concerns of constituents that impact public policy. We analyze data and personal stories to provide legislators with a clear picture of how their decisions affect both the economy and individuals. We also strive to use feedback from customers and constituents in our efforts to educate policymakers and decisionmakers. Banks anticipate customer needs to offer timely solutions; similarly, NJBankers proactively engages with lawmakers to address potential issues before they escalate. This proactive approach helps shape favorable policies and prevents challenges that could impact the industry and the public. Our role also mirrors how banks educate customers about financial products. We educate lawmakers about the implications of their decisions on the banking sector, providing clear, actionable information to support sound policymaking. Banks are dedicated to providing outstanding customer service, which is central to building lasting relationships and promoting financial well-being. During the COVID-19 pandemic, NJBankers assisted numerous elected officials with personal and constituent related concerns with respect to PPP loans, helping to save homes, businesses, and jobs, and keep New Jersey’s economy moving. During testimony early this year, NJBankers was invited by the Assembly Financial Institutions Committee, a very important legislative committee, to provide a State of the State on Banking. This testimony allowed NJBankers to successfully highlight the good work our association does in serving members of the legislature on behalf of their constituents. Unlike customers of a bank, constituents can cast votes and are very mindful of which elected official provided excellent customer service and those who did not. Resolving customer issues efficiently is a hallmark of good banking. Similarly, resolving constituent issues is a hallmark of good government. Our advocacy involves addressing policy challenges and finding solutions that benefit both the industry and the public. Trust is fundamental in both banking and advocacy—banks build trust through reliable service, while we build it through integrity and effective representation. The synergy between advocacy and customer service creates a dynamic where each reinforces the other. Our support for elected officials with constituent-related matters helps create a favorable legislative environment for the banking sector. In turn, the excellent service provided by banks ensures that customers receive the support they need, fostering financial health and community prosperity. This integrated approach underscores our commitment to both sound policies and exceptional service. By bridging the gap between elected officials and customers, NJBankers plays a pivotal role in shaping a thriving, supportive environment for both the banking sector and the communities it serves. Our ongoing focus on effective communication and relationship-building aims to contribute to a prosperous and resilient economic landscape for all. OUR ADVOCACY FOCUSES ON FACILITATING EFFECTIVE COMMUNICATION BETWEEN MEMBER BANKS AND LAWMAKERS. WE RECOGNIZE THAT THE SUCCESS OF OUR BANKING COMMUNITY DEPENDS ON SOUND PUBLIC POLICY AND LEGISLATIVE SUPPORT. BY ENGAGING WITH LEGISLATORS, WE ENSURE THAT THE INTERESTS OF THE BANKING SECTOR—AND THE WELL-BEING OF OUR COMMUNITIES—ARE WELL-REPRESENTED. 8 Politics and Policy
NJBankers Future Ready Internship Program is in its second year and is continuing to grow The interns had the opportunity to network with each other at a Top Golf Event. Designed to further enhance banks internal internship programs and motivate interns to become the next generation of leaders at member institutions, the program provides specialized educational programming and unique opportunities for college students who are interested in pursuing a career in banking. Participants of the program attended weekly webinars to learn key components of the banking industry and had the opportunity to network with one another, as well as bank CEOs and managing officers, at an in-person networking event. This summer’s program included 62 interns from 10 different banks and one Associate Member firm. 9 future ready internship program
HOW A DAM SYSTEM CAN TRANSFORM COMMUNITY BANK MARKETING NEAL REYNOLDS, PRESIDENT, BANKMARKETINGCENTER.COM Today’s bank marketers face increasing pressure to deliver timely, relevant, compliant, and engaging content. This challenge is compounded by the need to manage a tremendous volume of marketing materials securely and efficiently. And, in the world of community banks, this often means doing so with limited resources. A Digital Asset Management (DAM) system offers a solution by providing a centralized, secure, and accessible repository for marketing assets. Here are just a few ways that a DAM system can help bank marketers enhance their effectiveness and efficiency. THE COST-EFFECTIVE SOLUTION In an industry where both dollars and customers are on the line, you want to be absolutely certain that your marketing messaging is developed in a cost-efficient manner—that it is always on brand, complies with regulatory requirements and reaches the right individual in the right place at the right time. A DAM system makes it possible to store, manage, and share digital files quickly and easily. As a result, employees are no longer spending valuable time searching for assets, routing them for approval via email, or fixing mistakes. By eliminating the possibility of materials leaving your bank with outdated, inaccurate, or off-brand information, a DAM system can also reduce the chances of a costly compliance violation. CENTRALIZED ACCESS AND ORGANIZATION A DAM system functions as a centralized hub where all marketing materials—ranging from images and videos to documents and design files—can be stored, organized, and accessed by multiple users from various locations. This centralized access is a game-changer for marketers, who can now quickly find and retrieve the assets they need. The system eliminates the need for time-consuming searches across multiple platforms and mitigates the risk of 10 feature
duplication. By ensuring that all team members are using the most up-to-date and approved materials, a DAM system ensures the consistency, compliance, and cohesion of the bank’s marketing campaigns. IMPROVED SECURITY AND COMPLIANCE Security is paramount in banking, and most DAM systems are equipped with robust features to safeguard sensitive marketing materials. Of course, this capability is especially critical in a borderless workforce environment, where each “endpoint,” i.e., piece of equipment accessing the bank’s data, is vulnerable to bad actors. The Connectwise Emerging Cybersecurity Threat Trends 2024 report speaks to the potential consequences, citing an IBM survey on remote worker security: “Remote work can increase the risk of data breaches due to a lack of control and the use of personal devices. According to IBM, at least 20% of businesses have experienced data breaches caused by remote workers, and these breaches can cost $1 million more on average. It can also take 58 days longer for organizations to discover and contain breaches when remote work is common.” By leveraging the system’s controlled access and permissions functionality, banks can ensure that only authorized personnel can view, edit, or download specific assets. Furthermore, a DAM system can track and record all user activities, providing a comprehensive audit trail that is essential for compliance with regulatory requirements. This level of security not only protects the bank’s assets, but also helps maintain the trust of customers and stakeholders. STREAMLINED WORKFLOW AND PRODUCTIVITY The intuitive search and retrieval capabilities of a DAM system—coupled with its ability to automate routine tasks such as tagging, categorizing, and distributing assets—streamlines the marketing workflow. Team members can spend less time on human-in-the-loop and error-prone administrative tasks and focus more on strategic initiatives that will drive the bank’s share of wallet. This shift in focus enables marketing teams to be more efficient, more agile and prepared to respond quickly and effectively to changing market demands or shifts in internal resources. THE MARKETING AUDIT. WILL YOU BE READY? DAM systems maintain detailed audit trails, as well as versioning histories. These logs record every action taken on a document, such as edits, downloads, and shares, along with timestamps and user information. This transparency allows auditors to trace the history of each asset, verify compliance with regulatory requirements, and identify any unauthorized changes or access. CONCLUSION As the financial services industry continues to evolve in, unfortunately, unpredictable ways, a digital asset management system can play a pivotal role in helping bank marketers navigate new challenges and seize upon emerging opportunities. To sum up, a DAM system can be a critical tool in the bank marketer’s toolbox, with its ability to enhance their bank’s competitiveness, ensure regulatory compliance, attract and retain customers, secure their data, and, most importantly, drive share of wallet. By integrating a DAM system into their operations, banks can streamline their marketing efforts, reduce costs, enhance the overall effectiveness of their campaigns, and most importantly, grow their bottom line. Neal Reynolds Neal Reynolds is President of BankMarketingCenter.com. Contact Neal at [email protected]. feature
Chevron Doctrine Overturned I. SUMMARY OF OVERTURNING DECISION On June 28, 2024, the U.S. Supreme Court, in 6-3 decisions for both Loper Bright Enterprises v. Raimondo, Secretary of Commerce and Relentless, Inc. v. Department of Commerce, overturned the decades-old Chevron doctrine established in Chevron U.S.A., Inc. v. NRDC (1984). The Chevron doctrine allowed federal agencies to interpret ambiguous laws through regulation and enforcement, with courts deferring to these agencies’ expertise. Opponents argued that this was improper, and Chief Justice John Roberts, writing for the majority, stated that courts must now exercise independent judgment in determining whether an agency has acted within its statutory authority. Roberts in his 35-page ruling stresses that Chevron is “fundamentally misguided” and holds that the notion of Chevron deference conflicts directly with the Administrative Procedure Act (APA). The APA is a federal act that establishes how federal administrative agencies make rules and how they adjudicate administrative litigation. Roberts explained in his opinion that the APA explicitly directs courts to “decide legal questions by applying their own judgment” which in turn “makes clear that agency interpretations of statutes are not entitled to deference” in a similar fashion that agency interpretations of the constitutions are also not entitled to deference. This shift is expected to make it easier to challenge agency regulations and enforcement, significantly limiting the influence of agencies and their experts on the interpretation and implementation of laws. The Loper case was filed in the U.S. District Court for the District of Columbia. It was raised by a group of herring fisherman who argued that a federal regulation within a monitoring program by the Department of Commerce and National Maritime Fisheries Services was not expressly addressed in the Magnuson-Stevens Act (MSA). The requirement mandated professional fisherman to pay onboard observers to check compliance. The agency justified the mandate of federal observer wage due to the fact that the MSA grants the agency authorization to do what is “necessary and appropriate” to enforce their actions. It is important to keep in mind that Susan Aufiero-Peters SVP, General Counsel & Corporate Secretary, Northfield Bank Francine Diaz Summer Intern, Northfield Bank 12 chevron doctrine overturned
the point of contention is not whether the observers should be allowed on the respective vessels, but instead whether the financial expense is necessary and reasonable to require of the fishermen. The Loper decision does not cement that a court should never proceed with an agency’s statutory interpretation, but instead discards the previous doctrine taken from Chevron that a court should always follow an agency’s interpretation as a result of its ambiguity. On a similar note, the Relentless case involved the Department of Commerce’s regulation regarding fishing quotas in the Atlantic herring fishery. Relentless, Inc. challenged the Department’s interpretation of the MSA arguing that it imposed quota restrictions that were an overreach of agency authority. The US Supreme Court sided with Relentless, Inc., concluding that the agency’s broad interpretations were not justified by the statute which curbs the agencies’ regulatory scope and upholds the judiciary’s role when it comes to statutory interpretation. Following this summary is an analysis of the impact on banking agencies and the SEC, a background behind the Chevron doctrine, and conflicting positions from different arenas. II. IMPACT ON BANKING AGENCIES AND THE SEC As previously mentioned, the modern Chevron doctrine contributes to a climate of unpredictable and unstable regulatory landscapes. The doctrine allowed footing for authorities to pen robust and costly regulations.1 Although the fall of Chevron is expected to create a new wave of litigation against those broad regulations, it has also been dubbed a “double edged sword” for financial institutions.2 This is because it will also make it easier for advocacy groups and state attorney generals to challenge regulations, which introduces even more uncertainty to banks.3 This trend can also be seen with respect to banking lobbyists who have been opposing regulatory agencies like the Consumer Financial Protection Bureau. As a result of the overruling, the CFPB’s interpretations will face stricter scrutiny and require more justification.4 This shift will complicate regulators’ tasks and continue the trend of lower courts challenging financial regulators’ actions especially in the 5th circuit. Furthermore, the overruling of Chevron may commence a discrepancy in rulings as a result of differing interpretations of federal judges. The Securities and Exchange Commission (SEC) has been able to impose and change regulations with minimal congressional involvement in the past. The recent decision could change the trajectory and directly impact rulemaking and regulation across a myriad of industries subject to the SEC. In fact, the SEC has relied heavily on its regulatory authority to oversee and enforce securities laws. Chevron deference had limited companies’ ability to sue agencies over their interpretations, often leading to broader, costlier rules. Its end is expected to trigger increased litigation challenging such rules. Scholars believe that an immediate impact following the overruling of Chevron would be seen in pending cases that currently challenge the SEC’s rules including the SEC’s new Climate Disclosure Rule. This is because litigants may be more willing to contest agency interpretations in hopes of a more favorable judicial review. The exacerbation of regulatory uncertainty, rulemaking, and pending litigation may hinder future investments and strategic decisions.5 Moreover, authorities such as the Securities and Exchange Commission, Federal Reserve, and the Office of the Comptroller of the Currency will now need to refrain from imposing Financial Regulatory Initiative/Authority Description Basis for Potential Challenge Implications of the Ruling Basel III Endgame (interagency proposed rule) The 2023 proposed rule on regulatory capital following 2023 spring bank failures. (1) APA (2) Major Questions Doctrine (3) Nondelegation Doctrine Strengthended opposition due to lack of Chevron deference, adding to existing criticisms. Anti-money laundering & counter-terrorist financing (AML/CFT) AML/CFT programs developed through FinCEN regulations and guidance, expensive and resource-demanding. Aggressive or questionable interpretations of statutory requirements. Financial institutions may challenge AML/CFT violations in court more frequently due to the new ruling. Fed master accounts for new applicants Institutions with novel charters argue for access to master accounts under the Federal Reserve Act. Ambiguity in the Federal Reserve Act’s language concerning master accounts. Potential for revisited litigation or appeal regarding access to master accounts. National Bank corporate powers National banks’ powers as enumerated in 12 USC 24 (Seventh), broad interpretation in 1995 VALIC decision. Dependence on Chevron deference for interpretation. The recent decision suggests interpretations could be upheld through statutory interpretation, not Chevron deference. Digital Assets Classification of digital assets under the Securities Act of 1933 and pre-clearance for certain bank activities. SEC jurisdiction over digital assets and permissibility of certain activities for banks. Challenges to federal banking agencies on the grounds of permissibility of digital asset activities, tempered by supervisory powers. Impact on Ruling on Regulatory Initiatives & Authorities 1 2 3 4 5 Source: Bonici, Clark, and Elizabeth Sines. “What Banks Need to Know Post-Chevron”. Veneable LLP. 01 July 2024. https://www.venable.com/insights/publications/2024/chevron-decision/what-banks-need-to-know-post-chevron. 13 chevron doctrine overturned
broad expectations unless they can tie it to specific statutory language.6 A chart of impacts banks need to know can be found on the previous page. III. BACKGROUND The Chevron doctrine is dubbed the “bedrock of admin law.”7 This accidental landmark decision remains of high importance exemplified by: “its frequency of citation in law review articles. Chevron has been cited by 8,009 articles included in the Westlaw database.”8 The doctrine directs courts to defer to a federal agency’s interpretation of ambiguous statutory language in regards to the laws that they administer. This is under the provision that the interpretation is reasonable. The doctrine operates via a two-prong approach in which: first, courts determine whether Congress’s intent on the specific issue is clear. If the statute is clear it is held. However, if it is deemed ambiguous, the second step involves determining whether the agency’s interpretation is based on a permissible construction of the statute. If so, then the agency’s interpretation will be upheld by the court so long it is deemed reasonable. The aforementioned deference essentially acknowledges the expertise of federal agencies within their domains instead of court officials as well as ensures the consistent application of complex regulatory frameworks. This principle of judicial deference has been pivotal in allowing agencies to leverage their expertise in a wide variety of fields. U.S. Solicitor General Elizabeth B. Prelogar penned in her case brief that Chevron is entitled to stare decisis and that its overruling: “would be a convulsive shock to the legal system… all three branches of government, regulated parties, and the public have arranged their affairs for decades with Chevron as the backdrop against which Congress legislates, agencies issue rules and orders, and courts resolve disputes about those agency actions.” Jody Freeman, a leading administrative law expert and the Archibald Cox Professor at Harvard Law School echoed these concerns and its implications: “There is a chance the court will jettison Chevron altogether and declare that the courts must decide all questions relating to statutory interpretation.9 That sounds eminently sensible on its face, but simply cannot work in practice.” Further warnings have been expressed by Jim Murphy, the National Wildlife Federation’s director of legal advocacy who stresses that: “It would give judges a lot more power to write very impactful regulatory provisions where those judges really don’t have a lot of expertise…the people who are charged with protecting our public health and protecting our natural resources are not going to have the tools they need,” he said, “and it’s going to result in people getting sick, people dying, places getting polluted. It’s going to have real impact for a very long time.”10 In recent years through Supreme Court hearings this doctrine has faced increasing scrutiny and calls for it to be considered unconstitutional. These dissents have reasoned over time that it grants excessive power to administrative agencies in a fashion that inadvertently undermines the role of the judiciary and fails to keep regulatory agencies in check. The Supreme Court has grown interest in curtailing agency deference most notable in its lack of usage or mention since 2016. The substantive issue that this case brings forth is whether the court should proceed with overruling Chevron or at least work on clarifying the notion of statutory silence concerning controversial powers expressly, but narrowly granted elsewhere in the statute and the how ambiguity should not lead to automatic deference to an agency. In sum, the stakes of this upcoming ruling are high as it will get to the bottom of whether to overturn or limit/clarify the doctrine. In the Loper case the statute was silent regarding observer salary which led to the deference in question. However, the fishermen are able to succeed in their case without uprooting the doctrine by arguing that Chevron does not apply since there is no mention of observer payout in the law. It is believed that the Court is leaning to eliminating the doctrine. IV. CONFLICTING POSITIONS FROM POLITICAL AND TRADE ARENAS Brief of Amici Curiae U.S. Senators Sheldon Whitehouse, Mazie Hirono, Dianne Feinstein, and Elizabeth Warren in Support of Respondents In a brief of Amici Curiae submitted by U.S. Senators Sheldon Whitehouse, Mazie Hirono, Dianne Feinstein, and Elizabeth Warren, the senators contend that Chevron is essential as it plays a crucial role in both effective and expertbased regulation. The senators emphasize that over the past century there has been positive impacts as a result of administrative regulations which have made society healthier, safer in areas such as the workplace, food sanitation, automobile safety, and more.11 They cite that these tangible improvements should not be overshadowed by the alleged false information provided by corporate businesses funneling money into think tanks, judicial confirmations, and elections in a way to “fund” deregulation.12 The lack of robust regulation would lead to detrimental consequences to public welfare. This brief also exalts the efficiency and expertise in regulation through Chevron. The senators argue that it has allowed agencies that possess the necessary expertise and capacity to better implement Congress’s vague policy objectives. Furthermore, by referring to experts in their respective industries via deference there is increased adaptation to new developments and complexities in a fashion that is not sustainable for Congress that does not have the resources to act as a multifaceted regulatory agency. This brief defends the notion that Chevron maintains a balance of powers among the three branches, maintains effective regulation that serves public interest, and counters corporate attempts to diminish regulation for mere profit. Brief of Amicus Curiae the Chamber of Commerce of the United States of America in Support of Petitioners The brief from the U.S. Chamber of Commerce (the “Chamber”) sets forth that the Chevron doctrine has led to an overreach by the Executive Branch. They argue that Chevron was originally intended to prevent judicial overreach into the policymaking realm. However, in the case of modern administrative law the doctrine has allowed federal agencies to both create and enforce regulations without sufficient oversight of Congress and or the judiciary. They state that there has been a disruption in the balance that the Constitution delineates. The Chamber also posited that the current application of Chevron deference has resulted in a regulatory landscape where obligations and rules are changing unpredictably depending on agency interpretations. This result is concerning because businesses necessitate stable regulations to inform their investments. An economic piece that the brief highlights is the “astronomical” costs that arise due to the current regulatory framework that are inadvertently exacerbated by Chevron. Smaller businesses are cited to feel the brunt of compliance costs in comparison to larger corporations. In fact, the Chamber estimates regulatory costs to reach up to $1.9 trillion per year.13 The Chamber asserts that Congress should clearly define legal responsibilities via legislation instead of delegating authority to other agencies. Ultimately, the Chamber advocates for the overruling and/or clarification of the statutory silence on controversial powers in a way that does not automatically imply deference to agencies. The brief ends with the assertion that the Supreme Court should alter the current system to allow businesses to operate with greater certainty and fewer burdens imposed by the unpredictability of the regulatory environment. THE CHEVRON DOCTRINE ALLOWED FEDERAL AGENCIES TO INTERPRET AMBIGUOUS LAWS THROUGH REGULATION AND ENFORCEMENT, WITH COURTS DEFERRING TO THESE AGENCIES’ EXPERTISE. OPPONENTS ARGUED THAT THIS WAS IMPROPER, AND CHIEF JUSTICE JOHN ROBERTS, WRITING FOR THE MAJORITY, STATED THAT COURTS MUST NOW EXERCISE INDEPENDENT JUDGMENT IN DETERMINING WHETHER AN AGENCY HAS ACTED WITHIN ITS STATUTORY AUTHORITY. 14 chevron doctrine overturned
RESOURCES 1. “Supreme Court Ends Chevron Deference in Landmark Decision.” American Banker, 28 June 2024, www.americanbanker.com/news/ supreme-court-ends-chevron-deference-inlandmark-decision. 2. Id. 3. Id. 4. Cowley, Stacy, and Emily Flitter. “Banks Stand to Benefit from the Supreme Court Decision on the Chevron Doctrine.” The New York Times, 28 June 2024, https://www. nytimes.com/2024/06/28/us/politics/bankslobbyists-chevron.html. 5. “Supreme Court Ends Chevron Deference in Landmark Decision.” American Banker, 28 June 2024, www.americanbanker.com/news/ supreme-court-ends-chevron-deference-inlandmark-decision. 6. Engler, Henry. “US Financial Regulators, Banks, Industry Groups Remain Cautious on Supreme Court’s ‘Chevron’ Deference Ruling.” Thomson Reuters Institute, 15 July 2024, www.thomsonreuters. com/en-us/posts/government/ supreme-court-chevron-deference/. 7. Howe, Amy. “Supreme Court to hear major case on power of federal agencies.” Scotus Blog, 16 January 2024, https://www. scotusblog.com/2024/01/supreme-courtto-hear-major-case-on-power-of-federalagencies/. 8. Merrill, Thomas. The Story of Chevron: The Making of an Accidental Landmark, 66 ADMIN. L. REV. 253 (2014). Available at: https://scholarship.law.columbia.edu/ faculty_scholarship/345 9. Pazzanese, Christina. ‘Chevron deference’ faces existential test. The Harvard Gazette. 16 January 2024, https://news. harvard.edu/gazette/story/2024/01/ chevron-deference-faces-existential-test/. 10. Potter, Suzzanne. “Supreme Court weighs case that can weaken environmental protections.” Public News Service. 2024. https://www.msn.com/en-us/news/us/ supreme-court-weighs-case-that-couldweaken-environmental-protections/ ar-BB1odTKj?ocid=BingNewsSearch. 11. Brief amicus curiae U.S. Senators Sheldon Whitehouse, Mazie Hirono, Dianne Feinstein, and Elizabeth Warren, p. 9, Loper Bright Enterprises vs. Raimondo, No. 22-451. ADLUMIN, INC. Adlumin is a banking-focused security operations platform that helps banks of all sizes detect, respond to, and prioritize cyber threats in real time. Contact: Jeff Miller, Channel Account Manager [email protected] welcome new associate member NJBankers would like to welcome the newest Associate Member to the Association 12. Brief amicus curiae U.S. Senators Sheldon Whitehouse, Mazie Hirono, Dianne Feinstein, and Elizabeth Warren, p. 8, Loper Bright Enterprises vs. Raimondo, No. 22-451. 13. Brief amicus curiae of Chamber of Commerce of the United States of America, p. 8, Loper Bright Enterprises vs. Raimondo, No. 22-451. 15 chevron doctrine overturned
How to Keep Your Bank’s Financial Marketing Compliant and Effective BY JULIA WILD, DIRECTOR OF STRATEGIC PARTNERS, FINTEL CONNECT 18 feature
With the rise of digital channels in bank marketing, the pressure to keep marketing compliant becomes even greater. Marketing compliance isn’t just about avoiding fines—it’s about building and maintaining customer trust. Whether you are a bank directly marketing your products online or a sponsor bank offering Banking-as-a-Service (BaaS) solutions to fintech partners, it is imperative to protect your reputation and ensure long-term success. COMMON COMPLIANCE PITFALLS Imagine you’re the head of marketing at a small but rapidly growing bank. You’ve just launched a new digital campaign, confident that it will attract a wave of new customers. But then, you receive a call from the regulators. They’ve flagged one of your recent advertisements promoting a “free checking account.” The issue? The fine print about associated fees wasn’t clear enough. For regulators, this could be interpreted as misleading and not protecting the consumer’s interests. And for financial institutions, consumer trust is everything. Losing trust due to non-compliant marketing is difficult to recover from, making it crucial for banks to prioritize compliance as part of their overall strategy. Here are three common pitfalls in marketing compliance and how they typically unfold: 1. Misleading Advertising: One of the earliest and most frequent issues is the use of misleading or unclear language. It’s an easy trap to fall into. You want to attract attention, so you use phrases like “free checking account.” But without clear disclosures, customers may feel misled, and that’s when the regulators step in. Transparency isn’t just a good practice— it’s a requirement. 2. Lack of Transparency: As your marketing campaigns evolve, so do the complexities of your offerings. But if you’re not meticulous about clearly communicating all terms and conditions, including interest rates and fees, you could find yourself under the regulatory microscope. What started as a small oversight can quickly snowball into a significant issue. 3. Inconsistent Monitoring: Over time, marketing materials can become outdated or unchecked. Now, picture this: a blog post from 2022 is still live on your partner’s website, but new regulations implemented in 2023 make the content non-compliant. Without regular monitoring, such discrepancies can slip through the cracks, creating compliance risks that are easily overlooked. BEST PRACTICES FOR STAYING COMPLIANT To help you navigate these challenges, we’ve put together a short step-by-step approach to keeping your marketing efforts compliant: 1. Set Clear Compliance Policies: Start by developing comprehensive compliance policies that everyone in your bank understands. These policies should clearly outline all marketing requirements, ensuring there’s no ambiguity about what’s expected. Julia Wild is the Director of Strategic Partners at Fintel Connect, a leading partner marketing platform, network, compliance tool and agency for financial institutions. Fintel Connect proudly serves 80+ leading financial brands and is an NJBankers endorsed provider. Julia Wild 2. Invest in Training: Regularly train your marketing teams on the latest regulations and best practices. Continuous education fosters a culture of compliance where everyone is aware of the rules and their importance. 3. Automate Compliance Monitoring: As your marketing efforts grow, consider using tools to automate the monitoring process. We found this is one of the most time-intensive components of compliance, which is what motivated us to build our Fintel Check tool to help automate these functions for our team and our clients. 4. Regular Audits and Reviews: Schedule periodic audits of your marketing materials to identify and address potential compliance issues before they escalate. Regular reviews help ensure that all content remains up to date with current regulations. Tip: Have a way to capture and store records of these campaigns to make audits that much easier. 5. Plan for Scalability: As your institution grows, so will the volume of your marketing materials. Ensure that your compliance processes can scale accordingly. And this doesn’t always mean growing your headcount. WRAPPING UP: COMPLIANCE AS A GROWTH ENABLER It may seem counterintuitive, but a thorough approach to compliance can actually be the key to scaling your digital marketing efforts safely. Marketing compliance is more than just a regulatory requirement—it’s a key element of building a trustworthy and sustainable brand. By setting clear policies, investing in training, automating compliance monitoring, and conducting regular audits, you can ensure that your marketing efforts are both compliant and effective in driving growth. 19 feature
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