Newly Elected ABA Chair Julie Thurlow and the "Intersection of Relevancy"

In episode 13, newly elected American Bankers Association (ABA) chair Julie Thurlow joins the show.

Julie, Vin, Zach, and Frank Farone discuss what she hopes to accomplish with the ABA, key opportunities and threats for the industry, and how she saved Frank when they were in Nashville at the ABA Annual Conference.

Julie also appeared on season 1 episode 7, where the four dove into her background and tenure leading Reading Cooperative Bank.

For more insights and ideas, visit DCG at DarlingConsulting.com or follow us on LinkedIn.

Transcript

On the Balance Sheet:  S2 E13:  Special Episode, Newly Elected ABA Chair, Julie Thurlow, and the Intersection of Relevancy

Transcript

[Julie Thurlow, 00:03]

Why would I spend a boatload of my time in DC and talking to bankers around the country? Because I'm really not that in love with myself, is that I really feel like right now there is this intersection of relevancy when you have all these regulations that are just piling on at the same time as interest rates are out of control and margins are squeezed, and then you have the tech challenge, right? I mean, we could have to lose the battle.

[Vinny, 00:32]

Welcome to On the Balance Sheet Season 2, Episode 13.  Today is a really unique episode for us because it is our first two-time guest, Julie Thurlow, President and CEO of Reading Cooperative Bank of Reading, Massachusetts. Now we have already spoken with Julie regarding kind of her initiatives and her leadership and stewardship of running a cooperative Bank - that would be Season 1, Episode 7, but today we'll be more focused on really kind of exciting news for Julie and us as well. Julie is now the newly elected Chair of the American Bankers Association, and we're gonna’ have a great conversation with her regarding kind of her role and that really in Washington as we move forward. Right, Zack?

[Zach, 01:12]

Exactly. Then, today's focus is going to be a little bit different in the sense, like you mentioned, less background of Julie, a lot more what the ABA is looking at in terms of challenges in the industry, advocacy that they're excited about or that they're trying to work on for the Community banking, or the banking industry at large, opportunities.  We're going to have Frank Farone in the house from DCG, as well. So, we, and Julie’s great, Julie's the best. She's always a fun guest to have on the show. So, I'm really excited to get the four of us here and see how the interview goes.

[Vinny, 01:44]

Absolutely.  Without further ado, Julie Thurlow, Reading Cooperative Bank.

[Zach, 01:48]

Welcome to On the Balance Sheet. We are joined today - are rejoined today - by Julie Thurlow, the President and CEO of Reading Cooperative Bank. We have the newly-elected Chair of the American Bankers Association, and also our first two-time guest on On the Balance Sheet, Julie. So, we won't ask you to rank those three things of what's the most pivotal in your career, but I think we're really happy to have you. We’ve got Frank Farone in the studio, as well, and Vinny.  How are you doing today, Julie?

[Julie, 02:16]

I'm doing great, and I'm actually flattered. I didn't know I was the first second.

[Zach, 02:20]

You are. That's it. So, we're and, today we really just want to get into, obviously, a pretty big accomplishment to be named the Chair of the American Bankers Association. So, and that happened, I think was it October? Is that when it was announced?

So, would you mind just telling our listeners kind of how that came about, how you've gotten involved in ABA and that we definitely want to talk a bunch about your platform, the initiatives you have going, as well.

[Julie, 02:47]

Wow. That's a that's a big long question. So how did I first get involved with the American Bankers Association? I actually was first involved with the Americas Community Bankers, National School of Banking in Connecticut, at Fairfield University. And that was the first foray. Then we had the financial crisis in 2007 to 8 and really felt like small community banks weren't getting a shake and was given the opportunity to serve on a Council that prepared some type of principles. Just pushing back against the Dodd Frank Act. And then more things had to be pushed back against. And there are more bad ideas that were promulgated and just the opportunity I think is really important for banks, particularly banks of our size, to make sure that their voice is heard. A lot of times the conversation is around the largest banks and what they're doing, and in fact that's what consumers hear. So, if we don't actually shout about what we're doing and why we matter and what the implications are of policy actions and decisions that are made in Washington, then we could actually face irrelevancy. And I think that's fast forward how I got involved. I was asked to join different councils, the Government Relations Council, the membership Council, the core platforms committee, evaluating and considering the relationships with banks, with their cores. And through that period of time, I got to know lots of banks, all kinds of shapes and sizes across the country and more and more involved. And then I was asked to consider whether or not I would put my name in for that chair position.  Had a conversation with the board, wasn't really sold on it. And the board was adamant that we have a story to tell, and the opportunity would be a great one, so here I am.

[Zach, 04:23]

That's terrific and we're lucky to have you, you know, kind of leaving that, that Board. And there was a, we can get more into, Julie, some of the specific initiatives, but there was one quote that I saw where you said one of my priorities will be to make sure that we're doing all we can to expand access to banking across the country because everyone deserves the many benefits that come with the bank relationship. Can you explain more about, you know, kind of your passion there and what you're thinking about from that perspective as Chair?

[Julie, 04:50]

Sure. And I think that's more of a personal journey that we at Reading Cooperative Bank have been on.  Identifying where the need in our market was as a Cooperative Bank, we were actually created to solve for a problem in the 1800s when people had didn't have, working, people didn't have access to home mortgage loans - so fast forward to today. What/where are the challenges, and when you're in middle class communities there doesn’t appear on the surface to be very many challenges, but when we explored the situation, we did identify that there were check cashers on a lot of corners in a lot of our cities, and so we sought to solve that. And in that exercise, having focus groups with people on the ground finding out why they chose not to bank and they chose instead to pay 5% of their paycheck for fees and then pay again to pay a bill for cash, and then pay again if they wanted to transfer money. The reason why they did that was because they didn't understand our monetary system and how payments process, and so we've sought to build those relationships back. Not everybody has a parent who can actually provide them with the best financial advice and so some people actually find themselves in the banking arena with their hands tied behind their backs. So, if we can actually figure out a way to make products and accounts and services that are understandable that help people bank better, then we're the people that are going to be able to do it. And it also means if we do that, that means more, more people are in the banking system, there are more customers, more checking accounts, more savings accounts, and more people buying homes, because you can't buy a home until you have a checking account first.

[Zach, 06:21]

No, and I think that's a real issue and a real need. And I mean is that one of the big - and there's plenty of challenges certainly in the industry, Julie - and outside of just the stuff that I know Frank talks with you about in terms of the ALCO side, but what, you know, access is a challenge – are the other challenges that you see? You know, whether it's in your role as the Presidency of Reading Cooperative Bank or whether it's just, and you're talking with your peers in the ABA about what you're trying to get more of a light on, for like a lack of a better way to put it. 

[Julie, 06:51]

So, the American Bankers Association represents banks of all sizes across the country. Lots of different charters, lots of different ownership structures. You have to see that; I'm sure you see banks that are owned by a family, banks that are are publicly traded, mutual banks. We all have the same rules, but we operate just a little differently because of the value system that we're built upon. And so, I think the fairness of the system is what's important to me and the relevancy of the Community banking model, the relevant, the fact or the ability for a mutual to remain relevant. So, you have all of the regulations, you actually, just look at what's happened in this last year between 1071, CRA, what else? Capital rules. Some new information about Federal Home Loan bank borrowing, the problems that SVB, Signature and First Republic, interest rates soaring very quickly. You have strangling margins. You have all of this stuff happening at the same time, and that's not even addressing the technology challenges, which were evident at Signature where money moves a lot faster now, and technology moves money overnight to the point that maintaining and understanding what your liquidity position is can be a lot more tenuous than it had been in the past when you actually had paper walking from office to office moving the money. So, I think making sure that all banks depending on, regardless of their charter, have the ability to understand their regulations and apply them and understand that they're going to put them out of business.

[Vinny, 08:10]

Julie, thanks so much for that. Vinny here again, and thanks so much for being our, I guess our first ever you know, two-time guest and that we're absolutely thrilled to have you.

One of my first questions to you would be, can we take a step back and help me understand your involvement with the ABA and how that looks day-to-day, month-to-month, year-to-year. How many meetings are there? Who are you meeting with - how does that work? Obviously, a lot of time down in Washington, and you had shared with us that you're going to be spending a lot of time there because there's you're clearly passionate about something you've already said, which was the intersection of relevancy. But how does it, how does it work?  Like, what is your responsibility on a day-to-day, week-to-week, or month-to-month, year-to year-basis? What does the actual engagement look like if you will?

[Julie, 08:54]

Well, you know what? I don't know. So, every Chair is different depending on where they come from. So, Dan Rob was the outgoing Chair, small bank in Missouri. Prior to him was the President of Zions Bank. So, again, two very different organizations, and also different environments that you're leading under so, priorities.  As far as governance, so we have every two weeks, we have officer meetings once every two months, we have executive committee meetings on a quarterly basis. We have board meetings, plus we have a leadership meeting in the summer that we talk about the platforms and what's happening. But again, you never know what's actually going to come down. Nobody knew that the CR rates were going to drop until a couple of days before they dropped, and there was still some, you know, some discussion about that not being until January. So, a lot of it depends on where you are. Did we actually see the margin pressure that it has now all of a sudden, you know, come on to the scene when a year and a half ago we didn't know that a year ago we didn't, I don't think, understand how much of pressure we would actually experience so quickly. But for SVB and waking up the sleeping giant of savings accounts and people demanding, people, everyone demanding higher yields on all of their savings accounts with us. So there, and half of it is responding to what is actually showing up on the landscape, and the other side of it is understanding what's important for banks. Sometimes legislation. Well, actually, I should back up and answer the question from a regulatory standpoint or from a congressional standpoint, not much is happening on the hill. There might be a couple wins, like small wins, like the Acre legislation that would help actually all banks that are in rural areas, and then there's the what is the pot legislation? I know I'm not supposed to call it that. I just did, didn't I? So, there are small ones, but beyond that, I don't actually see that Congress will do much just because it's so divided. But the regulators seem to think that they can do whatever they want because nobody's paying attention, and nobody's pushing back. So. And you have the CFPB writing regulations, manufacturing regulations, that they don't even have the authority to do. So, if it weren’t for associations pushing back on that, they're overstepping their authority, we could see an acceleration in that space. And I think that's why ABA has taken the extraordinary step of suing the CFPB.

[Vinny, 11:10]

Right, right. No. And that's definitely obviously noteworthy, but it sounds like it's, just to kind of paraphrase, it's the role evolves, right? Like no one saw Silicon Valley Bank and then next thing you know, I'm sure at that point, in time every, we were working around the clock through a weekend and so forth. I mean, not everyone saw margin compression. My colleague here, Frank Farone has been talking about it forever, but he's got a crystal ball. So, we'll let him be. I actually have another follow up question. Something I think that's really kind of important, maybe somebody like myself, I'm in my mid 40s, and I continue to see consolidation in the industry. Obviously, consolidation has slowed down. There has not been a lot of it in Q1, and Q2 - Q3 it started to perk a little bit, starting to see more deals done. I think about the other side of that equation and it's De Novo formation, and I'm just curious, like, do you have any perspectives? Is there any talk internally at the ABA on things we can do to, I guess, incentivize (if that's even a word) De Novo formation? I mean it's if you have capital, it seems like it's a time where. Geez, I'm not so sure if I want to build a bank from scratch. What are your thoughts on that? What do you think can be done in your role? Or you know just, I guess, just generically, to kind of help little folks kind of start building banks?

[Julie, 12:27]

I would actually push back and say, why would somebody start a bank right now. 

[Vinny, 12:33]

Right. No, that's kind of what I said - if I had capital, I don't know if I would, but that sounds like how do we go about?  Yeah.

[Julie, 12:36]

You put me on the spot, there.  I don’t get to ask questions, but I get to answer them.  But, I mean, why would someone start a bank right now?  I mean, the returns are not there. The regulatory pressures are there. Why wouldn't you start a Fintech and compete against the bank and just make it easier for consumers to move money to you and then sell it back to them? What the hell? As far as consolidation is concerned, I think you're gonna’ see more of it. The reason why you haven't seen consolidation right now is because the numbers can't work with the inverted yield curve, they will not work, and you'll erode all of your capital through the goodwill or lack thereof. And so, yeah, who wants to mark their balance sheets going once, twice, actually. Now, if you would just open up your books and show us who actually has a positive number, then maybe you could actually put candidates together to help each other. And so. But I think on the other side of this, with the CRA regulations, I don't know, I know you guys are focused on, you know, Deposits 360, liquidity, asset liability management. But I think when community banks get a sense of what the new CRA rules are and the fact that right inside the 1,500 pages, it specifically states that over 40% of banks will actually be downgraded to an unsatisfactory or needs improvement just based on the current writing and that's based on their performance now. So, they have the HMDA data. So, take the HMDA data, apply the new rules, and 50% of banks are going to fail CRA. So, then what’re we gonna’ do? They can actually make the effort to figure out how to get out into the market and meet the needs of a consumer that they don't understand today, or they can march pretty easy.

[Frank, 14:14]

Yeah, years ago, yeah. All you had to do was make an effort - show that you were making an effort and you got through your CRA exam. Now it's got to be demonstrable. You actually have to do things in the community to meet the CRA regulations. And given the environment, given the housing cost, given the interest rate, that's a big challenge unless you have some of those programs through the Federal Loan Bank that you can use to assist you, but other than that - very challenging because the numbers just don't seem to work.

[Julie, 14:43]

Well, and especially if you are, I think the regulators understate the implications for the small banks; they're actually pointing to the over $600 million banks that are going to be challenged by the new regs, but in fact for the under 600 million, let me see if I can use this mathematical example and not mess it up. So, the under 600 million will be held to the mortgage tests, which basically is as an example to simplify if there are 400 loans that are written in your market and there are 40 banks, then each of you have to get 10 to pass. If one bank gets 12 low to moderate income loans, and you only get 8, you will not pass, and it is a do not pass go. Do not collect $200, you just - so previously you could not pass, but you could demonstrate that you had, as you mentioned, had made an effort to do for some homework or seminars. Get out in the community, to outreach to low to moderate income applicants so the loans happens to go down the street instead of walking into your door, and there's nothing you can do about it, you just won't pass.

[Vinny, 15:4]

That's sobering.

[Julie, 15:53]

Well, that was depressing. Can we talk about something else? Where are interest rates going?

[Zach, 15:58]

But those are real issues, Julie, I think, for some folks probably aren't nearly as aware as you are with these, and I know we talked a bit before, you know, we got on about the Home Loan Bank and some of the recent comments there about, you know, the lender of last resort. So, it just seems like a lot of what you're doing at the ABA and the advocacy side is playing a lot of defense. Right. Trying to play some defense here and make sure that, like you said, the relevancy of the model, that the Community bank can stay in, and you need some bigger players like the ABA to help facilitate that.

[Julie, 16:30]

Well, and the other thing that I will say is that because of our involvement with the ABA and not just myself, but our CFO or Chief Banking Officer or Compliance Officer, there are a lot more people that are involved and they’re listening and, you know, going to the webinars, etcetera and understanding what the changes are. And so, a lot of the stuff that we did around overdraft protection, getting rid of the $35 per item charge, opening the branch in Lawrence, a Spanish speaking branch. So, a lot of those things were because we could read the tea leaves because we were actually at the table. If you're not at the table, then you don't hear the nuances and how the tones at the top at the regulatory agencies are changing. If you don't hear that, then you can't take the steps beforehand. Unfortunately, by the time they write the rules, you have 18 months to comply. You can't write strategy or pivot your strategy that quickly. So, I think bankers just need to be attuned more to what's happening in Washington and recognizing that the implications for their model are significant. But let's talk about what it is? Sandra Thompson?

[Zach, 17:30]

Yeah, so.

[Julie, 17:31]

She's a breath of fresh air, huh? She calls it like she sees it.

[Zach, 17:33]

What are your thoughts there, Julie?

[Julie, 17:36]

So, I was actually pretty impressed with her comment that the Federal Home Loan Bank system is not the lender of last resort and get your signature cards ready, folks or make sure you have your docs in order because the lender of last resort is the Federal Reserve and the Federal Home Loan Bank’s role is to provide liquidity to the system and to support housing. And when you actually look at the Federal Home Loan Bank system, they're very - the origin of the system itself. It was when balance sheets were really a mess when you did have a buying a home the cost of homeownership had gotten out of control because banks couldn't finance long assets after the depression. And so, you ended up with a hot, tight housing market. And so, the Federal Home Loan system was created to allow for banks to have a mismatch in their assets and their liabilities. And then you guys come around and you're like, let's get it a little closer.

[Frank, 18:24]

1932. That's when it was created. FDIC 1933. And to promote housing, and then after the financial crisis, the number of Members, all the captive members, the S&L's, they were, the numbers were dwindling, in which case in ‘89 they allowed commercial banks and Credit Unions and insurance companies to join. To keep it going. So, it really has been an important - they do play a very important role in the housing in America, and I think very few folks that criticize the Federal Home Loan Bank system truly understand the role that they play and they're always poking holes. But, you know, we've seen this for the last 50 years in terms of revamping the Home Loan Bank system, consolidating, get rid of it. But I think you’d see a dramatic, dramatic change in in the housing market, the cost of housing, the cost of debt, the cost of liquidity without the Federal Home Loan Bank system. So, I think it's going to be here for a long, long, long, long time, maybe not in its present form, but in a very similar form, maybe a little bit more dedication to home ownership. Some of the requirements, maybe some more of the profits will be distributed in the form of affordable housing. But I don't think you're going to see a dramatic change in the system itself anytime soon.

[Julie, 19:56]

So, think about that. When the FHFA first started their listening tour and then the pundits and the editorial started criticizing the Federal Home Loan Bank system because banks borrowings were down. And what happens? All of a sudden, you have a crisis. The money runs out of the system and, all of a sudden, banks are borrowing again - in a borrowing position. But that's the only way that credit would have flowed during that period of time, otherwise it would have stopped and we would have a recession.

[Frank, 20:23]

Or depression.

[Julie, 20:25]

Yep, the correction would have happened earlier.

[Vinny, 20:2]

Yeah, it's interesting. I’m here at DCG for a long time, you know, way prior to, you know me getting here, but we've always, you know, thought that the Federal Home Loan Bank is pretty much the central figure in the way that banks should approach measuring and managing liquidity. I mean even, you know, more so now you still hear bankers talking about loan and deposit ratio and while that can be obviously important, the investment community, people want to see that. But at the same time, like Silicon Valley Bank’s loan deposit ratio, I don't know, something like 30%, right? So, it's like it's not, you're not some source of strength because you've got a, you know, a low loan-to-deposit ratio, whereas, you know, like Julie just alluded to when you have the Federal Home Loan Bank that you've got a borrowing in Advances with them, that it doesn't just go away. They can't, can't just come in and say, Julie, can I have my, you know, I have my deposit back, it doesn't happen, and I just hope, for the community banking industry, I hope that it remains a reliable source of funding, operating funding, not viewed through the lens of contingency cause. I don't think it's that at all. I think it's quite the opposite.  You know, I think that all the things that Frank said, I think, make total sense for the future of the Federal Bank system.

[Julie, 21:42]

So, I actually worked for the FDIC during the financial crisis. I remember when Banks had to drive their notes into Boston when they were actually not doing so well, and that was the drive of shame. Right. And so, it is a collateralized system, but when you are not doing well financially, then you have to pony up the collateral. So that it actually doesn't hurt the other financial institutions that are there. So, I think one of the comments that was actually made in the letter around the fact that it's not just a collateral only lending, that the Federal Home Loan Bank system needs to pay attention to the solvency of the borrowers. Going back to SVB though, I don't think the uncertainty at that institution was actually understood to the degree, the volatility of those deposits and how central they were to just a few players in the market, very loud players and very socially connected players. So, I think, again, very unique - unique situation there. So, I don't really see that there is a need for anything to change on that front. I do like the idea of more and creative affordable housing programs. There are, I mean, right now we have a housing crisis, and a lot of the housing crisis is a byproduct of zoning restrictions that were put in place 30 years ago. So, I mean, look at the size of the lots at Frank's house, right? I mean, that's an example of NIMBY, right? But, and then you live in in my town, where there's 3000 square foot, you can put a, you know, a three story triple decker there.

[Vinny, 23:15]

Which one of Frank's houses were you talking about by the way.

[Frank, 23:]

I thought this was about the ABA.

[Zach, 23:25 Speaker 4]

But no, Julie, I think that sort, right? Not having the Home Loan Bank be that phone call at 4:00 PM when you need $60 billion. Like maybe happened, or something like that happened, in March. But I think all those are really important points, and I know we don't have you for an infinite amount of time. I did want to flip it if it's OK with you and Frank and Vin, too. A lot of what we talked about are some challenges and things we're trying to defend against and get more of a light on, but in the cooperative bank you've been pretty forward-looking with - on the Fintech partnership side with Alloy Labs and other endeavors. I mean, what do you see as opportunities, you know, from the ABA side in terms of ways we can help continue to make it more relevant the, you know, that community making model, what are you, what are you excited about? I guess maybe is a better way to frame that question.

[Julie 24:17]

Oh, so that one's tough. So, AI, I'm actually, in spite of the news this week, I am pretty excited about that. I think there's opportunity for us to maximize what people do and maintaining and improving our efficiency through automating a lot of the interactions that we have with our customers; when you actually look at the manual things that we do. It's kind of silly. And so, let's see. We're actually beta testing gift cards in our mobile app. So, for Christmas this year, our customers will be able to electronically send a gift card to somebody. The recipient can then decide whether or not they want the gift card from Target or, I don't know, Marshalls or anywhere. And so, I mean, I think what we're looking at those fintech partnerships are how we, how do we deepen the relationship with our customer? How do we actually wow them and keep them inside of Reading Cooperative Bank. I shared with you before the fact that we have Venmo in our mobile app. Again, I don't want any of my customers’ savings residing on a fintech balance sheet instead of on my balance sheet. So, anything that we can do around that I think going forward there has to be better ways of doing things. I think Federal Home Loan Bank system is an example. They could probably lower their operating costs if they automated a lot of things. The whole technology, blockchain technology, would work perfectly, right. I mean, there's exchange of, value-protected exchange of, value. You should be able to improve a lot of access, a lot of wire transfers, a lot of the work that we do in exchanging value. I think there's opportunities to build out. The problem for financial institutions is we can't all be making these decisions ourselves. So how can someone like the American Bankers Association and/or some other associations and relationships or the Alloy Labs partnership that we're in? The reason why we're doing that with 80 other banks that are thinking like we are, is so that we can actually get things together and figure out what the best idea is that will propel us all forward. That works for all of us. So, I can't be picking this winner and you picked a different winner. And both of them be winners. Only one is going to rise to the top. So how do we more appropriately, bet on the right products that will actually change the relationship that we have with our customers going forward. Frank, your son is younger than my kids and they just don't bank the way we do. We want them to, but then they're going off and doing something crazy. It's like, why are you doing that. But that's, they see the world entirely different, and they don't see banks the same way we see them. So, we need to actually make sure we're relevant for their generation and maybe that means we have to do things differently. Maybe we also have to be a little more attuned to what's important in society, if that's what's important to them. So, it makes me sound like a chameleon, doesn't it?

[Frank, 26:59]

No, no, not at all. That's the reality we talked about the other day, about, you know, CDs as a percentage of a bank's balance sheet and, you know, we talked about is it, you know, is it, we're seeing fewer and fewer CDs as a percentage in this similar environment than we've seen before. And is it a generational thing?

And I think it is. I think, you know, my son, your kids, they just don't seem - you want to go to a bank, put money in the bank. Other than to, you know,  clear their, you know, Uber costs, but other than that, it just doesn't seem

[Julie, 27:38]

Wait a minute. Don't you pay for the Uber? 

[Frank 27]  I do pay for the Uber. 

[Julie, 27:44] How smart is that?  Can I get on your account?

[Frank, 27:47]

Yeah, I froze them all last night, by the way. But it's, you know, you see, in the in the bank branches, Julie, you just don't see a lot of younger people walking through the Bank branches. It's just it's not in a place where the new generation, the younger generation invests money. It's just for transactional because of all of the evolution of 401Ks the low, low barriers to entry to get into mutual funds and money market mutual funds, and all those other things. So yeah, clearly banks are changing.

[Julie, 28:33]

Yeah, my kids aren't. My youngest is 23, 24 or 25 now. I can't remember. I think he's 24. So, he's got a Money Market fund. I mean, I don't think I had that much money.

[Zach, 28:48]

No, it's true.

[Frank, 28:51]

That's true.

[Julie, 28:53]

Wait a minute. That's right. That's because he's still. Yeah, renting from the House of Mom.

[Frank, 28:57]

But banking is definitely, it's definitely changing. One of the things that we're hearing and seeing, I'm sure you are too, is a lot of banks are eliminating their residential loan departments - just gone. Not doing it anymore. Too much of a commodity. So, there's fewer and fewer players in that market, a lot of it is going to the fintechs. The rocket mortgage, those types of things. So that's also helping to drive down margins. So, it's, it's changing and it seems to be changing relatively quickly.

[Julie, 29:32]

And the current crunch happened so quickly, the banks are taking draconian action. I could, just in the last week I've heard of three banks in my market area that have had layoffs. And it is a real thing. Budgets next year are constrained.

[Frank 29:47]

City banks going through that, some of the other big Banks are going through that. So yeah. And we hear it from our clients that their customers are also cutting back and, you know, we're starting to see cracks in the system. So, you know, it's going to be a challenging 2024. That's for sure.

[Zach, 30:08]

I think we're happy that you're going to be, you know, chair of the ABA, going to help steer us, you know, and navigate those waters and.

[Frank, 30:11]

Absolutely, absolutely.

[Zach, 30:17]

But no, Julie, thank you so much for the time - we really, really appreciate you. I know you're very, very busy. We're super excited, you know, for your success with the ABA and that we will get to work with you. You know it's great to work with folks like yourself. So, thanks again for the time.

[Julie, 30:31]

Good to see you.

[Vinny, 30:33]

Best of luck to you.

[Vinny, 30:39]

I'll tell you, Zach, that was an awesome discussion with Julie. She's more like, kind of sitting down with a friend over a cup of coffee - so conversational and so enjoyable. I got to tell you, my major take away is something she actually said sort of offline. And she said because we were asking her about kind of what facilitated the, what was the impetus for getting into this current role? And she said, you know, I Just feel very strongly that banks, in effect, and I'm paraphrasing her, at the intersection of relevancy, she said. There's so many different challenges and threats coming from the outside, whether it's fintech regulation, legislation, potentially, et cetera, that she felt so strongly that everyone deserves access to banking services and really the fairness of the system is so important to her and she just feels like her involvement can really make a difference. And I believe it will, I mean she - you can tell she's well versed and obviously we're partial and biased as she's been a longtime friend of Darling Consulting Group, but I really enjoyed the conversation.

[Zach, 31:4]

Vin, I think that completely segues over to my takeaway, which was when she mentioned about being at the table, and that helped her see things that were going on that may need to be addressed in her markets, right in the Greater Boston, kind of north of Boston, markets. And I think that's a really important, powerful message too, because if she wasn't involved in some of these things, if she wasn't as involved in the community and have her chief banking officer, she mentioned, or some of the other folks be so immersed in what's going on, you don't get the ideas, you don't get the information flow to be able to interject and create solutions, right? And I think whether that means joining the ABA or whatever organization you like, or whether that just means being more involved in the day-to-day of the branch network or whatever it is. I think she's like, we need to be at the table so we can be at kind of the front row, I guess, of what's going on? I thought that was a really powerful message and she absolutely lives at knowing where they, where they bank and, knowing her, Reading Cooperative Bank certainly does that.

[Vinny, 32:44]

Yeah, just an all-around terrific sort of all-encompassing conversation and a great look into what we can expect out of her in her role as the Chair of the ABA. So, we thank you for listening and stay tuned for future episodes of On the Balance Sheet.

[Dana, 33:17]

On The Balance Sheet is a podcast produced by Darling Consulting Group, Inc. (DCG).  All views and opinions expressed by the hosts and guests are solely their own and may not represent those of DCG. All third parties are independent entities and are not affiliated with DCG. This podcast is intended for informational and educational purposes only and is not considered as advice. All views and opinions expressed are based on the information available at the time and may have changed based on current market and other conditions. For more information about DCG, please visit www.darlingconsulting.com 

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