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CECL Model Guidance

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During a recent Financial Accounting Standards Board (FASB) meeting, two key decisions were announced related to the Current Expected Credit Loss (CECL) model. The FASB is currently discussing the proposed Accounting Standards Update, Financial Instruments-Credit Losses (Subtopic 825-15), with the goal of developing final guidance for the impairment of financial assets. The March 12 meeting minutes call for the final ASU to be issued in the second half of 2014. 

Corporate Cybersecurity

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Last week a federal judge held that the United States Federal Trade Commission (FTC) has the authority to regulate the cybersecurity practices of many U.S. corporations.

The ruling came in a case in which the Wyndham hotel chain was challenging the right of the FTC to regulate data security practices under Section 5 of the FTC Act, which prohibits “unfair” or “deceptive” trade practices.  The FTC has been increasingly active in this area in recent years, handing out monetary penalties and, in some cases, twenty years of mandatory third-party audits of privacy practices. 

Second Lien HE Loans

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The Texas Supreme Court’s denial of claim in Porterfield v. Patton et al., issued last week, effectively saved second lien home equity loans in the state. The Court correctly denied Porterfield’s claim that Patton, the substitute trustee under a purchase money deed of trust, should have paid some of the cash proceeds from a foreclosure to the homeowner (Porterfield) and not to the home equity lienholder (America’s Servicing). Porterfield claimed that:

Online Security

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Last week the media was abuzz with news of the Heartbleed bug, an apparent weakness in internet security protocols which allows hackers to peek on packets of secure information transmitted between users and web servers. CalTech, an IBAT Associate Member, reports that they did not find many of their clients' “in-house” servers or services that were affected, but suggested checking services provided by other 3rd party vendors.

CalTech recommends the following steps to determine whether any of your other systems might be infected:

Twitter 101

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Last year, the IBAT Strategic Planning Committee charged staff with developing resources to help community bankers better understand social media. In particular, the committee identified Twitter as an area of interest for bankers to consider due to its value for grassroots interaction with lawmakers. As a result, IBAT staff have developed five short instructional videos to help community bankers answer the basic questions, “What is Twitter?” and “How do I use it?”

Baker Market Update: April 11, 2014


In an age characterized by the instantaneous global distribution of information; in an age where high-frequency traders look for timing advantages measured in nano-seconds; in an age where waiting more than five seconds for Google to answer a question is “forever”, it seems incongruous that something that occurred weeks ago could have any contemporaneous relevance. And then there’s the FOMC. Wednesday’s release of the post-mortem of the Committee’s March meeting still managed to influence financial markets.

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