Baker Market Update: Oct. 5, 2015

Believe it or not, there are cynics among us who think that Janet Yellen and the Fed are spending much of their time these days just looking for excuses not to raise rates. Perish the thought! But, if those cynics are correct, the job of those excuse-seekers on the FOMC just got easier. At least it’s a job, though, and we learned this morning that job creation last month was, well, there’s just no excuse for it.

Read more in the Baker Market Update.

Bank Operations Institute

If you ask young professionals about a career in banking, they shrug and say "BORING." That is, until you start talking payment systems, cybersecurity, transaction speed, identity protection, fraud and other operational issues.

If you are growing your bank talent, this is a great year to send your employees, or send yourself, to the Bank Operations Institute (BOI) - a community bank-focused operations school. In its 36th year, IBAT's BOI is nothing short of successful operational leadership - all based on understanding the uniform bank performance report (UBPR), call reports and the rules and regs that measure bank performance.

Anyone working as a bank operations, lending or administrative officer who needs to develop managerial competencies for community banks is invited to attend the 2015 BOI program in Dallas. Click here to register for the October 11-16, 2015 program.

Top Fin Tech Companies

Several IBAT endorsed service providers are featured in the recently announced 2015 IDC Financial Insights FinTech Rankings - top 100 companies in FinTech. IBAT would like to congratulate the following:

  • Diebold (#7),
  • First Data Corporation (#13),
  • D+H Corporation (#21) and
  • CSI (#64).

Additionally, a number of IBAT associate members are also included on the list. Congratulations to all!


Board education and training are essential “best practices” in the new era of community banking. Regulatory expectations, along with the need for wise management, demand a skill set that many directors lack. In answer to this, IBAT and SWGSB are pleased to offer The Certified Community Bank Director’s (CCBD™) Program, held October 29-31, 2015 at the Cox School of Business. Please register and reserve your room before the Friday, October 2, 2015 deadline.

The CCBD Program is designed for both new directors, including those new to banking, and experienced directors. We are delighted to offer two levels for the Program:

  • Level 1 is designed to address the most fundamental skills needed by directors today. It is suitable for new, as well as experienced, directors looking to be certified on core director responsibilities. 
  • Level 2 has been introduced for those directors who have completed Level 1 of the CCBD Program (or equivalent) and are ready to drill down into additional areas the modern director needs to master. The additional hours earned after completing Level 2 will fulfill the requirements for CCBD Certification. 

This certification covers not only the regulatory and fiduciary responsibilities of bank directors, but also board structures and processes. In addition, the program focuses on the strategic responsibilities that make boards and directors effective. 

Leal Appointed to CFPB Council

Congratulations to Ricky Leal, Senior Vice President and Banking Center Manager at First Community Bank N.A (Harlingen, TX), for being appointed to the Consumer Financial Protection Bureau’s (CFPB) Community Bank Advisory Council.

As a member of this council, Leal will provide the CFPB with advice and feedback on policy development, research, rulemaking and engagement. This is an opportunity for a Texas community banker to ensure the CFPB knows how consumer laws and regulations impact both his bank and his customers. He will serve a two-year term.

Winter Summit XVI

After 15 years in South Lake Tahoe, the Winter Summit is changing venues. We have booked a fabulous ski resort - The Westin Riverfront Resort and Spa in Beaver Creek, Colorado - for a program that starts the evening of January 25 and concludes the afternoon of January 27. There are limited rooms available on both the front and back ends of the program at significant discounts from published rates.

While we are finalizing the program as you read this, we have commitments from the top regulators in Texas along with three of the state’s top banking attorneys. Additionally, Ryan Hayhurst of The Baker Group will again close the program with an economic and investment strategy update. This is a relaxed, informal learning opportunity blended with ample time for winter recreation and networking. Mark your calendar!

Watch for more information and an opportunity to register for this very popular program in coming weeks.

IRR and Investment Management

We invite you to join us in Dallas next month for IBAT’s Interest-Rate Risk and Investment Management Summit. On October 29, this Summit will address important elements of prudent investment and interest-rate risk management providing directors, CEOs, CFOs, investment officers and portfolio managers with the tools and resources necessary to optimize their bank’s performance while staying within risk-tolerance parameters.

Specific examples of the types of analysis that are necessary to comply with heightened regulatory scrutiny on IRR, bond portfolios and trends in the rate environment will be discussed, in addition to many other related topics. If you’re looking for strategies and tactics to meet the performance challenges in your bank, this is the event for you. Learn more and register here.

H.R. 3192

IBAT, along with Texas Land Title Association and Texas Bankers Association, sent a letter to House Financial Services Committee Chairman Jeb Hensarling expressing appreciation for the Committee’s reporting H.R. 3192 – Homebuyers Assistance Act to the full House.

H.R. 3192 provides a temporary safe harbor for lenders making a good faith effort to comply with the new TILA-RESPA Integrated Disclosure. If it becomes law, it will prohibit a suit filed against any person for a violation of the TRID requirements occurring before February 1, 2016, as long as the person made a good faith effort to comply. IBAT will closely monitor the progress of H.R. 3192 and report its fate to members. We are optimistic about the success of this bill.

IBAT Webinars

Did you know? IBAT, in conjunction with Financial Education, Inc., hosts close to 150 webinars a year. Webinars are a very economical way to train your staff for one low price. Everyone can sit in on the program with the use of a speakerphone and a computer, or access archived webinars on-demand.

Topics are broken up by category or by date and include:

  • Auditing & Accounting
  • Collection
  • Compliance
  • Directors
  • Frontline and New Accounts
  • Human Resources
  • IT
  • IRA
  • Lending
  • Operations
  • Security & Fraud
  • Senior Management

You can access a complete listing of upcoming webinars and archived webinars here.

Convention Success

IBAT hosted its 41st Annual Convention at the Galveston Island Convention Center last week. We want to thank the more than 700 bankers, spouses and industry partners who helped make our largest event a huge success. As anyone in Galveston could attest, the community banking industry is alive and thriving in Texas.

The Chairman’s Tailgate Party was full of team spirit, the sessions were overflowing, the exhibit hall was packed, the PAC Auction was the place to be and the Songwriters’ Late Show was jamming. Thanks to the generosity of attendees, the PAC Auction raised nearly $120,000. This includes more than $20,000 from the new ‘Paddles Up,’ which was a huge success and will be used in future PAC Auctions.  

Handouts from the following sessions are available online:

Congratulations to the new slate of board members officially elected at Convention, including Chairman Rogers Pope, Jr. (Texas Bank and Trust), Chair-Elect Darla Rooke (Junction National Bank), Secretary-Treasurer Joe Kim King (Brady National Bank) and Immediate Past Chairman John Jay (Roscoe State Bank). New directors Gary Owens (Southwestern National Bank) and Kenny Zapalac (National Bank & Trust) were also added to the IBAT Board.

Photos from the 41st Annual Convention are available online. If you attended the Convention are looking for additional photos, please contact Christopher Williston.

Final Rule

On September 21, 2015, the CFPB finalized its rule by adopting what it proposed in January 2015. The final rule expands the definition of a rural area to include census blocks that are not in an urban area.

For a small creditor making loans only in counties that are deemed rural, nothing changes because any first-lien mortgage loan made in a county designated rural is considered a rural loan. For a small creditor making at least some of its first-lien mortgage loans outside of the counties designated rural, more than 50% of those loans must be made (to qualify for the exemptions): (1) in counties that are rural, (2) outside of urban areas of counties that are not rural and (3) in counties that are underserved. (Please note the rule does not revise the definition of rural county in Regulation Z’s HPML appraisal provisions or affect the exemption from the requirement to obtain a second appraisal for certain HPMLs.)

Also of importance, the CFPB’s final rule:

  • Expands the definition of a small creditor from 500 first-lien mortgage loans to 2,000 mortgage loans, excluding loans held in portfolio (IBAT supported this);
  • Includes the asset of the creditor’s mortgage originating affiliates in calculating whether a creditor is under the $2 billion limit for small creditor status (IBAT did not support this);
  • Extends the expiration of the temporary extension under which eligible small creditors are currently able to make balloon-payment Qualified Mortgages and balloon-payment high-cost mortgages regardless of where they operate from January 10, 2016 to April 1, 2016 (IBAT supports and is seeking a permanent extension); and
  • Creates a one-year qualifying period for rural or underserved creditor status.

For full background on this issue, click here

Q3 Dell Sale

For the third quarter of 2015, Dell is offering IBAT member banks, bank employees and customers 35% off the list price of Optiplex and Latitude PCs. Please use current coupon code SAVE35BIZ.

Additional offers include:

  • Save an extra 10% on select XPS and Inspiron PCs
  • Save an extra 10% on select PowerEdge servers $1299 and above
  • Save an extra 10% on Dell Precision Workstations
  • Save up to an additional 10% on select Dell electronics and accessories

While these deals are offered until October 31, IBAT member savings are available from Dell all year long. On average, IBAT members enjoy savings of approximately 30% on each order. If you'd like to take advantage of the Q3 deal, visit Dell's website or contact Bryan Horten, IBAT’s Strategic Account Manager, at 512-942-9120. Be sure to include the unique Dell/IBAT link number GS126658178 when placing your order. For orders of more than five units, please contact Bryan.

Feel free to download the flyer listing the current discounts, and share it with your staff and customers

Full Background

In early 2013, the CFPB proposed a definition of rural areas that expanded the previously adopted definition, but fell short of providing the relief needed for the country’s rural mortgage markets. For years, IBAT has advocated an exemption for in-portfolio mortgage loans. IBAT staff recognized the importance of providing thoughtful feedback on the proposed rural areas definition. After studying the proposal carefully, determining that it didn’t provide the relief needed for the country’s rural mortgage markets, IBAT’s research led it to the Census Bureau’s definition of urbanized areas (densely populated areas of over 50,000). If all areas outside of urbanized areas were considered rural areas, it would provide as much relief as could be garnered without an in-portfolio exemption.

On May 2, 2013, IBAT submitted a comment letter proposing just this—the CFPB expand the definition of rural areas to include all areas outside of the country’s urbanized areas. A few days later, IBAT President and CEO Chris Williston and Deputy General Counsel Shannon Phillips Jr. travelled to CFPB headquarters to discuss IBAT’s proposal with CFPB staff. At that meeting, the CFPB commended IBAT for suggesting a solution that it wasn’t acquainted with previously. Soon after that meeting, CFPB announced a two-year grace period while it studied the issue. During that two years, IBAT asserted its solution to CFPB at every opportunity—in another comment letter, at several meetings with CFPB staff and briefly during a banker meeting in Dallas with CFPB Director Cordray.

On January 29, 2015, the CFPB issued proposed rules that contained several positive advances and included a definition of rural areas that was undeniably based on IBAT’s proposal. Unfortunately, instead of adopting IBAT’s definition in whole, the CFPB’s proposal retained the same rural designated counties and additionally provided that first lien mortgage loans made in areas outside of the urban areas (densely populated areas of 2,500 or more) of non-rural counties would also be considered rural loans. In response, IBAT submitted a comment letter that commended the advances made in the proposal, but, in great detail, described how the proposed rural areas definition would continue to depress mortgage lending nationwide, create two classes of loans in rural America and create inequities between loans secured by similarly situated properties.

Baker Market Update: Sept. 28, 2015

With the death this week of Yogi Berra, the world lost a national treasure. We learned this morning, though, that our nation’s treasure, or at least its GDP, still grew by 3.9% in the second quarter. That should make everyone feel a lot more like they do now than they did before. This third, and perhaps final, estimate of economic output was slightly better than the 3.7% previously estimated growth rate. A big reason for the upward revision can be traced back to larger-than-expected revisions in Personal Consumption, and that’s welcome news for policymakers as well as those on the other side of all that consumption.

Read more in the Baker Market Update.