Off-Site Loan Reviews

The Federal Reserve announced an option for examiners to review loans off-site during full-scope or target examinations. If a state member bank or U.S. branch and agency of a foreign banking organization with less than $50 billion in total assets is amenable and can send legible and sufficiently comprehensive loan information to the Federal Reserve in a secure manner, examiners may conduct an off-site loan review.

If you are a state member bank, the Federal Reserve should query you prior to examination to confirm your interest in the off-site loan review program.

Staff contact: Shannon Phillips, sphillips@ibat.org, 512-275-2221

Hamilton to Stay on $10 Bill

Last week, Treasury Secretary Jack Lew rolled out sweeping changes that will put a new cast of historic figures on various bills that have remained unchanged for decades. Harriet Tubman will replace Andrew Jackson on the front of the $20 bill while Alexander Hamilton will stay put on the $10. The original plan was to replace Hamilton with Tubman but that drew massive backlash from Hamilton super fans. Tubman, one of the most important figures in the movement to end slavery, is the first woman to appear on U.S. currency in more than a century and the first African-American ever to appear. Jackson will move to the back of the $20 bill.

Additionally, the Treasury plans to add women’s suffrage leaders to the back of the $10 bill and will update the $5 bill by incorporating civil rights era leaders and important moments in American history.

According to Lew, the goal is for the new bills to be unveiled in 2020 to coincide with the 100th anniversary of the ratification of the 19th Amendment, which granted women the right to vote.

Staff contact: Lindsey Gehrig, lgehrig@ibat.org, 512-275-2215

Credit Union Field of Membership

IBAT submitted comments to the Texas Credit Union Department on a proposal to amend 7 TAC §91.301 that would define a credit union’s local service area as one or more contiguous political subdivisions that are within a reasonable proximity of a credit union’s offices. As IBAT reads the proposal, one or more contiguous political subdivisions could mean one, two or up to all of a particular type of political subdivision in Texas. If the rule is adopted as written, the decision whether a local service area is within a reasonable proximity of the credit union’s office could be left entirely to the Credit Union Commissioner or the Credit Union Department. It is possible that a credit union could simply open an office within a “reasonable proximity” of every county or school district, and its “local service area” would then be the entire state.

“IBAT expressed its strong opposition to this broad expansion of credit union field of membership because it undermines the common bond requirement,” said IBAT President and CEO Chris Williston.

IBAT commented on this and another rule proposal when the Credit Union Commission first published them on October 31, 2015. The Commission withdrew both rules but only published a new proposal for §91.301.

Staff contact: Shannon Phillips, sphillips@ibat.org, 512-275-2221

Branch Supply Store

In case you haven’t heard about the new IBAT Branch Supply Store, we’ve collaborated with Deluxe Strategic Sourcing (formerly AccuSource Solutions) to help our members consolidate, simplify and save money on the items your branches regularly buy, including:

  • Operational printing and office supplies;
  • Janitorial and break-room necessities; and
  • Promotional items and much more.

If you want a second opinion, watch this short video from IBAT Chairman-Elect Darla Rooke as she explains how Junction National Bank has been able to consolidate, simplify and save money on its purchases by relying on Deluxe Strategic Sourcing as its trusted online source for branch supplies.

With hundreds of banks achieving double-digit savings this way, IBAT decided to collaborate with Deluxe to create a one-stop supply shop for IBAT members. The IBAT Branch Supply Store ensures competitive prices on the items you need every day and lowers your overall procurement costs by saving money on purchased goods and employee time. Check it out today to see our vast selection and pricing.

Staff contact: Lori Cortez, lcortez@ibat.org, 512-275-2222

Crossroads 2016

The Federal Reserve’s first tightening cycle in more than a decade is finally here, and interest rate risk is no longer a future possibility but now a current reality. In partnership with The Baker Group, an IBAT Endorsed Service Provider, IBAT is pleased to offer Crossroads 2016: Solutions for Managing Interest Rate Risk, Liquidity and Investments Summit.

The summit will review current national and local economic conditions as well as the outlook for monetary policy in 2016. Also discussed will be various interest rate risk issues bankers may face in the next rate cycle, including specific examples of the types of analysis that are necessary to comply with heightened regulatory scrutiny on IRR. New tools for liquidity risk management will be explored, as will specific strategies to manage risk and maximize performance in bond portfolios.

We invite directors, CEOs, CFOs, investment officers, portfolio managers and others involved in their bank’s financial management to join us at The Omni Mandalay Hotel at Las Colinas in Irving on May 12, 2016 for Crossroads 2016. Register, learn more about the key topics and meet the summit leaders here.

Staff contact: Jessica Hernandez, jhernandez@ibat.org, 512-275-2207

CFPB Rural Exemption Rule

As reported in the March 29, 2016 edition of IBAT Bottom Line, the CFPB adopted an interim final rule that—in keeping with Congress’ intent in the Helping Expand Lending Practices in Rural Communities Act—expanded small creditor eligibility to originate balloon-payment qualified mortgages and balloon-payment high-cost mortgages and for an exemption from the requirement to establish an escrow account for higher-priced mortgage loans. The rule removed the test that a small creditor must make more than 50 percent of its first lien mortgage loans in rural or underserved areas and replaced it with an eligibility test that requires only one mortgage loan in a rural or underserved area.

While IBAT’s comment letter generally expressed its gratitude for the assistance the interim final rule provides mortgage lending in rural and underserved areas, it pointed out that the rule does not provide a means for small creditors to return to or enter the mortgage market and avail themselves of this expanded eligibility. Additionally, IBAT remarked that based on the wording of the underlying statute, the CFPB could consider amending the interim final rule to base eligibility on a small creditor closing a consumer purpose loan to a borrower in a rural or underserved area without regard to whether it was a mortgage loan.

Staff contact: Shannon Phillips, sphillips@ibat.org, 512-275-2221

Baker Market Update: April 25, 2016

Few would disagree with the notion that there are certain things that the private sector just does better than the public sector. Take personal consumption, for instance. Can the FOMC members offer all-you-can-eat fries like McDonald’s? No, that is not one of the policy tools they possess. They probably wish they did, though, because the first estimate of Q1 GDP comes out next week, and it’s probably going to be less than 1%. And a less-than-one-per-cent growth rate does not line up very well with an economy that needs the central bank to slow it down with higher rates.

Read more in the Baker Market Update.

Teaching Excellence Nominations

IBAT has honored Texas teachers with the Teaching Excellence in Financial Literacy Award since 2010. This award recognizes and celebrates teachers who demonstrate innovation and success promoting financial literacy in grades K-12. Local community bankers and associate members are encouraged to nominate outstanding teachers in their communities. Three winners are selected annually, and each receives a $1,000 award from the IBAT Education Foundation.

An ideal nominee is a public, charter or private school educator dedicated to promoting financial education. This individual displays a passion for teaching and understands the importance of preparing today's students for tomorrow's financial decisions. Bankers/associate members and their teacher nominees will need to submit an application that includes the nomination form, letter of support and a teacher application form. A panel of judges will review the applications and announce the winners by May 20, 2016. 

We invite all IBAT members to seek out and nominate exemplary teachers in their local schools. The application deadline is Friday, April 29, 2016.

Staff contact: Mary Lange, mlange@ibat.org, 512-275-2224

IBAT Branch Supply Store


IBAT has collaborated with Deluxe Strategic Sourcing (formerly AccuSource Solutions) to help you consolidate, simplify and save money on the items you and your branches regularly buy, including:

  • Operational printing and office supplies; 
  • Janitorial and break-room necessities; and
  • Promotional items.

You do not need to be a current customer of Deluxe Strategic Sourcing to take advantage of the discount and convenience available to you through the IBAT Branch Supply Store.

Staff contact: Lori Cortez, lcortez@ibat.org, 512-275-2222

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.

Madden v. Midland Funding

In a move that means the United States Supreme Court is considering a request to review a case that could have serious ramifications for many lending models, the court asked the U.S. Solicitor General to file a brief regarding the 2015 Second Circuit Court of Appeals decision in Madden v. Midland Funding, LLC. The Madden case involves Section 85 of the National Bank Act, which allows national banks to export the usury rate in the state where it is located. The Second Circuit held that a national bank transferring a note to a third party does not transfer its authority to charge interest in excess of the state’s usury caps of the state in which the third party is located. Thus, the third party could not charge the contracted rate if it exceeded the usury rate in the state where the borrower was located.

“We believe that the Second Circuit’s decision conflicts with the valid-when-made doctrine,” remarked IBAT Deputy General Counsel Shannon Phillips. “If reviewed and upheld by a majority of the current justices, the decision, which is currently binding in only three northeastern states, would apply nationwide and potentially disrupt online lending and all secondary markets.”

Because the Riegle-Neal Act gave state charters the same preemption authority, this could also affect state charters. Although Supreme Court briefing rules will not likely provide IBAT an opportunity to file a brief with the court, we will follow this case and report on any developments.

Staff contact: Shannon Phillips, sphillips@ibat.org, 512-275-2221

SWACHA Webinars

IBAT is proud to bring you a series of ACH webinars in partnership with SWACHA. Throughout 2016, join us for the live webinars or purchase the on-demand version of the programs and learn in your own time. For all upcoming programs, please visit our webinars pageWhen registering online, please specify that you heard about this program through IBAT.

For now, we'd like to bring your attention to the April programs.

SWACHA: Government ACH Reclamations
April 27, 2016  |  10:00-11:30 a.m.  |  Register

Reclamations of Federal Government benefit payments pose considerable liability and are among the most common sources of charge-offs for Receiving Depository Financial Institutions (RDFIs). Timely and accurate handling of these government payments is a critical competency for RDFIs to limit their liability and prevent loss. This seminar will explore government ACH processes in-depth in the unique handling requirements for reclamations. A member from the Bureau of Fiscal Services will be presenting the session on Green Book Chapter 5.

Who should attend?
ACH / branch operations personnel, operations officers/supervisors, compliance officers/personnel.


H. R. 3791 Bill Passed

Texas Congressman and House Financial Services Committee Chairman Jeb Hensarling spoke in support of community banking last week during his comments related to the successful passage of H.R. 3791, which raises the threshold for small bank holding company treatment to $5 billion. H.R. 3791 passed the House 247-171. In a press release accompanying the text of his comments, Hensarling pointed to the challenges facing community banks and small businesses that are struggling to deal with the ever-expanding regulatory pressure from Washington, D.C. 

“Wouldn’t it be nice to hear for a change that community banks are once again hiring new loan officers to serve their communities as opposed to more regulatory compliance officers to serve their Washington masters?,” Hensarling stated in his comments. “That’s how you help capitalize more small businesses and help families pay their bills, plan for the future and achieve the dream of financial independence.”

IBAT appreciates the continued efforts of Chairman Hensarling and many others in Congress to move regulatory relief provisions forward. Special thanks to Congresswoman Mia Love, the bill author, along with bill co-sponsors Congressmen Blaine Luetkemeyer, Pete Sessions, Steve Stivers and Roger Williams.

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-275-2226

Dine and Demo

IBAT’s Dine and Demo, a successful new series, kicked off last month. The next webinar will take place on May 24, 2016, and now is the perfect time for bankers to register. In case you missed the first one and are wondering, what is Dine and Demo?

The IBAT Dine and Demo series is a quarterly lunchtime webinar, noon-1 p.m., in which up to seven companies provide product demonstrations in seven minutes or less. There is no cost for bankers to attend so order in lunch, gather your team around the conference room table and see the best that industry providers have to offer from the comfort of your own bank.

The lineup for the second webinar includes CalTech and S&P Global Market Intelligence, along with five pending companies. It promises to be a well-rounded group worthy of your time.

We’ve heard from bankers about your lack of time to meet with providers – Dine and Demo is the solution. We highly encourage you to participate in this free program on May 24, 2016. Register and learn more about Dine and Demo here.

Staff contact: Julie Courtney, jcourtney@ibat.org, 512-275-2227