TRID Rule Comment Letter

The CFPB is going back to the drawing board to address key areas of concern regarding the TILA/RESPA integrated disclosures. In a letter issued last week, the Bureau indicated a late-July beginning to the formal process required for amendments to be made to the rules. 

In the letter, CFPB Director Richard Cordray thanked members of the industry for their ongoing feedback regarding the rules and the technical challenges they have created.

“We continue to seek your active engagement in providing us with concrete information about technical problems…detailed and precise information is most helpful and will enable us to fully understand the concerns and evaluate how to best provide guidance,” Cordray said. 

IBAT will send timely notification to all members when the notice of proposed rulemaking is issued in July.

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

IBAT Discusses Hard-Hitting Issues

During last week's Congressional Visit, several Texas community bankers and IBAT staff members had an hour-long meeting with Consumer Financial Protection Bureau (CFPB) Director Richard Cordray. The meeting, arranged by Texas Department of Banking Commissioner Charles Cooper, was an opportunity for Texas community bankers to express their thanks for the recent interim final rule that greatly expanded the number of small bank creditors able to serve rural and underserved markets. The participants also addressed the need for additional clarification on this rule and a host of other issues.

Commissioner Cooper and IBAT President and CEO Chris Williston were joined by IBAT Chairman Rogers Pope, Jr. from Texas Bank and Trust, John Jay from Roscoe State Bank, Brad Tidwell from Citizens National Bank, Christopher Doyle from Texas First Bank, Cliff McCauley from Frost Bank and Kelly Goulart from IBAT. 

Discussions included a request to clarify the two-year look-back period for a small creditor to qualify as serving a rural or underserved area, ability-to-repay challenges for small business owners and ranchers, and the scope of "Know Before You Owe" (TRID). Director Cordray was especially appreciative of the firsthand experiences of Texas community bankers and promised serious consideration of the issues raised.

Following the meeting last Thursday, the CFPB sent a letter to various trade groups announcing that in late July it will begin a process that could amend the "Know Before You Owe" rules. While it is unclear exactly what changes might be considered, the process itself could bring much-needed clarification to the rules.

"It was a very informative and positive meeting, and Director Cordray was engaged and receptive to the feedback our bankers provided," said Williston. "We want to express our sincere appreciation to Commissioner Cooper for laying the groundwork to make this meeting possible. He was the one who really made it happen."

Staff contact: Kelly Goulart, kgoulart@ibat.org, 512-275-2231

DC Trip Recap

Last week, 120 representatives from the Texas community banking industry took IBAT’s message to Capitol Hill in Washington, D.C. as part of the association’s 24th Annual Congressional Visit.

In meetings with members of the Texas Congressional delegation, IBAT members urged co-sponsorship of key pieces of legislation to allow regulators the ability to right-size new regulations based on a bank’s risk profile, place greater Congressional oversight on the activities of the CFPB and raise the data security standards for merchants handling sensitive payment information.

While meetings were productive and IBAT members were well received, the cloud of presidential politics hung over the proceedings with several lawmakers explicitly noting that “not much is likely to get done” in a presidential election year.

“IBAT members were not deterred by the ‘do-nothing’ attitudes they were confronted with,” said IBAT President and CEO Chris Williston. “Everyone realizes that we’re playing the long game, and community bankers are determined to keep up the drumbeat until Congress addresses the damage it has inflicted on the industry by punishing community banks for the misdeeds of others.”

In addition to meetings conducted by members on Capitol Hill, IBAT General Counsel Karen Neeley and Deputy General Counsel Shannon Phillips met with staff of the CFPB on the topic of overdraft protection. During that meeting, CFPB staff indicated that they are very much still in the “fact finding” portion of overdraft rulemaking and the release of any proposal is not imminent.

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

Baker Market Update: May 2, 2016

It’s been surprising to many, that a week that was pregnant with the potential for surprises didn’t really produce any; the NFL draft notwithstanding.  The deviations from expectations that did occur were not really all that surprising to those that have been paying attention.

Last week’s first unsurprising “surprise” came with a report that New Home Sales fell by 1.5% in March. More surprising than that was the revision of February’s 2% gain into a 0.4% decline. Oops. And, the 2% increase in Durable Goods Orders that would have been just what the doctor ordered, became a disappointing rise of just 0.8%.  That rise becomes a 0.2% fall when transportation components are taken out of the equation.  It is no mystery that weak business investment continues to be the manifestation of business uncertainty.

Read more in the Baker Market Update

Best of Community Banking Awards

By now, you should have received the 2016 Best of Community Banking (BOCB) Awards mailing that includes the brochure and entry form. 2016 marks the 25th year of this award competition, which provides an opportunity for you to showcase your bank, employees and officers, and the contributions made to keep your local community thriving and prosperous.

Categories include architectural design, community service, financial literacy and marketing. Entries are due to IBAT by 5 p.m. on Monday, June 27, 2016.

Special thanks to this year’s sponsors:

  • Bank Compensation Consulting
  • BKD, LLP
  • CalTech
  • Federal Home Loan Bank
  • Fenimore, Kay, Harrison and Ford, LLP
  • Garland Heart
  • Rogers-Ford, L.C. Architecture and Interior Design
  • TransFund

All entries will be displayed during the IBAT Annual Convention at La Cantera Hill Country Resort in San Antonio, September 24-27, 2016. Gold Eagle Award winners will be recognized during the Best of Community Banking Awards luncheon on September 26, 2016.

Staff contact: Mae Beth Palone, mbpalone@ibat.org, 512-275-2219

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 these teachers each receive 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 Today. 

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

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

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