84th Legislative Session

For those unable to participate in last week’s end-of-session webinar, the audio presentation is available here. Additionally, the accompanying slide presentation can be accessed here. A special thanks to Texas Banking Commissioner Charles Cooper and IBAT General Counsel Karen Neeley for their participation. We encourage anyone who hasn’t already reviewed this information to take a few minutes to do so. The webinar covered a variety of issues and bills from the 84th Texas Legislature that may impact your bank.

Lastly, Karen Neeley’s legislative white paper is now available. This is a comprehensive overview of all things legislative that could affect you, your bank and your customers. Please note the majority of bills passed this session go into effect on September 1, 2015.

Cybersecurity Assessment Tool

The Federal Financial Institutions Examination Council (FFIEC) issued a cybersecurity assessment tool to help financial institutions evaluate their risks and cybersecurity preparedness. Office of the Comptroller of the Currency (OCC) examiners will begin to incorporate this tool into examinations for banks of all sizes to benchmark and assess bank cybersecurity efforts.

This new tool will help both banks and examiners determine a bank’s inherent risk profile and level of cybersecurity preparedness. Results will be used to determine if a bank’s cybersecurity maturity level aligns with its inherent risk profile.

Additional information about this cybersecurity assessment tool can be found here. Mark your calendar for Financial Education's and IBAT’s webinar on how to use the newly released FFIEC cybersecurity assessment tool on July 20, 2015, or you can register to receive the archived webinar. Register and find additional webinar information

Impacting Communities

Since its official launch in early 2012, the IBAT Teach the Teacher Program™ has made a significant impact across the state. Created to address the Texas Legislature’s unfunded mandate requiring all public high school seniors to take a financial literacy class prior to graduation, this six-hour instructional course provides educators with engaging and practical approaches to teaching money management. The demand for Teach the Teacher continues to grow each year.

To date, Teach the Teacher has been held in 17 cities - covering 16 of the 20 Texas Education Agency regions - with 800 teachers in attendance. Each program has had between 30 and 60 teacher participants, who in total have impacted nearly 120,000 students. Many of these students do not receive financial education in their home so they depend on their teachers to learn this important life skill. If you’re interested in Teach the Teacher coming to your area, contact Mary Lange.

IBAT members with a passion for building financially literate communities, while earning CRA credit, are invited to attend the upcoming Texas Financial Literacy Summit in Dallas, July 28-29. Summit registration and additional information can be found here.

Baker Market Update: July 6, 2015

It looks like the Bureau of Labor Statistics is taking a page out of the Treasury Department’s playbook. If the Treasury can arbitrarily change whose face is on the ten-dollar bill, the BLS has apparently decided it can make the first Friday of July fall on a Thursday. What’s happened to this nation’s time-honored traditions!? Well, the BLS gets a pass on this one since Independence Day is this Saturday and markets are closed tomorrow, so their first-Friday-of-the-month jobs report hit the newsstands this morning. Taking a hit right off the bat was last month’s report.

The originally reported 280k new jobs created in May actually turned out to only be 254k. This morning’s report tells us that 223k new jobs were created in June, but the market was expecting more. So how is it that the Unemployment Rate fell by .2% to a new, low 5.3%? Well, because the Labor Force Participation Rate fell by even more. The new rate of 62.6% was 62.9% a month ago. That’s one way to get the Unemployment Rate down.

Read more in the Baker Market Update.

2015 Salary Survey

The data collection period for IBAT’s Texas Community Bank Salary and Compensation Survey is now open!

Please take some time to participate in this year's survey. What are the benefits of providing your bank's data for the IBAT Salary Survey? Participating banks receive:

  • A PDF copy of the full survey report for FREE;
  • Exclusive access to a compensation strategies webinar, hosted by Bank Compensation Consulting, FREE of charge; and
  • Discounted pricing on the segmented data reporting tool. 

Finally, we’ll send the person who completes the report a $5 SONIC gift card to “sweeten” the deal. Participation is open to all Texas community banks. Please help us set a new record for participation this year and make the survey more valuable than ever.

Click here to create a profile, complete the survey online or download a printed reporting form to complete the survey to send back via fax.

Consumer Tips - July 2015

Buying your first home is one of the most exciting, and often overwhelming, experiences of your life. If properly educated about the process and prepared for each step you will need to take, this can be not only manageable but also enjoyable. No matter your age or stage in life, becoming a homeowner is a huge milestone. Below are tips to help guide anyone looking for their first home.

Read complete tips here.

Flood Rule

In a joint rule, the regulatory agencies implemented provisions of the Homeowners Flood Insurance Affordability Act of 2014 (HFIAA) related to requiring escrow for flood insurance payments and exempting certain detached structures from the mandatory flood insurance purchase requirements.

Lenders with assets of $1 billion or more are required to escrow both flood insurance premiums and fees for loans secured by residential improved real estate or mobile homes and that are made, increased, extended or renewed on or after January 1, 2016. They also must provide borrowers with covered loans outstanding as of January 1, 2016 the option to escrow flood insurance premiums and fees. The final rule includes new and revised sample notice forms and clauses regarding the escrow requirement and option to escrow.

Structures that are part of a residential property but are detached from the primary residence and do not serve as a residence are exempt from the flood insurance requirement. The rule clarified that “serve as a residence” is based upon a good faith determination that the structure is intended for use or is actually used as a residence. However, under HFIAA, lenders may require flood insurance on the detached structures to protect collateral.

The rule also implements provisions of Biggert-Watters Flood Insurance Reform Act of 2012 about the force placement of flood insurance when homeowners’ policies lapse or are insufficient. The force-placement provisions clarify that lenders have authority to charge a borrower for the cost of force-placed flood insurance coverage beginning on the date that the borrower’s coverage lapses or becomes insufficient and stipulates the circumstances under which a lender must terminate force-placed flood insurance and refund payments to the borrower.

FDIC Banker Outreach

The Independent Bankers Association of Texas and the Texas Bankers Association have partnered with the FDIC to provide this important update on current and emerging banking issues. Breakout sessions are tailored for directors, risk management staff and consumer compliance staff. Attendees will be provided with resource materials for future reference.

All bank directors, CEOs and bank officers are encouraged to attend this timely update, participate in the sessions and share their perspectives with the group. Topics that will be covered include consumer protection, information technology, concentration risk management and internal routines & controls/fraud.

FDIC Banker Outreach Programs will occur in Austin on August 18 and in Dallas on August 20. Please make your reservations early - this meeting has been known to sell out.

Operations Compliance

The operations side of the bank is facing increasing challenges. Technology is driving more products, but creating new security and compliance burdens. Innovative products are bringing in more non-interest income, but also raising regulatory concerns. And non-bank agencies continue to poke around in bank records and operations!

New this year!
The Summit has added a panel of experts to conduct a case study concerning Cyber Security & Disaster Recovery.

Topics Include:

  • Cyber Security
  • Escheat Basics
  • Electronic Banking
  • CFPB Update
  • Common HR Mistakes for Today’s Bankers

Who Should Attend
This Summit will benefit anyone with responsibilities in the operations and compliance departments of community financial institutions. Learn more and register.


The July/August 2015 digital edition of IBAT’s magazine, The Texas Independent Banker, is now available online. Click here to view the full table of contents or link directly to specific content below:

As always, if you have suggestions for future content to be featured in The Texas Independent Banker magazine, please contact Bonnie Kankel.

IBAT Career Center

Are you looking to add new members to your team? Between today and July 31, enjoy 20% off the posting of job openings in the IBAT Career Center. To receive the discount, log in to the Career Center and enter discount code “SUMMER20” at checkout. 

In addition to receiving 20% off, we’ll highlight your job posting in the month ahead. When open positions at IBAT member banks are posted in the IBAT Career Center, they will be featured in the Bottom Line


In a case involving the allocation of housing tax credits in predominantly black and predominantly white neighborhoods by the Texas Department of Housing and Community Affairs, the United States Supreme Court held that “disparate-impact claims are cognizable under the Fair Housing Act.” Although this case didn’t involve fair lending, it would be difficult to distinguish the court’s ratification of disparate-impact theory of liability in fair housing cases from its current use by regulators in fair lending.

“It has been a long road to a Supreme Court opinion on the disparate-impact theory,” said IBAT President and CEO Chris Williston. “We thank Texas Attorney General Ken Paxton and his predecessor Greg Abbott for recognizing the importance of this issue and taking it to the highest court in the land. Although the court approved the use of disparate-impact, it didn’t approve the regulators’ flawed statistical analyses and application of the theory on community banks. IBAT will continue to fight for appropriate fair use of this theory on the community banks of Texas.”

Tax Bills Summary

IBAT has historically engaged an outside lobbyist to keep up with the abundant tax bills and actions at each session of the Texas Legislature. This session, we engaged James LeBas, a tax expert and one of the architects of the margins tax.

For those of you who have an interest, James has provided a detailed summary of all of the tax bills passed this session for your review.

Our customary Legislative White Paper is in final edit and will be made available to the membership in electronic format very soon.

Register Today

We are pleased to announce that registration is now open for IBAT’s 41st Annual Convention. For the first time in more than 30 years, the event will take place at the Galveston Island Convention Center, September 19-22. A detailed brochure about this event will be in your mailbox in the coming days. In the meantime, you may download a PDF here.

This year’s Convention is packed with educational and networking opportunities, including:

  • Chairman’s tailgate party;
  • State and national bank regulator roundtables;
  • Ten concurrent sessions addressing a variety of challenges you face every day;
  • Songwriters’ late show; and
  • Fishing tournament.

And don’t forget about the Annual Auction and Dream Vacation Sweepstakes, both benefitting the IBAT PAC. You may donate or purchase an item in the Auction or enter the Dream Vacation for a chance to win a $5,000 gift card. Detailed information will be included in next week’s edition of the Bottom Line.

Baker Market Update: June 29, 2015

If Alexander Hamilton were alive today, he’d be spinning in his grave. Well, that’s what Yogi Berra might say. The nation’s first Treasury Secretary will lose his place on the ten-dollar bill if the current holder of that office has his way, and that would be upsetting to anyone; particularly a Founding Father who lost his life in a duel with that no-good Aaron Burr. Regardless of whose likeness adorns our currency these days, Americans have been spending more of it. We learned this week that Personal Spending rose by .9% in May, and if that still doesn’t sound like a lot, it was a whole lot better than April’s .1% increase. Helping to spur this spending uptick was the .5% rise in Personal Income. This is good news for Janet Yellen et al., who have been lamenting the absence of growth in the amount of money that people make and the presence of growth in the amount they haven’t been spending. Could things be turning around for the consumer?

Read more in the Baker Market Update.

Best of Community Banking

For all those who plan to submit Best of Community Banking (BOCB) Awardentries but haven’t done so yet, this is your friendly reminder that they’re due to IBAT by 5 p.m. on June 30. Categories include architectural design, community service, financial literacy and marketing.

All entries will be displayed during the IBAT Annual Convention at the Galveston Island Convention Center, September 19-22. Gold Eagle Award winners will be recognized during the Best of Community Banking Awards luncheon on Monday, September 21.

As we celebrate the 24th year of our BOCB Awards, we hope you will take this opportunity to showcase your bank, shareholders, officers, employees and the contributions you make to keep your local community thriving and prosperous.

Legislative Webinar

Please join us for our customary webinar to review the good - and not so good - that came out of the (almost over!) 84th Texas Legislature. This popular, convenient and free program will cover some of the big issues, as well as bills passed that may impact you and your bank. We are hopeful that Karen Neeley’s white paper will be completed and ready for distribution prior to the program.

Please plan to attend this informative program on Tuesday, June 30, from 2:00-3:30 p.m. During the webinar, you will have the opportunity to send in questions. We will also have an open discussion at the end. Registration is now open. We appreciate your engagement in this important process and look forward to hearing from you. 

Call to Action

The FDIC issued a proposed rule last week that would change the way that community banks are assessed for deposit insurance - basing assessment rates on the probability of failure over three years. 

The rule would impact banks with less than $10 billion in assets and that have been insured by the FDIC for at least five years. In a statement issued with the proposal, the FDIC said that changes in the assessment calculation would result in lower premiums for 60 percent of banks, with 20 percent paying more and 20 percent having no change in their premiums. 

IBAT plans to comment on the proposal within the 60-day comment period, currently open. To ensure that our comments capture the sentiment of the entire IBAT membership, we ask for your feedback on the proposal. To assist you in evaluating the proposed rule and assessment change, the FDIC has developed a Deposit Insurance Calculator to estimate your bank’s assessment.

If you would like to provide feedback to IBAT staff as our comment letter is developed, please do so by emailing Shannon Phillips, IBAT Deputy General Counsel.