Overregulation Warning

In an op-ed that appeared in the Lubbock Avalanche-Journal recently, Congressman Randy Neugebauer from Texas’ 19th congressional district warns about the negative impact of overregulation on community banks. Congress Neugebauer, a member of the House Financial Services Committee, states that the more than 400 regulations contained in Dodd-Frank have “brought bank consolidation, trimmed product lines and created the culture of ‘too small to succeed.’”

He goes on to detail how regulatory burden has stopped some community banks from offering residential mortgages, home equity lines of credit, overdraft protection and credit cards to customers. The Congressman closes by asking for regulatory relief and an end to the unintended consequences of Dodd-Frank that are harming banks that did not cause the financial crisis.

Dell Double Discounts

Dell double discounts continue! Dell is doubling its discounts exclusively for IBAT member banks, bank employees and customers through the month of April. On average, IBAT members enjoy savings of approximately 30% on each order. If you'd like to take advantage of this deal, visit Dell's website.

Current offers include:

  • 10% off Latitude, Optiplex, XPS, Desktops and Laptops;
  • 20% off Precision Workstations;
  • 20% off PowerEdge Servers $1499 and above;
  • 4% off Inspiron Desktops and Laptops; and
  • 10% off Dell electronics and accessories.

Ordering is easy! Visit Dell's website or contact Bryan Horten, IBAT’s Strategic Account Manager, at 512-942-9120 to order. To ensure you are getting the maximum discounts available with your IBAT membership, please include the unique Dell/IBAT link number GS126658178 when placing your order.

QM Reg Relief Bill Filed

One of the key provisions of the IBAT-endorsed Plan for Prosperity was introduced by Representative Andy Barr last week in the form of The Portfolio Lending and Mortgage Access Act (H.R. 1113). As drafted, H.R. 1113 would give qualified mortgage treatment to loans held in portfolio for all financial institutions.

What remains to be seen is how Republican leadership in the House and Senate will move regulatory relief legislation. Senator Elizabeth Warren of the Senate Banking Committee has expressed her distaste for legislation that benefits Wall Street Banks, meaning any bill ultimately passed offering QM status to loans in portfolio will likely need to be tiered to apply to banks under a certain size. Warren’s approval of any legislation altering Dodd-Frank is considered the bellwether of the Obama administration’s likelihood to sign it into law.

“All politics aside, IBAT is supportive of any efforts that improve the business climate for community banks and allow them to better serve their customers,” said IBAT President and CEO Chris Williston. “We appreciate the work of Representative Barr to keep up the momentum for meaningful relief in the mortgage arena.”

The various provisions of the ICBA Plan for Prosperity were front and center as IBAT took to the road for the second round of the Tour de Texas Regional Meetings last week. ICBA Executive Vice President and Chief Economist Paul Merski spoke to the Plan’s various points of emphasis, which address issues related to access to capital and other regulatory relief provisions as well as mortgage reform.

Thank you to the almost 2,000 IBAT members who attended the IBAT Regional Meetings around the state. We look forward to seeing you in Austin for Community Banking Day at the Capitol and in Washington D.C. for the 23rd Annual Congressional Visit.

Community Banking 101

Have you ever wondered why investors or customers prefer one type of financial institution instead of another? Or, have you wondered what the differences are between these institutions? If so, IBAT brings you Community Banking 101: The Nuts & Bolts of Banking Summit, April 21-22 in San Antonio. This two-day program is designed to educate attendees about how banking institutions are structured and regulated along with what banks do and how they do it.

Topics of interest include:

  • Types of financial institutions…what makes them different and what makes them tick?
  • Regulatory agencies…what are the differences and what institutions does each agency regulate?
  • What banks do…what are the primary functions of banks, including deposits, payments and lending?
  • Regulations…from a big-picture view, what are the regulations that banks must meet?

Click here to learn more and register.

2015 Five*Star Award

Calling all IBAT associate members: the deadline for IBAT's Five*Star Award has been extended to Friday, March 13, 2015. Don't miss the opportunity to be recognized for your demonstrated commitment to the community banking industry during IBAT's 30th Annual Leadership Conference, June 11-13, 2015, in San Antonio.

Since 2002, IBAT has honored its associate members with the IBAT Five*Star Award, recognizing those companies that routinely provide not just excellent service, but innovative solutions that help community banks grow faster, enhance profits, gain efficiency and SHINE through:

  • Service excellence that provides community banks with the support they can depend upon;
  • Human relationships based upon trust, respect and strong working relationships;
  • Integrity that meets the high standards banks have a right to expect from their trusted suppliers;
  • Never-ending commitment to the success of the community banking industry; and
  • Exceptional value for the products and services provided.

Unlike past years, you do not need a banker nomination to be considered. Don't miss out on your opportunity to SHINE. Click here for full details and application.

Baker Market Update: Mar. 2, 2015

In case you missed it on Friday:

Today is the deadline. Unless the various Congressional factions can work out their differences, funding for the Department of Homeland Security will end after today. Maybe it’s time to call on the persuasive skills of Francis J. Underwood. And while he’s at it, maybe Frank can do something about 4th quarter GDP. We learned this morning that the previously reported annualized growth rate of 2.6% has been revised downward to 2.2%. Maybe the Bureau of Economic Analysis (BEA) should have quit while they were ahead; or at least “less behind” the impressive but apparently unsustainable Q2 and Q3 performances.

Read more in the Baker Market Update.

Fed Survey

A survey released by four regional Federal Reserve Banks (New York, Atlanta, Cleveland and Philadelphia) found that community banks play a critical role in funding small businesses.

According to findings, of the 22 percent of small businesses that applied for credit in the first half of 2014, 34 percent applied to a community bank with 59 percent of those applications being approved. Community banks provided credit to 90 percent of newer small businesses with profits or growing revenue. The survey also showed that larger banks focused credit approvals on mature small businesses.

The full survey can be found here.

Heart of Texas Compliance Officers

The Heart of Texas Compliance Officers (HOTCO) is a newly created association for compliance officers at banks and credit unions in Travis County and surrounding areas. For HOTCO’s first of four meetings in 2015, the topic will be ‘The Secret to a Happy Marriage with Third-Party Vendors’ presented by Karen Neeley. Neeley is well known and highly regarded in the Texas financial institution community in the areas of regulatory and compliance law.

We highly encourage all compliance officers and anyone else involved with third-party vendors in the area attend this informative meeting on March 26, 2015 at 6 p.m. at Morelia Mexican Restaurant in Pflugerville. Additional information can be found here. The cost is $40, which includes dinner, and the RSVP deadline is March 20, 2015. We hope to see you there!

IBAT Career Center

Need a new member for your team? Consider posting your bank’s open positions in the IBAT Career Center. Jobs posted in the IBAT Career Center are open for viewing to all Texas financial institutions as well as employees of IBAT’s 200+ associate members.

Looking to make a move? The IBAT Career Center is free to browse. IBAT members can also post their resumes (confidentially) to the career center for consideration by potential employers. Click here to create a profile and put your resume online.

Currently, there are two featured positions in IBAT’s Career Center. Click here to view postings for:

  • BSA Officer – First State Bank & Trust Company – Carthage, TX
  • Credit Analyst – First State Bank & Trust Company – Carthage, TX

Two IBAT Suggestions Adopted

Last year, IBAT contacted the Department of Banking and the Department of Savings and Mortgage Lending to point out that, although there are rules requiring issuers of access devices to furnish customer notices of basic safety precautions annually, the Finance Code does not require an issuer to send the notice more than once. IBAT suggested the agencies eliminate the annual requirement in the User Notice on ATM Safety Rules for state banks (page 39), state savings and loan associations (page 73), and state savings associations (page 77). The agencies agreed and proposed rule amendments to the Finance Commission at its December meeting, and the Finance Commission adopted the amendments at its February 20, 2015 meeting. IBAT is sincerely grateful that Texas has two agencies regulating the state’s financial institutions that are responsive to the cries for regulatory relief.

The amendments eliminate repetitive annual notice requirements and authorize delivery of notice by electronic means in certain circumstances. In addition, the recommended basic safety precautions are updated to mention online fraud and other relatively new cyber threats and other ATM risks. The proposal would have required resending the notice every time a debit card is reissued (IBAT commented in opposition to that change), but the adopted rule removed that requirement. The idea for this initiative came while researching a banker’s compliance question - keep the calls and emails coming to IBAT’s Compliance Helpline!

Additionally, IBAT recently sent an email to the Office of Consumer Credit Commissioner objecting to a provision in a rule up for adoption at the Finance Commission meeting that would have allowed tax lien lenders to charge points. The Finance Commission adopted the rule without the objectionable provision, which means that tax lien lenders must not charge points.

TechMecca Best of Show Winners

Congratulations to the two Best of Show winners - Verafin and Dell SecureWorks - selected at IBAT’s TechMecca technology show held earlier this month. Verafin and Dell SecureWorks received the greatest number of votes among 11 presenting companies from the nearly 300 community bankers in attendance. Both companies presented during TechMecca’s interactive general sessions, which highlighted products and services that allow community banks to stay technologically relevant, ensure offerings meet customers’ needs and get ahead of emerging trends.

Verafin presented its FRAML (Fraud and AML) detection software, highlighting how this approach creates efficiencies while reducing duplication of work. Dell SecureWorks presented about how its products can help support business growth without sacrificing information security. A special thanks to all of the presenting companies.

Interchange Rule on the Horizon

Last week, a federal judge ruled that American Express violated anti-trust laws by prohibiting merchants from encouraging their customers to use competing cards with lower fees, a process commonly known as “steering.” Visa and MasterCard previously abandoned similar rules following a settlement with the United States Justice Department.

The decision set off a flurry of conjecture that an interchange price war might be looming. “A price war could especially strain community banks and credit unions, if larger banks are able to reach agreements with retailers to steer customers toward their cards,” wrote Guggenheim Securities analyst Jaret Seiberg, as reported in American Banker.

While this decision is just a new wrinkle in the ongoing drama surrounding “swipe” fees, Texas remains the only state to have passed a prohibition on surcharges on debit card purchases. This initiative, championed by IBAT in the 2013 Legislative Session, got renewed attention last week as Texas Senator Charles Schwertner introduced SB 641. As filed, SB 641 would give the Texas Attorney General or the prosecuting attorney in a county authority to assess civil penalties of $1,000 for each violation of the debit card surcharge prohibition. The addition of rulemaking and enforcement authority to the surcharge prohibition is one of the major items on IBAT’s proactive state legislative agenda.

Please be on the lookout in future issues of IBAT's Bottom Line and Legislative Insider newsletters for information about how you can voice your support for SB 641 and other bills of interest.

Call to Grassroots Action

IBAT is calling all Texas community bankers to lend support to the industry through grassroots advocacy at two upcoming events:

If you’ve been with IBAT at any of our Regional Meetings throughout the state, you’ve heard that the timeline to pass significant regulatory reform legislation is short. For this reason, we’re calling upon every Texas community banker to join the cause to make your voice heard in Austin and Washington, D.C.

If you haven't already registered, please do so soon by clicking the links above.

OCC Handbook Removal

Last week, IBAT sounded the alarm after the Office of the Comptroller of the Currency (OCC) published an updated “Deposit Related Consumer Credit” handbook. The source of confusion in the handbook was updated guidance requiring that financial institutions under OCC supervision obtain customer opt-in for overdraft services (across all check and debit), perform ability-to-repay analysis for those services and establish overdraft fees that are "reasonably correlated to the actual cost" of the service.

Following outcry from bankers, the OCC removed the resource from its website, replacing it with the following statement:

“The Office of the Comptroller has removed from this website the “Deposit-Related Consumer Credit” booklet originally posted on February 11, 2015. Since the booklet is not intended to establish new policy, the agency is revising the booklet to clarify and restate the existing law, rules and policy. The agency expects to post the revised booklet within the next two weeks.”

IBAT staff will watch for the updated handbook to be posted to ensure that the issues of concern are resolved. Read more about this in the February issue of Capitol Comments.