EMV Report

Now that October is upon us, so is the EMV liability shift. TIB Card Services released the special report, EMV: Where Are We Now, to commemorate the passing of the liability deadline.

According to the report, percentages of chip-enabled plastics in the U.S. are estimated between 40% and 60% of the total card base. At the same time, the number of merchants using EMV-compatible devices remains low with estimates ranging from 20% to 40% of total merchants. TIB Card Services anticipates these numbers will climb steadily until early November, when the industry will shift focus to manage the strain of transaction growth pressures related to the Christmas season.

The report closes by saying: “Our advice to community banks is to continue to move deliberately toward EMV compliance for both your card and merchant portfolio while taking time to educate your customers on the benefits of this monumental change. We also recommend taking a well-deserved break from EMV projects during the holiday season.”

The full report can be accessed here.


ICBA President and CEO Cam Fine wrote two op-eds addressing issues of deep concern for community banks that were published last week. His op-ed in The Washington Times discusses the need for party politics to end so that necessary provisions, many with bipartisan support, in Senate Banking Committee Chairman Richard Shelby’s regulatory relief bill can move forward to provide community banks the reg relief they need and deserve. 

Fine’s second op-ed, which appeared in The Hill, looks at a new study that confirms the negative impact of debit interchange price caps - just in time for the Durbin Amendment’s fourth anniversary. These results affirm many other findings that price caps do not benefit consumers.

We thank Fine for spreading his eloquent and passionate thoughts on these important topics.

Amicus Filed

IBAT, collaboratively with Texas Bankers Association (TBA) and Texas Mortgage Bankers Association (TMBA), filed a friend of the court letter with the Texas Supreme Court asking it to review a commercial loan case. InBankDirect Capital Finance v. Plasma Fab, a bank premium finance sub mailed a cancellation of insurance policy a day late but actually used its power of attorney to cancel and receive the return premium in accordance with the statutory time frame.

The appellate court held the lender to a standard of strict compliance and appeared to impose a fiduciary duty on the lender as to the POA. Actually, a POA in that situation is for the benefit of the creditor, allowing it to manage the collateral. The lending trade associations are concerned that this approach could be applied in all commercial transactions.


Many challenges and opportunities currently face the payments industry. SWACHA’s Executive Payments Summit is designed to elevate this conversation with the input of industry leaders and experts who are not only fostering change within electronic payments, but also providing knowledge to help others shape the future.

Sessions include the following topics:

  • Cybersecurity Protection: Is It Moving Fast Enough?
  • Charting a Path to Lift Off? Understand the Shifting Economic Winds
  • Same Day ACH: Moving Payments Faster
  • Leading Through Times of Change

Join SWACHA for this one-day event on November 5, 2015, 8 a.m.-4:45 p.m., at the Irving Convention Center in Irving, Texas. Registration and additional information can be found here.

Good News on the TRID Front

Last week, IBAT President and CEO Chris Williston, along with the executives of Texas Land Title Association and Texas Bankers Association, signed an open letter to the U.S. House of Representatives in support for H.R. 3192 (Homebuyers Assistance Act). If passed and signed by the President, this legislation would provide a hold-harmless period until February 1, 2016 for mortgage lenders making a good-faith effort to comply with the CFPB's new TILA-RESPA Integrated Disclosure (TRID), which became effective last Saturday, October 3, 2015. The letter specifically recognizes Reps. French Hill and Brad Sherman for introducing the bipartisan legislation. 

During the regulatory panel held at IBAT’s Convention two weeks ago, all of the representatives of the federal banking regulators (OCC, Fed and FDIC) said that until the end of the year they will focus more on the good-faith efforts community banks have taken to prepare for TRID rather than the results. On Friday, the FDIC confirmed its comments in guidance issued regarding its initial supervisory expectations with TRID. Lastly, on September 29, CFPB Director Cordray appeared before the House Financial Services Committee to say that the CFPB was not looking for perfection on day one. While these statements assure some level of regulatory relief, they do not lessen the possibility of litigation, which would likely cause unnecessary and costly delays for consumers, and a disruption of the housing market.

“Texas community banks and their settlement service providers have made good-faith efforts to comply with TRID by the implementation date, but they need time to test these efforts in real-world settings without the threat of litigation,” said Williston. “While we appreciate the regulators’ soft-landing approach to TRID, borrowers and the mortgage lending industry need the four-month hold-harmless provision of H.R. 3192 to openly test and tweak lenders’ and servicers’ good-faith efforts without fear.”

As reported in last week’s Bottom Line, IBAT joined the same associations on a letter regarding H.R. 3192 to House Financial Services Chairman Jeb Hensarling. IBAT encourages members to write and call your members of Congress and urge their support of H.R. 3192.

Highway Funding

In a letter sent last week to Texas lawmakers serving on the House Ways and Means Committee, IBAT President and CEO Chris Williston and IBAT Executive Vice President Steve Scurlock urged opposition to a proposal to partially fund future highway spending by reducing the dividends paid on Federal Reserve stock.

“[This proposal] hits a large percentage of community banks at precisely the time they are struggling to keep up with a continuing avalanche of regulatory burden and costs emanating from a financial crisis they neither created nor profited from,” the letter said.

Williston and Scurlock further called the proposal “a tax on the financial sector to fund a completely unrelated aspect of government” and expressed belief that raiding Fed dividends would “further impact our already impaired ability to create economic activity and jobs through lending and investment in our communities.”

IBAT encourages members who live or work in the Congressional district of any of these members to follow up with personal letters urging opposition to this misguided proposal.

A full copy of IBAT’s letter can be found here.

Cybersecurity Awareness

As October is National Cybersecurity Awareness Month, President Obama issued a Presidential Proclamation that “called on the people of the United States to recognize the importance of cybersecurity and to observe the month with activities, events and training that will enhance our national security and resilience.”

Texas Banking Commissioner Charles Cooper echoed that sentiment when he said, “As a societal threat, we all have a civic duty to help reduce cyber risk. National Cybersecurity Awareness Month is an easy way for all of us to raise awareness of the threats and the measures needed to make cyber space safer.”

Many resources exist to help raise awareness among your employees and customers. State and federal bank regulators, as well as many other associations and organizations, offer cybersecurity information to be used and shared this month, as well as throughout the year.

The OCC issued a press release highlighting cybersecurity awareness, and the FFIEC provides information, including a cybersecurity assessment tool. Other resources include:

Two upcoming education programs covering cybersecurity are Bank Operations Institute (Oct. 11-16, 2015) and Certified Community Bank Director (CCBD) Program (Oct. 29-31, 2015).

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.

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.

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.