IBAT News

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.

Baker Market Update: Feb. 23, 2015


With the observance of President’s Day on Monday, this has been a short week. Even so, it still lasted longer than the cease-fire between Russia and Ukraine. This week also marked yet another year in which a Labrador Retriever was not named Best in Show by the Westminster Kennel Club. A spokesman for the WKC reaffirmed that it is not at war with Labs.
 
The U.S. economy, however, sure looks like it’s at war with inflation. We learned on Tuesday that the Producer Price Index (PPI) fell by .8% last month and stands at zero (0.0) on a year-over-year basis. Read more in the Baker Market Update.

Harvard Study


A new study by Harvard University, “The State and Fate of Community Banking,” takes an in-depth look at the banking industry, particularly community banks compared to larger regional and national banks. Not surprising to anyone reading this, the study shows that community banks provide a disproportionate amount of service to key segments of the lending market - agricultural, residential mortgage and small business loans.

Looking at the impact of Dodd-Frank on community banks, the authors conclude that since its enactment, community banks have lost market share at twice the rate they did prior to it. They note that many of the regulations enacted as part of Dodd-Frank are not linked to the size of the financial institution so regulatory costs fall heavier on smaller banks. This is a major contributor to the industry consolidation of recent years. Listed below are suggested policies that could help promote a more competitive banking sector:

  • Reform the regulatory process to mitigate unintended consequences,
  • Expand community banks’ regulatory exemptions and
  • Improve existing regulation.

The full study can be found here.

ICBA Board Nominations


ICBA recently announced the nominees for its 2015-2016 Board of Directors. On the slate is Scott Heitkamp - ValueBank Texas (Corpus Christi) President, Chief Executive Officer and Director – nominated as Vice Chairman. Additionally, Cynthia Blankenship – Bank of the West (Grapevine) Vice Chairman and Chief Operating Officer – is nominated for ICBA Consolidated Holdings Chair. 

ICBA’s Board of Directors will vote on the nominations in early March. Congratulations to Scott and Cynthia on this well-deserved recognition!

Call for Nominations


Nominations are now being accepted for the 2015 Teaching Excellence in Financial Literacy Award. The IBAT Education Foundation-hosted program recognizes elementary, middle and high school teachers who use innovative, fun and effective methods to teach financial education in the classrooms.

Three award recipients from across the state will be selected, and each will receive $1,000. Additionally, IBAT and local community bankers will recognize the winners during ceremonies at their schools. The goal of this award program is to celebrate teachers who provide their students with the foundation necessary - understanding savings and credit, how to budget and the importance of making informed decisions - to make sound financial decisions for the rest of their lives.

Bankers can nominate teachers from their area schools by completing the nomination packet.

Deadline for submissions is March 31, 2015.

Credit Quality


After the fallout of the financial crisis and changes implemented by Dodd-Frank, many bankers have noted an increase in scrutiny of credit quality. In the recent white paper 2015 Regulatory Roadmap, offered by Deloitte, the firm provided recommendations for banks to consider as credit quality standards and scrutiny tightens. Among them:

  1. Make sure your management and board of directors understand the new expectations on aggregation, portfolio stress testing, leveraged lending and mortgage underwriting;
  2. Discuss with regulators what they are seeing as developing practice elsewhere in the industry; and
  3. Know your concentrations of credit risk: individual, product, geographic. Understand where contagion may arise when credit issues occur. Set limits for the firm and ensure that they are consistent with the risk appetite.

In two upcoming educational events, the Credit Analysis Summit (March 18)and Advanced Credit Analysis Summit (March 19-20), IBAT will address these and other concerns. Please consider having a member of your team participate in either program.

Senate Reg Relief Likely


In a hearing of the Senate Banking Committee last week, Chairman Richard Shelby laid out his plans to advance regulatory reform legislation for the benefit of community banks and their customers. Shelby said that the Senate was “long overdue” in revisiting certain aspects of Dodd-Frank and mentioned that “there are many on both sides of the aisle that believe improvements can and should be made.” Ranking Member Sherrod Brown echoed Shelby’s sentiment but cautioned against attaching regulatory reform legislation to “must-pass” bills or pairing them with “goodies” for Wall Street.

With Shelby’s comments and Brown’s support, the smart money is on some regulatory reform legislation being introduced in the Senate before the end of February. What will make it into the Senate bill, however, is still anyone’s guess.

As mentioned earlier in the Bottom Line, IBAT is optimistic that a regulatory relief bill incorporating many of the provisions of the ICBA-produced and IBAT-endorsed Plan for Prosperity will move quickly in the first six months of this Congress. For that reason, IBAT members are encouraged to stay tuned in to the legislative process by signing up for legislative text alerts. You can do so by texting “IBAT Alerts” to 40404 from your mobile device. Additionally, please consider participating in IBAT’s 23rd Annual Congressional Visit in late April. This will provide an opportunity for you to meet with lawmakers to directly impact the progress of legislation.

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