Abolishing the CFPB

The Consumer Financial Protection Bureau (CFPB), which last week “celebrated” its fourth year in existence, was hit with a barrage of scrutiny in the United States Congress. First, Senator Ted Cruz and Representative John Ratcliffe introduced legislation (S. 1804, H.R. 3118) to abolish the Bureau, saying that while the Bureau was intended to “help consumers by regulating and reigning in larger financial institutions,” in actuality, “big banks have only gotten bigger and the number of smaller banks and options for consumers have only decreased.”

Separately, Chairman Richard Shelby of the Senate Banking Committee progressed legislation that would place the Bureau within the appropriations process and replace its director-driven governance model with a five-member commission. While Shelby’s amendment is not expected to hold up in its entirety, its place in the subcommittee-approved bill provides an opportunity for debate on meaningful regulatory relief measures for community and regional banks.

In survey results released by SNL Financial last week, 33% of respondents identified the creation of the CFPB as the byproduct of Dodd-Frank that has most impacted their bank.

“Despite lacking direct supervisory power over community banks, the CFPB has left an indelible mark on the regulatory environment overshadowing community banks,” said IBAT President and CEO Chris Williston. “While we support efforts to hold the too-big-to-fail banks responsible for their misdeeds in the marketplace, we believe consumers are under equal threat by having credit availability and banking services limited by CFPB rules,” Williston added. “It’s nothing short of regrettable that the actions of the agency cannot be focused on where the real problems exist.”

New Proposed Tax

The U.S. Senate was hard at work this weekend crafting a highway spending bill that includes a plan to slash dividends paid by the Federal Reserve to member banks with more than $1 billion in assets. Under the plan, the dividend would be reduced from 6% to 1.5%, with the savings being reallocated to highway spending. The established dividend rate of 6% has been in place for more than 100 years. Member banks are required by federal law to buy and hold a set amount of stock in the Federal Reserve System. The stock may not be pledged or sold.

“Applying this tax to any bank is another blow to an industry already crushed with the costly impact of regulatory burden,” said IBAT President and CEO Chris Williston. “Lawmakers need to scrap this proposal altogether,” he added.

If you would like to weigh in on this proposal, please do so using ICBA’s customizable messaging platform.

41st Annual Convention

IBAT’s 41st Annual Convention, themed “It’s Island Time in Galveston,” will be here soon. We officially invite you to join us in Galveston, September 19-22, 2015, for a variety of educational sessions, networking events, entertainment that can’t be beat, opportunities to contribute to the IBAT PAC and keynote speakers that will make you think long after their sessions.

Keynote speaker Joe Dittmar will discuss “Lessons Learned from a Date with Destiny/An Inspirational and Historic View of 9/11/01.” This session is not to be missed as Dittmar presents an intriguing and gripping perspective on what really happened before, during and after the terrorist attacks. He will also share concepts and ideas about what we learned that day and what lessons we can continue to teach.

Registrations received on or before August 7 are eligible for early bird pricing. August 14 is the cut-off for the special room rate at both the San Luis Resort, Spa & Conference Center and Hilton Galveston Island Resort. Space is limited and will be available on a first-come, first-served basis. We encourage you to register today and secure your accommodations. Additional Convention information can be found here.

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.

Baker Market Update: July 27, 2015

It’s the dog days again, and things are heating up. With the winter season getting much of the blame for 2015’s economic  malaise, should it then follow that summer gets the credit for macro-prosperity? Well, first let’s see if we can find some. Prosperity, that is.
The sellers of Existing Homes might be feeling pretty prosperous this week with the announcement that a 3.2% increase was notched in that measure last month; a pace of growth that more than tripled market expectations. Unfortunately, there’s a yin for every yang and New Home Sales got yinned down by 6.8% in June. Home prices in general got a bit of a boost as the Federal Housing Finance Agency (FHFA) announced that for May, residential property prices rose by .4%. More price data will be available next week when a new Case-Shiller Home Price Index report comes out on Tuesday. Coming out of the Kansas City Fed today, however, was a disappointing report for manufacturing’s prosperity. Their Index of Manufacturing Activity came in at a value of -7.  Minus signs are a definite yin.

Power of A Award

Independent Bankers Association of Texas (IBAT) has earned a 2015 ASAE Power of A Gold Award for its Teach the Teacher Program, giving Texas high school teachers, who are mandated to teach financial management to 12th grade students, an understanding of and confidence in the course material.

IBAT’s Teach the Teacher program responds to an urgent local need. Consumers in Texas rank among the lowest in average credit score (48th nationwide), household net worth and home ownership. In 2005, the Texas Legislature mandated the Texas Education Agency (TEA) that practical financial management be taught in the 12th grade within social studies/economics curricula. Because most faculty assigned to teach financial education lacked understanding/confidence in the material, the IBAT Education Foundation developed the program.

“Congratulations to IBAT for helping make the world a better place,” said Hugh “Mac” Cannon, MPA, CAE, Executive Director of ACEC of Metropolitan Washington, and chair of the Power of A Awards Judging Committee. “Their program exemplifies how associations make a difference every day – not just to the industry or profession they represent, but to society at large.”

IBAT’s Teach the Teacher Program is now a statewide program. Because of the number of community banks across the state, in both rural and urban areas, IBAT has been able to leverage community connections, school board involvement and additional resources to bring this program to each of 20 TEA Education Service Centers. Through 2014, IBAT provided the six-hour live program to 13 of the 20 regions, with plans to complete the final seven regions in 2015.

“By training teachers, who have students' trust and respect, we can dramatically improve the personal financial education outcomes,” said IBAT President and CEO Chris Williston.  “The association is attacking the national problem of financial literacy on a local/statewide level by connecting local community bankers, local teachers, local schools, and ultimately, local students.”

ASAE’s Power of A (association) Awards, the industry’s highest honor, recognize the association community’s valuable contributions on the local, national and global level.  The Power of A Awards reward outstanding accomplishments of associations and industry professionals for their efforts to enrich lives, create a competitive workforce, prepare society for the future, drive innovation and make a better world.

Appraisals Process

Join the IBAT Education Foundation and Merrill Reynolds in Dallas on August 27 for the 2015 Appraisals Summit. This timely course will provide attendees with the general knowledge required to understand and evaluate a commercial real estate appraisal as a key component in the credit risk assessment process for commercial real estate loans. 

Recent examinations indicate that regulators are spending more time looking at the bank’s appraisal process, including the prepared appraisals. According to the Texas Department of Banking, some of the most common appraisal and collateral evaluation deficiencies noted during recent examinations include:

  • Common errors and omissions in the review of appraisals/evaluations (new for the 2015 Summit);
  • Timeliness of annual appraisals/evaluations on Other Real Estate Owned; and
  • Failure to obtain updated appraisals/evaluations in distressed markets when commercial real estate loans are renewed.

Learn more and register here.

2015 Convention

Registration is open for IBAT’s 41st Annual Convention. Now is the time to take advantage of the early bird pricing - expiring on August 7 - and register for the event. For the first time in more than 30 years, the Convention will take place at the Galveston Island Convention Center, September 19-22.  To learn more, you may download a detailed PDF brochure 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.

Ready for Dove Season?

Please join us in Leadership Division Region 2 for a sporting clays tournament on August 27 at:

San Angelo Claybirds
Association Range
12026 US Highway 67 South

1:30 p.m. – Registration
2:00 p.m. – Start Time
5:30 p.m. – Barbecue Dinner (sponsored by CalTech)


(Trap, skeet, 5 stand and sporting clay ranges open at 1:00 p.m. at shooter’s expense)
Tournament with dinner: $85 per person
Tournament open to bank employees, customers, board members and sponsors.

Fee includes shells and meal. Shooters need to bring their own shotgun (auto, over/under or double barrel) and eye protection.
Golf/Hunting carts welcomed.

Sponsorships are available. Contact Joseph Thomas (Texas State Bank, San Angelo) at 325-944-7533.

Please join us in Leadership Division Region 10 for a sporting clays event on August 27 at:

Boswell-Porter 4-H Range in
Snook, TX
7676 County Road 247

3:00 p.m. - Registration
4:00 p.m. - Start Time
Prizes, dinner and drinks will follow.


The event is arranged to assist IBAT members in networking at the local level and to raise funds for the IBAT Legislative Fund in order to continue the fight in Washington. The event is open to all IBAT bankers, directors and affiliates.

Registration fees (include shotgun shells and dinner):

$125 per person (4 man team)
$25 per person for networking, dinner and drinks only (non-shooters)
Sponsorships are available at the following levels:

Gold: $500 | Silver: $250 | Bronze: $100

Mobile Alerts Update

Federal Communications Commission (FCC) rules implementing the Telephone Consumer Protection Act require senders to obtain prior express consent from consumers before sending autodialed messages, text messages and prerecorded messages placed on landline phones.

The American Bankers Association (ABA) filed a Petition for Exemption asking the FCC to exempt messages concerning:

  1. “transactions and events that suggest a risk of fraud or identity theft;
  2. possible breaches of the security of customers’ personal information;
  3. steps consumers can take to prevent or remedy harm caused by data security breaches; and
  4. actions needed to arrange for receipt of pending money transfers.”

In its TCPA Omnibus Declaratory Ruling and Order, the FCC granted exemptions for all four categories of messages sent by financial institutions. On December 8, 2014, IBAT submitted a comment letter supporting the ABA petition.

Flag Display

Please be advised by the notice below that President Barack Obama has directed that flags be flown at half-staff until sunset on Saturday, July 25, 2015, in honor of the victims in the recent attack on military recruiting personnel in Chattanooga, Tennessee.   As such, all flags in Texas should be lowered to half-staff for the duration of this period to comply with the President’s directive.

"The President has issued a proclamation in honor of the victims of the tragedy in Chattanooga, Tennessee, which directs the flags be lowered to half-staff beginning immediately until Saturday July 25, 2015 at sunset."

Consumer Tips - July 2015

IBAT’s July Consumer Tips publication that covers the ABCs of buying your first home is available online. Buying a first home is one of the most exciting, and often overwhelming, experiences of one’s life. No matter your age or stage in life, becoming a homeowner is a huge milestone.

We encourage you to share this helpful information with your customers.

Dodd-Frank Turns 5

Today marks the fifth anniversary of the enactment of the Dodd-Frank Act - a date which will live in infamy for community bankers. Five years and tens of thousands of pages of rulemakings later, we continue the fight to protect community banks from the blowback caused by the misdeeds of those deemed “too big to fail.”

As reported in last week’s issue of the Bottom Line, IBAT took to Capitol Hill again to push for a more balanced, reasonable and workable regulatory approach for community banking. While a frustrating process, we do believe there is progress on several fronts as the Senate Banking Committee is working to craft a compromise agreement to its financial reform legislation and the House Financial Services Committee plans to mark up a menu of regulatory burden relief bills at the end of the month. Most encouraging is that in our meeting with FDIC Vice Chairman Tom Hoenig, we were pleased to hear that his “bifurcation” plan was being discussed in Congress.

Further, Congressman Roger Williams introduced H.R. 3048 last week. We were pleased to have played a role in the introduction of this bill. This concept was brought to us by our counterparts in the credit union association, whose members are dealing with many of the same frustrations and expenses of regulatory burden as we are. As detailed in the summary, the CFPB has the authority under Section 1022 of Dodd-Frank to exempt smaller (under $10 B) institutions from particular rules. This bill would require the CFPB to affirmatively include small institutions, based upon justification and evidence of patterns or practices, or they would otherwise be exempt. We appreciate the efforts of Jeff Huffman of the Texas Credit Union Association, and Congressman Roger Williams and his outstanding staff.

If you have the opportunity to invite your respective members of Congress to your bank over the August recess to see firsthand the ridiculous level of compliance expected of community banks, you are encouraged to do so.

Photo (l-r): IBAT Executive Vice President Steve Scurlock and President and CEO Chris Williston witness the signing of H.R. 3048 by Congressman Roger Williams.

Dell Flash Sale

Dell is pleased to offer exclusive discounts for IBAT members, including 45% off Optiplex desktops ordered before July 31, 2015 with coupon code 15XM?498ZLDML7

Other special promotions currently available include:

  • Save an additional 10% on PowerEdge servers $1299 and more with coupon code 0N25ZQG3C75KSS
  • Save an additional 10% on Dell Precision Workstations with coupon code 26MCRQ5LQ31S20
  • Save an additional 5% on select Dell electronics and accessories with coupon code W42L1$VV$55VWZ

IBAT members save an average of 30% on orders with Dell. To access these discounts, visit the IBAT landing page on Dell’s website or contact Bryan Horten, IBAT’s Strategic Account Manager, at 512-942-9120 to order. As a reminder, whenever ordering Dell equipment please be sure to include the unique Dell/IBAT link number GS126658178.

2015 Salary Survey

Don’t forget that the data collection period for IBAT’s Texas Community Bank Salary and Compensation Survey is open now through July 31, 2015.

Why participate? 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 and send back via fax.

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.

Baker Market Update: July 20, 2015

In my 36 years at The Baker Group, I have learned that just because I say it is so, it is not. Therefore, let me try to again revise the course of history with my comments.
We have seen that the events discussed last week happened quickly. Greece ratified an agreement with the ECB, demanding more austerity, and Mario Draghi said he didn’t see Greece leaving the Euro, though comments from Germany seemed to reflect different thinking. In the wake of all this, we watched the Euro weaken, the dollar strengthen, and the Greeks riot in the streets.