Two Congressional committees went to work last week discussing the future of card technology in the wake of recent high profile data breaches at Target and Neiman Marcus. The conclusion - a transition away from magnetic strip cards is just one step towards a more secure payments environment but would not have prevented the type of breaches that occurred in late 2013.
"The EMV chip is an extremely effective method of reducing counterfeit and lost/stolen card fraud in a face-to-face payments environment," said Troy Leach, security standards architect for the Payment Card Industry Council, "Protection from malware-based attacks requires more than just EMV chip technology."
Experts disagreed on acceptable remedies for weaknesses in the security protocols of retailers, with some calling for more education and others suggesting that the Federal Trade Commission be given greater authority to assess financial penalties on those who are breached.
Hearings on the impact of the Target breach on Texas businesses are scheduled for March 27 in the Texas House of Representatives' Business and Industry Committee. In response to the committee's request for information, IBAT and the Texas Bankers Association will be conducting a joint data collection project, polling community bankers on the financial impact of the breach. Please be on the lookout for that survey and help us by planning to participate.
Nominations are still being accepted for the 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 downloading and completing the nominations packet.
The 2014 primary election results are in the books. Turnout was down across the state, with some 546,000 Democrat and 1.5 million Republican votes cast, a 20% and 10% reduction respectively from 2010 numbers - not unusual in a mid-term election. As is usual, there were some expected outcomes, along with a few surprises. What follows is a high level recap of the results, which will be as devoid of editorial commentary as possible. For those of you wishing to look at more granular data, we are providing links to the Texas Secretary of State election results and the Texas Tribune brackets.
Click here to view IBAT's full breakdown of primary contests of concern.
IBAT will be assessing the various runoffs over the coming weeks, and will be seeking your advice and counsel in determining which of these candidates to support going forward. We very much appreciate your engagement in this process, and are hopeful that you will provide any insights you may have in your local or statewide races.
- An Accounting Update for Community Banks;
- Phantom Stock: Is it the Right Strategy for Your Executive Compensation Plan?;
- Protecting your Bank from a Hacker's Favorite Tool; and
- Meet IBAT's D.C. Team.
Inching towards resolution on drastic premium increases for those covered by the National Flood Insurance Program, the U.S. House of Representatives last week passed the Homeowner Flood Insurance Affordability Act. The legislation would:
- reinstate grandfathered status for covered properties,
- repeal the home-sale and new-policy rate-increase triggers,
- provide a refund for people who have realized large premium increases due to the purchase of a pre-FIRM subsidized home without the full transparency from the Federal Emergency Management Agency as to the new rate structure, and
- require FEMA to complete an affordability study and to propose an affordability framework to help homeowners cope with dramatically higher premiums.
Missing from the House bill was the all-out four year delay of premium increases which was included in the Senate bill passed in January. The Senate must now decide whether to take up the House bill or reconcile it with their own.
Please note that candidates supported by IBAT are marked with an asterisk.
|Governor||As expected, Greg Abbott* and Wendy Davis will continue to duke it out until November 4 as their parties' nominees for CEO of Texas.|
|U.S. Senate||Senior Senator John Cornyn* easily won in a field of eight with 59% of the vote. The Democrats will have a runoff on May 27 between David Alameel (49%) and Kesha Rogers (21%).|
|U.S. Congress||No big surprises here as usual. IBAT friend Pete Sessions* handily defeated what was considered a serious challenge from the right in CD32. Longtime Congressman Ralph Hall* (CD4) fell just short of a majority, and will be in a runoff with John Ratcliffe. In the seat left open due to Congressman Steve Stockman's run for the Senate (CD36), Brian Babin and Ben Streusand survived a field of 12 and will be in a runoff. On the D side, freshman Congressman and friend Marc Veasey* easily won in CD33.|
|Statewides||Incumbent Lt. Governor David Dewhurst* goes into a runoff with Senator Dan Patrick. Patrick garnered 41% of the vote to Dewhurst's 28%. For Attorney General, two friends will be in the runoff - Senator Ken Paxton (44%) and Representative Dan Branch (33%). Senator Glenn Hegar was a whisker away from an outright victory in the Comptroller's race, with some mail-in ballots still outstanding. Runner-up Representative Harvey Hilderbran graciously conceded, which gives Senator Hegar the Republican nomination. Two former state representatives will vie for Ag Commissioner on the R side - Sid Miller (35%) and Tommy Merritt (21%). For the Dems, newcomer Jim Hogan and Kinky Friedman will square off in the May runoff. The three contested races for Supreme Court were won by IBAT supported candidates - Hecht*, Brown* and Boyd*.|
|Texas Senate||One of the bigger surprises of the evening was the narrow defeat of longtime public servant John Carona* of Dallas in SD16 by Donald Huffines. Incumbent Senator Bob Deuell* (SD2) will be in a runoff with Bob Hall and, in SD10, former state rep Mark Shelton will face Konni Burton.|
|Texas House||Eight House incumbents were defeated in the primary - George Lavender* (HD1), Lance Gooden* (HD4), Ralph Sheffield* (HD55), Naomi Gonzalez (HD76), Lon Burnham* (HD90), Diane Patrick* (HD 94), Linda Harper-Brown* (HD105) and Bennett Ratliff* (HD115). The IBAT PAC contributed to two candidates who were defeated in open seat races - Bob Senter* lost to Wayne Faircloth in HD23, and Austin Keith* to Brooks Landgraf in HD81. There will be 11 runoffs to determine who will be running for House seats in November. IBAT was involved financially in three of these: incumbent state rep Stefani Carter* faces Linda Koop in HD102; community banker Will Metcalf* vs. Ted Seago in HD16; and DeWayne Burns* will run against Philip Eby in HD58.|
After the announcement [Friday] morning by the Bureau of Labor Statistics (BLS) that the 175k increase in Non-Farm Payrolls (NFP) exceeded expectations by 30k, the blame-it-on-the-weather excuse hasn’t gotten much of a mention. Maybe it should. Despite the higher than expected number of new jobs, February’s performance was still well below the 189k average over the last twelve months. The number of unemployed persons increased by 223k and the Unemployment Rate rose by a tenth to 6.7%. In what might pass for relatively good news, neither the Employment-Population Ratio (58.8%), nor the Labor Force Participation Rate (63%) went down. Spring is in the air!... Read more in the Baker Market Update.
This presentation is intended to provide you with the necessary analysis for documenting loan workouts through the following steps:
- Analyzing and Understanding the Credit
- Strategizing the Loan Workout
- Ensuring Mutual Understanding of Loan Workout Terms
- Documenting the Loan Workout
Nick Jellum, Anastasi Jellum, P.A.
Nick Jellum is the President of Anastasi Jellum, P.A. and focuses his practice on advising the firm's financial institution clients throughout the Country on all aspects of commercial loan transactions, from loan documentation to loan workouts, collections and recovery. He has extensive experience particularly as related to U.S. Small Business Administration (SBA) loan documentation and liquidation.
Nick is active in the National Association Government Guaranteed Lenders (NAGGL) and has presented at numerous NAGGL national conferences and webinars. Nick is also a member and active in the National Association of Development Companies (NADCO). He is also involved in additional banking industry trade associations including the Independent Community Bankers of Minnesota (ICBM), for which he serves on the Legislative Committee, as well as the Minnesota Bankers Association (MBA).
For additional information and to register, please click here.
IBAT is pleased to announce that the updated Fall/Winter edition of the GreenBook (a.k.a. The Texas Financial Institution Directory™) is now available as a FREE download from our website. The Fall/Winter edition contains contact and performance data based on the June 2013 call reports. Last year, IBAT began offering the GreenBook as a free, fully searchable, PDF which allows members to keep the book on their computer desktop or on any mobile device.
We invite you to follow this link and provide us with a bit of information about yourself. Upon submission, you'll receive the link to download the 2013/2014 GreenBook.
The 2013/2014 GreenBook is made possible through the generous support of SNL Financial. If you are interested in learning more about SNL Financial, please contact Julie Jones at firstname.lastname@example.org or 434-951-4419.
IBAT Chairman Jay Gober, Commissioner Charles Cooper of the Texas Department of Banking and IBAT staff are busy preparing for the upcoming Regional Meetings (Tour de Texas), beginning in two weeks. We will be traveling to 8 Texas cities in March to conduct briefings on our regulatory and legislative agenda.
Round 2 of the Tour, March 11-13, includes stops in Galveston, Schulenberg, Harlingen, Corpus Christi, Houston, Kilgore, Sulphur Springs and Dallas.
We encourage you to take a few minutes and register for one or more of the meetings. This will be an opportunity for you to learn about our efforts and help us fine-tune our legislative agenda for 2014.
Click here for additional information and to register.
Anticipated action to provide relief from catastrophic premium increases on participants in the National Flood Insurance Program was delayed last week as House Republicans balked at the prospect of rubber stamping the previously-passed Senate version of the bill.
Preceding the vote, the editorial board of the USA Today lashed out at the plan, which would gut the Biggert-Waters Flood Insurance Reform Act of 2012 and delay premium increases for four years.
"Fixing the flood insurance program is vital for fiscal reasons. A government that is $17 trillion in debt can't simply borrow more every time a significant storm hits," said the USA Today editorial board. The piece was countered by one written by Senator Mary Landrieu of Louisiana.
The House has rescheduled to take up the bill this week.
More than 150 community bankers joined together for a compliance update in Castroville last week, attending one of IBAT’s Cluster Programs. Bankers and Directors from Castroville State Bank, D'Hanis State Bank, First State Bank of Uvalde, Hondo National Bank and Lytle State Bank attended the training session led by expert trainer Mary White.
IBAT Cluster Programs are an educational format where all employees from numerous banks in a close geographic area are invited to participate in a live 2-hour evening workshop on a banking hot topic. Besides the excellent training they'll receive locally, the benefit for IBAT member banks is they can send an unlimited number of employees and directors for the flat rate of $890.
Upcoming Cluster programs are scheduled for Brenham, San Angelo, Fort Stockton, Marfa, Harlingen, Kerrville and Schulenberg.
A few weeks ago you received information from our IBAT Leadership Division's Board of Directors asking for your help with IBAT’s annual March PAC Drive. Many of you have already been busy helping to raise funds for the IBAT PAC and IBAT FedPAC and we thank you - especially the employees of First National Bank of Ballinger (pictured)!
We don't have to tell you that political campaigns are a fact of life and have become increasingly expensive. That is why we are asking our members to commit to raise a minimum of $1,000 per bank for the IBAT PAC or IBAT FedPAC.
You, as a community banker, are our one and only focus as we work to elect those men and women on both the state and federal levels who understand and appreciate the importance of community banks. We need and appreciate your support of the industry through your contributions to the IBAT PAC and IBAT FedPAC.
And don't forget that those member banks that raise a minimum of $1,000 will have their bank put into a drawing for a BBQ dinner prepared and served by your IBAT staff at a location of your choosing. Donate here.
For more information on ways you can help the PAC, click here.
IBAT's 2014 Sales Culture Summit is scheduled for March 25-27, in San Antonio. The program can help those who are attempting to set up a sales environment for the first time, as well as those who are satisfied with the structure of their sales environment, but want to make improvements.
The summit leader, Robert N. Erickson, President of Bank Training, Waukon, Iowa, will cover key program topics such as designing a bank sales environment, attitude, skills and teamwork, while answering tough questions like:
- What essential components of a bank’s sales structure must be in place in order to establish an effective long-term sales environment within the bank?
- What are the three core concepts regarding the use of incentives in the bank environment?
- How do we motivate all employees to be involved in sales to the best of their abilities?
Community bankers are well aware of the significant impact that the Dodd-Frank Act has had on their business since 2010. Now, thanks to researchers at the Mercatus Center of George Mason University, there is more empirical data to prove the effects of the law on community banks and their customers.
According to the report:
- 83% of responding community banks indicate a rise of more than 5% in total compliance costs since the passage of Dodd-Frank;
- Approximately 25% of banks surveyed are contemplating mergers;
- The median number of dedicated legal/compliance personnel increased from 1 to 2, with 27% of respondents indicating the intention to add more;
- Of banks below $200 million in assets, 14.3% anticipate discontinuation of residential mortgages;
- Banks that identified the Federal Reserve as their primary regulator reported the most substantial changes in compliance costs.
"The survival of small banks is important because they are particularly well-suited to serving small communities, small businesses, and borrowers with unique needs," the report concluded. "Regulatory burdens on small banks translate into limited options for consumers. Federal policy can support small financial institutions by freeing them from regulatory burdens that impose costs without corresponding benefits."
"IBAT has been forcefully asserting the disparate impact of Dodd-Frank and other legislative and regulatory initiatives on the community banking sector for years," said IBAT President and CEO Chris Williston. "This study validates our assertions, and will be valuable in our ongoing efforts to bring some relief to the present untenable environment."