Pandora Ads Debut

Are you ready for Community Banking Month? It officially kicks off tomorrow and as reported in last week’s Bottom Line, we want to help your bank celebrate and tout the benefits of community banks to your community.

IBAT created two Pandora ads (listen here and here) with different messages about community banks that focus on Community Banking Month as a time to make the switch. We encourage you to use these ads as part of your bank’s social media efforts in April.

IBAT has also created a Community Banking Month Facebook page. Please “Like” the page and check in daily for interesting community bank facts and articles. Feel free to make your own posts and share interesting information on this page as well.

We’ve written a letter to the editor that you can submit to your local newspaper. It’s simple - fill out the letter, call your local paper and ask for the best email to send a letter to the editor, then immediately email the letter with a brief note. See last week’s story for tips about submitting a letter. Or feel free to call IBAT, and we’ll be happy to assist.

Lastly, Governor Abbott has officially proclaimed April as Community Banking Month in Texas. In his proclamation, the Governor “encourages all Texans to acknowledge the civic contributions of community banks and the role they play in strengthening local economies.” We couldn’t have said it better.

Final Reminder

The new Basel III capital rules that went into effect for all banks on January 1, 2015 allow community banks to make a one-time, permanent opt-out of the changes to the treatment of accumulated other comprehensive income (AOCI) components. The permanent opt-out must be made by banks on their March 31, 2015 call report, and any parent holding company must make the same election as its subsidiary bank. This is a one-time opportunity to opt-out so bankers should think carefully and consult with their accountants before making such a decision.

The general thinking is that most banks will want to opt-out, meaning they elect to continue neutralizing the unrealized gains or losses on available-for-sale debt securities in their regulatory capital ratio computations. However, you should consider your bank’s current capital position as well as its future strategies before determining the election. It is also advised to consult with your bank’s account and financial advisors. Additionally, the FDIC offers a resource to check multiple scenarios of your bank’s Basel III capital ratios.

Comment Submitted to CFPB

On Monday, IBAT submitted its comment letter to the CFPB on the agency’s proposed amendments to the definitions of “small creditor” and “rural and underserved areas” for purposes of certain special provisions and exemptions from various requirements provided to certain small creditors under the CFPB’s rules. The letter begins by reiterating IBAT’s position that in-portfolio loans should be given QM status. We thank the CFPB for several proposed changes, which include raising the origination limit for determining small-creditor status, excluding loans held in portfolio in determining small creditor status, adding certain grace periods for small-creditor determination, expanding the definition of rural, adding two safe-harbors, retaining the definition of underserved and extending the two-year transition period.

The remainder of the letter concentrates on specific examples of the inequitable effects the proposed definition of rural would have on small creditors in counties throughout the state, again suggests that the CFPB define rural as areas outside of large urbanized areas and concludes with a scenario sent to us by the president of an IBAT member community bank.

Action Alert

Chairman Rene Oliveira’s bill to require a borrower to provide a 10 day prior notice to existing lienholders (HB 1936) was heard last Tuesday in the Business and Industry Committee.  The first step in the process is to get this bill out of Committee, and a vote is expected as early as Tuesday.  If this is an important issue to you and your bank, and if you are a constituent of or have a relationship with any of the members of the Committee (see listing below), we encourage you to call and let them or their office know that you are in full support of HB 1936.

As a property tax loan is a priority lien loan, the mere fact that one of your borrowers enters into such a transaction is more than likely a breach of the deed of trust  covenants and loan agreement, and puts that borrower in default.  Further, borrowers are likely not aware of the other options available – an installment program with the taxing entity or an accommodation by the lender.  These options will likely result in a better deal for the borrower, and certainly less expense and expenditure of resources for your bank.  This option benefits not only your customer, but also your bank and your lien position.

Here is the contact information for the Committee.  There will no doubt be further opportunities to eventually contact all members of the Legislature before this process is complete. 


First Name

Last Name



Phone Number










Vice Chair

































The property tax lending industry has a good – and very profitable – thing going, and has again “lobbied up” this session.  Our grassroots and being on the right side of this issue are a winning combination . . . but it will take your engagement to get this passed into law.  

Baker Market Update: Mar. 30, 2014

The term “Sweet Sixteen” means different things to different people. For sports fans, the term conjures up images of hard working student-athletes proudly and fiercely fighting to defend the honor of their respective institutions of higher learning. Right. For others, the term merely refers to those members of the FOMC who are not Janet Yellen. For those sixteen, this week’s inflation report from the Bureau of Labor Statistics was not all that sweet, nor was it all that bitter. We learned on Tuesday that the Consumer Price Index reversed last month’s .7% drop with a .2% rise month-over-month. On an annualized basis, CPI now stands at, uh, zero. If one takes out the volatile food and energy components, the annualized rate stands at a more committee-friendly 1.7%; slightly friendlier than last month’s 1.6% measure.

Read more in the Baker Market Update.

Rural Communities Update

The ongoing debate over how “rural” communities should be defined under CFPB mortgage rules received new attention last week as Senate Majority Leader Mitch McConnell, along with Senators Joe Manchin and Dean Heller, weighed in on the issue in a letter to Director Richard Cordray.

The letter called upon the Bureau to create an appeals process to allow communities excluded from the rural definition to petition for reconsideration of their status. As reported in an earlier edition of the Bottom Line, legislation recently filed by Rep. Andy Barr and Rep. Ruben Hinojosa would force the CFPB to create such a mechanism for appeals.

“Fine-tuning of the rural definition is a priority for us,” said IBAT President and CEO Chris Williston. “IBAT was instrumental in bringing the issue to the forefront of the CFPB’s attention and we support any measure that expands the rural definition. However, IBAT also believes that much of the consternation surrounding the rural definition could be circumvented with an outright granting of QM status to all loans held in portfolio at community banks.”

Teaching Excellence Award

The nominations deadline for the 2015 Teaching Excellence in Financial Literacy Award has been extended to April 15, 2015. 

Don't miss the chance to nominate a local teacher for a $1,000 prize. All elementary, middle, high school and community college teachers are eligible to be nominated. The goal of this award program is to reward individuals who show initiative and innovation in teaching students the importance of financial responsibility. Three teachers will be selected and will be recognized during ceremonies at their schools. Additionally, all three winners will become part of the IBAT Teach the Teacher Program™ Advisory Task Force. Bankers can nominate teachers in their area schools by completing the nominations packet.

Learn More About .BANK

The time to register your bank’s .BANK domain name is quickly approaching. ICBA has partnered with EnCirca to help community banks by offering monthly webinars about the .BANK application process. Topics that will be addressed in this webinar series include:

  • What are the benefits of .BANK domains?
  • How does the .BANK verification process work?
  • What are the launch phases for .BANK?
  • What is the pricing for .BANK?
  • How do banks ensure they get the name(s) they want?
  • How do banks activate their new .BANK domain names?

Additionally, the .BANK registration timeline and pre-screening forms are both now available. To register for a webinar (the next one is March 26), access the pre-screening sign-up form, learn about the associated costs, review the timeline and find a plethora of other information you’ll need to know, visit the ICBA/EnCirca page.

Integrated Disclosures Resources

Peirson-Patterson, L.L.P., an IBAT associate member, developed a free online Interactive Timeline Calendar Calculator to assist in determining time periods for delivery of the soon-to-be required Loan Estimate and Closing Disclosures. Bank lending staff, title companies and realtors can use this calendar calculator when trying to explain to borrowers and others how the new TILA/RESPA Integrated Disclosure Rules impact the closing date. Mike Patterson of Peirson-Patterson was gracious enough to allow IBAT toshare the link with our members.

Additionally, IBAT is offering a two-part webinar series on the new Integrated Disclosure Rules. Part one, now an archived webinar, addresses the loan estimate and you will learn how to complete the new integrated disclosures.Part two, coming up on April 21, will focus on how to complete the closing disclosure, including the similarities and differences from the HUD-1 and HUD-1A forms and final TILA disclosures used today.

Community Banking Month

The month of April marks the celebration of Community Banking Month. This presents a great opportunity to be loud and proud about the many positive attributes of community banks, and IBAT wants to help.

First, we’ve created a Community Banking Month letter to the editor that we encourage you to submit to your local newspaper. It’s simple - fill out the letter, call your local paper and ask for the best email to send a letter to the editor, then immediately email the letter with a brief note to the editor. A few tips:

  • A subject line of “For Consideration: Letter to the Editor/Community Banking Month” will help ensure your email is read.
  • Paste the letter in the email body, don’t send as an attachment.
  • If there are several banks in the same market, please all sign one letter to submit. 

If you have any questions, please call IBAT and we’ll be happy to assist.

Second, IBAT created two Pandora ads with different messages encouraging consumers to switch banks during Community Banking Month. The ads will run in select markets throughout the state. Listen to them here and here.

Last, Governor Abbott has officially proclaimed April as Community Banking Month in Texas. In his proclamation, the Governor “encourages all Texans to acknowledge the civic contributions of community banks and the role they play in strengthening local economies.”

J. David Williams Testimony

“Regulation reaches the level of overkill when it hurts the very consumer it was designed to protect.” That was but one of the many observations offered by former IBAT Chairman J. David Williams, Chairman of Centennial Bank in Lubbock, before the full U.S. House Financial Services Committee last week. Testifying on behalf of ICBA, Williams, along with representatives of the American Bankers Association and the Credit Union National Association, provided an earful to a receptive committee intent on rolling back some of Dodd-Frank’s most harmful provisions.

“I can honestly say that I am having to reject loans in my bank that we have historically made because they can no longer withstand regulatory scrutiny,” Williams said. The financial services panel provided testimony and answered questions from Members of Congress for nearly three hours on a variety of regulatory relief bills that have been introduced in the 114th Congress.

The hearing was a precursor to a full committee markup scheduled tomorrow to address a variety of regulatory burdens including CFPB governance, privacy notices, Qualified Mortgages rural designations and mortgage servicing rules.

“IBAT is hopeful that this testimony will lead to significant regulatory relief for community banks and is grateful to David for the excellent job he did in representing the views of all community banks,” said IBAT President and CEO Chris Williston. “His testimony was compelling and sobering,” he added.

A copy of Williams’ complete testimony can be found here.

To date, legislation has been introduced to address eleven provisions of the IBAT-endorsed Plan for Prosperity. Click here to view a brief memo on progress made in the current Congress.

IBAT Comments

Last week, IBAT submitted two comment letters: one to the Texas Department of Banking (TXDOB) regarding fiduciary accounts (e.g. IRA and ERISA) and another on a petition pending before the Federal Communications Commission regarding the Telephone Consumer Protection Act (TCPA).

In its letter to the TXDOB, IBAT supported the department’s very important proposed change to 7 TAC §3.23, which was proposed to ensure that a state bank seeking to offer trust services can provide certain services reliably and consistently without undue burden to customers and soundness of the institution. An exception in the proposed rule would permit a state bank to serve as the fiduciary under accounts like IRAs and SEPs.

In IBAT’s letter to the FCC, IBAT supported petitioner’s request that where a called party purposefully advertises a cellular number, the party has provided express consent to receive autodialed or prerecorded non-telemarketing calls to that number for purposes of the TCPA. IBAT urged the FCC to grant the petition in order to protect the First Amendment of the Constitution, follow prior FCC precedent and promote public interest.

Baker Market Update: Mar. 23, 2015

Spring has sprung, and many are wondering if interest rates will be popping up along with the daffodils and the henbit. And while we now possess greater clarity about the NCAA bracket and State Department Form O.F. 109, this week’s events haven’t really reduced the uncertainty surrounding the inceptive date of the Fed’s long awaited and long delayed journey to higher rates. We did learn that the doves still rule the roost at the FOMC and just because Chairdove Janet Yellen removed the word “patience” from the Committee’s statement, she went to great lengths, despite her diminutive stature, in assuring all interested parties that the concept remains firmly in place. So what, then, is one to glean from this week’s FOMC meeting and Ms. Yellen’s subsequent press conference? Well, subject to change, we can feel pretty sure that nothing will happen at the April meeting, with a chance that something might happen in June. A June policy shift still looks pretty iffy, even if it “might” be under consideration.

Read more in the Baker Market Update.