The Independent Bankers Association of Texas filed an amicus brief in a Texas Supreme Court case (Sims v. Carrington Mortgage Services, LLC) that will have a far reaching effect on home equity loan modifications. The three issues before the court are whether a lender may:
- capitalize delinquent obligations (past due interest, insurance premiums, and taxes) when modifying;
- modify the loan notwithstanding that the debts secured by the homestead are greater than 80% of the current value of the homestead; and
- modify each time a borrower defaults without effectively converting the closed-end loan into an open-end loan.
To follow Texas law and protect troubled debtors from foreclosure, the Supreme Court should answer each of these questions in the affirmative.
"For generations, Texas community banks have used modifications to work with troubled borrowers," remarked Karen Neeley, IBAT General Counsel. "If that tool is taken away from them when dealing with defaulted home equity borrowers, the resulting lack of flexibility will limit the options lenders can offer borrowers to avoid foreclosures."
In the November 19th edition of the Bottom Line, we joined ICBA and numerous other state independent banking associations across the country to ask for grassroots support to add new cosponsors for two important community bank regulatory relief bills – H.R. 1750/S. 1349, also known as the CLEAR Act.
We are pleased to report that so far, 19 new cosponsors have been added to these bills. Joining Texas Congress members Farenthold, Neugebauer, Thornberry and Veasey are Kay Granger, Kenny Marchant and Roger Williams. We appreciate these members cosponsoring this important initiative, and hope to add to the list going forward.
If you haven't yet contacted your member of Congress, please make this a priority. Further information is available in the link above.
We are pleased to announce that registration for the IBAT Winter Summit XIV is now open. This popular program, now in its 14th year, provides an unmatched opportunity to learn from senior regulators and expert banking attorneys as well as access to timely information on the economy, interest rate trends and investment strategies. In addition to the interactive general sessions, there are ample opportunities for networking and informal conversations with the speakers and other attendees.
The program will again be held in beautiful South Lake Tahoe, and the schedule allows for time to take advantage of an abundance of recreational opportunities.
Register now and make plans to join us February 9-11, 2014 for another outstanding program... and a great educational value.
IBAT's annual end-of-year compliance checklist is now available online. The list was compiled by IBAT General Counsel Karen Neeley and is featured in the November/December issue of the IBAT Magazine, The Texas Independent Banker. Also included in the issue:
- Executive Leadership of Cybersecurity;
- Small Banks Make Mistakes Cybercriminals Love;
- High Touch, High Tech, High Efficiency Banking: Meeting the Needs of Your Marketplace; and
- What Your Board of Directors Should Know: The Top 5 Questions Directors Should Ask Management About Technology Planning.
Beginning next week and continuing throughout the month of December, IBAT Regulatory Compliance Manager Kelly Goulart will be offering an expanded year-end compliance checklist in the IBAT Bottom Line eNewsletter.
With disparate impact theory standing at the heart of a recent uptick in the number of fair lending referrals, the United States House of Representatives Committee on Financial Services Subcommittee on Oversight and Investigations held a hearing on November 19, 2013, entitled “A General Overview of Disparate Impact Theory.” The hearing reviewed the legal and theoretical underpinnings of disparate impact theory and explored the consequences of its application in various contexts, such as housing and lending policy.
Representative Al Green (D-TX), a member of the subcommittee, expressed his hope that Congress would not eliminate or limit 40 years of good standing law. However, Congressman Green conceded that the law might be improved.
Speaking against using disparate impact was Peter Kirsanow, Commissioner, United States Commission on Civil Rights. Kirsanow stated his belief that disparate impact violates the Equal Protection Clause, elevates equal outcome over equal opportunity, tends to harm the intended beneficiaries, and is antithetical to the proposition that we judge people by their character rather than the color of their skin.
A witness from the Louis B. Brandeis Center for Human Rights Under Law testified that disparate impact, although potentially useful, is not being properly administered by federal agencies. The third and final witness, from the ACLU, advocated disparate impact as a necessary tool in fighting discrimination, whether intentional or inadvertent, especially in cases in which motivation is hard to ascertain.
An archive webcast and copies of the submitted written testimony are available on the House Financial Services Committee website.
IBAT's unique financial institution technology show, TechMecca, will be here before you know it. We know that, with any decision to implement new technology solutions into your bank, there are a number of individuals and departments that must first sign off. That's why IBAT is committed to making TechMecca a cost-effective event for Texas community bankers, offering a "three for the price of one" special on registration. That's three attendees for the low cost of $695.
TechMecca 2014 is scheduled for February 3-4 at the Renaissance Austin Hotel. This year's show focuses on the CORE areas of concern for community bankers, C-compliance, O-operations, R-risk management and E-enterprise efficiency. The full schedule is now available online and registration is now open.
As we all know, there are two kinds of people in this world. There are those who like mayonnaise on their sandwiches of leftover turkey, and then there are those who would rather have Miracle Whip. The release this week of two conflicting measurements of Consumer Confidence was seen by many as a manifestation of this dichotomy. For mayo lovers, the Conference Board’s Index fell to 70.4 from its previous 72.4; a seven month low. By contrast, the survey of Consumer Sentiment conducted by the University of Michigan (Miracle Whip) rose to 75.1 from last month’s 72. Clearly, condiment preference matters... Read more in the Baker Market Update.
We pause this week and reflect on our many blessings and give thanks and appreciation to others.
Your IBAT family celebrates the humbling honor to represent a noble cause and honorable industry. May we all look past this week and give thanks and appreciation to others all throughout the year.
We wish you and yours a very happy and safe Thanksgiving!
Christopher L. Williston, CAE
Please note: The IBAT offices will close at noon on Wednesday, November 27th, and will remain closed for the rest of the week. Regular office hours will resume on Monday, December 2, 2013.
By Jeff Multz
Make no mistake: big things come in small packages. That’s no secret to cyber thieves. They often take the path of least resistance and see small and regional banks as easy prey since they likely have fewer resources than larger financial institutions, and have the same exposure as larger banks.
We often see threat actors testing their tactics on small and regional banks before attacking a larger financial institution. A small bank feels the pain of a million-dollar-or-more loss far worse than a big bank, and suffers more in a loss of time, productivity and reputation.
Small banks often tell me, “We’re too small to matter,” “We don’t store valuable data,” and “Our core provider provides security.” Because smaller banks have less money to secure their systems and often don’t monitor their networks 24/7, it’s easy for cyber thieves to get in and out of their networks sight unseen. Some banks that “outsource” to a core provider (a company that provides cloud services for the bank’s core processing system) mistakenly believe that the core provider provides security for the bank. Core providers only provide security for themselves, so if you have malware on your system, it won’t affect them. Most bank/financial core providers don’t even mention the word “security” in the business contract, and they don’t provide security for your corporate environment!
There is no one device you can buy nor one thing you can do to ensure the security of your corporate environment. I often talk about the ‘50/30/20’ rule:
- We find firewalls notify you of about 50 percent of the security events that occur on your network.
- About 30 percent of notifications come from another security layer, the Intrusion Detection/Protection System (IDS/IPS), which is a good risk mitigation and a regulatory compliance demand.
- About 20 percent of your security event notifications come from servers, routers and switches that securely direct or receive your traffic.
Your IDS/IPS and firewalls should be closely monitored, and they should be managed and deployed in a multi-layered security configuration. Your cyber security devices must be tuned and updated regularly so they are effective and do not disrupt normal business traffic. And, you should monitor all of these devices on your networks 24/7, so when malware gets in, you can get it out fast, often before any information has been stolen.
It is more cost effective and is easier to keep intruders out rather than to get them out. Having intruders in a network is one small package no one wants to open.
Jeff Multz, Director of North America Midmarket Sales at Dell SecureWorks, began his career as a software programmer in 1985 and has worked in technology ever since. He holds a Bachelor of Science Degree in Computer Science from Mercer University. For help with your cyber security, contact Jeff@secureworks.com.
Earlier this year, IBAT launched the latest iteration of its Compliance Forum. The Forum is intended to be a place for IBAT members to share their most pertinent compliance questions and answers. To get started, all members will need to create an account, even if you have previously used the IBAT compliance forum. Here’s how you get started:
- Visit www.ibat.org/user/register.
- Choose a user name and then enter your email address, name, bank name and city and click the “create new account” at the bottom of the page.
- You’ll receive an email containing a link for one-time login. Click the link and confirm that you’re ready to update your password on the website.
- You’ll now need to create a unique password. The site lets you know how secure your password is, but there are no requirements for special characters, uppercase letters, etc.
- Once you create a password, you can set up the other options for your online profile (photo, signature for forum posts.
- Scroll to the bottom of the page and click “save.”
- You’ll be immediately authorized to view all content in the IBAT Compliance Forum and, within 24 hours, you’ll be approved to begin posting (this usually takes much less than 24 hours).
LAKE JACKSON, TEXAS – Texas Gulf Bank’s Centennial Celebration marked a special night for both the bank and several local charities. The event honored the strong relationships between employees, customers and friends. And as a special thank you for making the community a better place, nine non-profit organizations were presented a total of $100,000 in donations.
Receiving its charter in 1913, Texas Gulf Bank opened its doors as Freeport National Bank with $50,000 in capital stock. The original location in Freeport, Texas took up 2,200 square feet of the first floor of its building, while the Freeport Sulphur Co. occupied the second floor. The bank facilitated cashing checks for sulfur company employees, often staying open until midnight on paydays.
Since those days, the bank has grown and thrived - moving locations, expanding, adding new banking centers, and adopting the common name of Texas Gulf Bank, N.A. Today, the bank operates nine banking centers throughout Brazoria, Galveston and Harris counties with $432 million in deposits.
“We are extremely proud of our history at Texas Gulf Bank and our continued growth,” said James F. Brown, Jr., CEO of Texas Gulf Bank. “A lot has changed in 100 years, but there is one thing that remains the same. Our business is all about the people. We are a bank building strong foundations through strong relationships.”
Texas Gulf Bank’s commitment to building solid relationships in its communities was highlighted later in the evening with the presentation of donations to nine local charities, totaling $100,000.
Earlier in the year, the employees and Board of Directors of Texas Gulf Bank selected nine non-profit organizations to be finalists in the Texas Gulf Bank Giving to Grow $100,000 Community Giveaway. The allocation of the donations was determined by the community via voting on Facebook, at their local banking center, or on the Texas Gulf Bank website. Over 10,500 votes were cast in support of the finalists. Each finalist was guaranteed to receive at least a $3,000 donation, while the organization with the most votes would receive a $25,000 donation.
The final allocations were announced at the Centennial Event and were as follows:
- Boys & Girls Club of Brazoria County - $25,000
- SPCA of Brazoria County - $20,000
- BACH - $20,000
- Archway Academy -$10,000
- CanCare - $10,000
- ActionS Inc Brazoria County - $3,000
- Goodwill Industries of Houston - $3,000
- Hope Village - $3,000
- Junior Achievement Brazoria County - $3,000
*The remaining $3,000 was split equally among all nine recipients.
“Over the last 100 years we’ve had the privilege to be a part of many great communities,” said Rich Jochetz, President of Texas Gulf Bank. “It is an immense honor to give back to those organizations that have given so much.”
About Texas Gulf Bank
Texas Gulf Bank is an independently owned and operated community bank that offers a full range of personal and business banking services, personal and business loans and cash management services, through nine locations in Brazoria, Galveston, and Harris Counties. Established in 1913 in Freeport, Texas, the bank has a reputation for strength, stability and prudent capital management. Texas Gulf Bank's capital exceeds regulation guidelines and has a substantial loan capacity. Texas Gulf Bank holds a five star rating from BauerFinancial. Member FDIC. For more information, visit www.texasgulfbank.com.
It was reported in the financial press [Thursday] that the Treasury plans to liquidate its remaining 31.1 million shares of General Motors Corporation. Has the government turned bearish on itself? A no less thorny question might be to make the same inquiry of the FOMC. The minutes of their October meeting, released earlier this week, indicate that a wide range of views exists among the members of the Committee. To no one’s surprise, much discussion took place regarding the fate of QE asset purchases. With the path now clear for the ascension of Janet Yellen to the head of the table, the likelihood of any sudden reduction in the nature or magnitude of monetary accommodation seems unlikely without compelling economic justification. On the other hand (there’s always another hand) public remarks made by St. Louis Fed President James Bullard indicate that a tapering announcement in December is still on the table. They have a really nice table... Read more in the Baker Market Update.
IBAT staff was honored to attend the grand opening of the Pasadena Branch of Integrity Bank this week. A huge crowd was on hand for the festivities and the evening was emceed by Executive Vice President and Regional Manager Hazem Ahmed. Also on hand was Integrity Bank President and CEO Charles M. "Mack" Neff, Jr. who said their goal is to try to grow the bank about $100 million a year and take advantage of the tremendous economic growth opportunities in Houston and the surrounding areas.
Integrity Bank has a long history with IBAT. Mack Neff having served as IBAT Chairman in 1996 and is current member of the Board of Directors of the IBAT Education Foundation. Hazem Ahmed also serves of the IBAT Leadership Division Board of Directors and is the President of the Houston Region of the Division.
IBAT is pleased to offer you and your directors a pre-convention program, February 26-28, prior to ICBA's 2014 Convention in Maui. Our two morning programs, facilitated by two of community banking's top consultants, will focus on the strategic direction of your bank. Ed Krei, Senior Partner with The Baker Group in Oklahoma City, and Merrill Reynolds, Principal with Reynolds Williams Group of New Braunfels, Texas, will lead the sessions.
Accommodations have been secured at the world class Westin Maui Resort & Spa Ka'anapali. IBAT's room block is limited and will be available on a first-come, first-served basis.
DAY OF REMEMBRANCE FOR PRESIDENT JOHN F. KENNEDY
BY THE PRESIDENT OF THE UNITED STATES OF AMERICA
A half century ago, America mourned the loss of an extraordinary public servant. With broad vision and soaring but sober idealism, President John F. Kennedy had called a generation to service and summoned a Nation to greatness. Today, we honor his memory and celebrate his enduring imprint on American history.
In his 3 years as President of the United States, John F. Kennedy weathered some of the most perilous tests of the Cold War and led America to the cusp of a bright new age. His leadership through the Cuban Missile Crisis remains the standard for American diplomacy at its finest. In a divided Berlin, he delivered a stirring defense of freedom that would echo through the ages, yet he also knew that we must advance human rights here at home. During his final year in office, he proposed a civil rights bill that called for an end to segregation in America. And recognizing women's basic right to earn a living equal to their efforts, he signed the Equal Pay Act into law.
While President Kennedy's life was tragically cut short, his vision lives on in the generations he inspired -- volunteers who serve as ambassadors for peace in distant corners of the globe, scientists and engineers who reach for new heights in the face of impossible odds, innovators who set their sights on the new frontiers of our time. Today and in the decades to come, let us carry his legacy forward. Let us face today's tests by beckoning the spirit he embodied -- that fearless, resilient, uniquely American character that has always driven our Nation to defy the odds, write our own destiny, and make the world anew.
NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim November 22, 2013, as a Day of Remembrance for President John F. Kennedy. I call upon all Americans to honor his life and legacy with appropriate programs, ceremonies, and activities. I also call upon Governors of the United States and the Commonwealth of Puerto Rico, officials of the other territories subject to the jurisdiction of the United States, and appropriate officials of all units of government, to direct that the flag be flown at half-staff on the Day of Remembrance for President John F. Kennedy. I further encourage all Americans to display the flag at half-staff from their homes and businesses on that day.
IN WITNESS WHEREOF, I have hereunto set my hand this Twenty-first day of November, in the year of our Lord two thousand thirteen, and of the Independence of the United States of America the two hundred and thirty-eighth.