IBAT News

"Know Before You Owe"


The Consumer Financial Protection Bureau (CFPB) finalized two minor modifications to a mortgage disclosure rule that will go into effect on August 1, 2015. These changes to the “know before you owe” mortgage disclosure forms will allow lenders more time - up to three business days instead of the same day - to send updated loan estimates after a consumer locks in an interest rate and will also expand disclosure requirements when a mortgage is for new home construction. The loan estimate form for new home construction mortgages will now include additional space for lenders to inform borrowers that a revised loan estimate for loans involving new construction could take more than 60 days to settle.

The updated forms are intended to better consumer understanding, aid comparison shopping and help prevent closing table surprises for consumers. This new rule will combine overlapping requirements from the Real Estate Settlement Procedures Act and the Truth in Lending Act into a single, consolidated mortgage disclosure regime.

Annual Insights Survey of Bank Executives


Abound Resources recently released its 2015 Annual Insights Survey of Bank Executives, and the results were encouraging. While there are still major concerns about regulatory burdens, 66% of respondents feel either somewhat or very optimistic about 2015. Findings also show fraud and information security is the largest current fear. Additionally, CEOs and executives are more focused on efficiency improvement than they have been in past years. According to the survey, the top technology priority is to drive more efficiencies.

The full survey can be downloaded here. Abound Resources will also hold a free, 30-minute webinar on February 3, 2015 at 10 a.m. CT that discusses the survey findings in depth. Registration is now open.

Disparate Impact Ruling


The Supreme Court of the United States heard Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, which poses a fundamental question about the 1968 Fair Housing Act that outlawed discrimination on the basis of race in housing decisions. In the case currently before the court, Dallas-based nonprofit group The Inclusive Communities Project alleges that the Texas Department of Housing and Community Affairs is using a federal tax break to build affordable housing only in high-poverty minority neighborhoods. The group argued that this denies minorities access to affordable housing in communities where they would have access to better schools and other opportunities.

This ruling on disparate impact can be used in fair housing cases and will impact how mortgage lenders set guidelines for approving loan borrowers. Disparate impact has become controversial with housing industry groups, and Republicans have vocally stated their belief that it is a legal overreach and a negative impact on the housing market. However, the Housing and Urban Development Department finalized a rule in February 2013 that would allow the use of disparate impact as a tool to combat lending discrimination. A decision is expected by the time the court’s term ends in June.

Brokered Deposits Guidance


In an attempt to clarify what meets the definition of ‘brokered deposit,’ the FDIC released guidance that consolidated previous interpretive letters and a 2011 study into a 15-page FAQ document

This is important because the amount of brokered deposits can affect what institutions pay in insurance assessments.

Industry experts say the new guidance on identifying, accepting, and reporting brokered deposits will make it easier for institutions to tell what is and what is not brokered. This new guidance shows the FDIC is taking a conservative and strict interpretation of what it considers a brokered deposit.

Trek to Washington


IBAT Chairman John Jay, along with Chris Williston and Steve Scurlock, made the trek to Washington, D.C. last week to meet with key players as the 114th Congress gets underway. Commissioner Charles Cooper was also in attendance at a number of the meetings, which is always appreciated.

In addition to very cordial and productive meetings with “the new guys” - Congressmen Babin, Hurd and Ratcliffe - we also had frank and candid discussions with a number of the members of the House Financial Services Committee from both Texas and elsewhere who will play vital roles in moving positive legislation for community banking. We also had the opportunity to discuss community banking issues, logistics and timing with senior staff of both the House Financial Services and Senate Banking Committees.

“The time for action on community banking issues is now,” said Chris Williston, IBAT President and CEO. “There is a tremendous amount of legislation needed to fix the numerous challenges facing the community bank sector, and our hope is that many of these can be addressed early in the 114th Congress. With that said, our hope at this juncture is to quickly move legislation that will allow community banks to make in-portfolio mortgage loans without the expensive and counterintuitive impediments added by a mountain of new regulation.”

IBAT is grateful for the continued cooperative efforts we have with ICBA to effect meaningful and timely regulatory burden relief and looks forward to working with this Congress to achieve some long-overdue changes in an unsustainable regulatory environment.

14 Committees Named

With the cleanup from the inaugural festivities still in progress, newly sworn in Lt. Governor Dan Patrick named the members of 14 committees (reduced from 18 in the last Legislature).

While certainly all committees do important work, several are particularly important to our activities representing your interests as community bankers. Tyler Senator Kevin Eltife was named Chairman of the Committee on Business and Commerce with Brandon Creighton of Conroe as Vice Chair. This committee deals with virtually all banking-related issues, and we look forward to working with these two longtime supporters of community banking. We are also pleased to see two more very capable and supportive senators named to the top spots of the important Committee on Finance - Jane Nelson (Flower Mound) takes over as the Chair with Chuy Hinojosa (McAllen) as Vice Chair.

Also significant was a change in the rules long sought by Lt. Governor Patrick to decrease the number of votes required to bring legislation to the Senate floor. Without getting into details, as those who might be interested in this manner of minutiae are likely already aware, the “magic number” has decreased from 2/3 (21 if all are in attendance) to 3/5, or 19. Interestingly, Republicans now hold 20 of the 31 seats.

On the other side of the Texas Capitol, House members turned in their requests for committee spots last week. We anticipate that committees will be named over the next several weeks, and the pace of this session will accelerate significantly.

Bank Directors’ Conference


The Bank CEO Network will host the 12th Annual Community Bank Directors’ Conference on March 19-20, 2015 at the Omni Mandalay Hotel at Las Colinas in Irving, Texas. Conference topics, which are oriented towards educating outside directors and CEOs about community banks, comprise the most current and pertinent issues troubling community banks. The conference agenda can be found here.

In addition, attendees and their guests are welcome to attend the Singer/Songwriter Pickin’ Party on Thursday night, March 19, when Hall of Fame songwriters will entertain with their songs and tell the stories behind their music. If any of your bank directors would like to attend the conference, please complete the online registration. For additional information regarding conference fees, CPE credit and cancelation policy, click here.

January Dell Sale


Ready to start spending your 2015 technology budget? Dell's sale is still going on! 

Dell’s starting the year with a bang! Current discounts include:

  • 40% off Latitude Laptops;
  • 40% off Optiplex Desktops;
  • 40% off Precision Workstations; and
  • 35% off PowerEdge Servers.

Each of these special discounts are available until January 31, but IBAT member savings are available from Dell all year long. On average, IBAT members enjoy savings of approximately 30% on each order.

Ordering is easy: visit 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.

The offer is valid for IBAT member banks and bank employees. Please pass on this email, or download the flyer and post it somewhere in the bank where everyone can see it.

For orders of more than five units, please reach out to Bryan Horten at Bryan_K_Horten@Dell.com or 512-942-9120.

*Non-transferable. Save 40% on the list price on any Latitude Laptop, Optiplex Desktop and Precision Workstation and 35% on any PowerEdge Server. Offer is not combinable with other offers, discounts or coupons. Limit of five promotional items per customer. Only valid on purchases made through the Dell Small Business. 

Baker Market Update: Jan. 26, 2015


Looks like the Swiss are still making headlines, but this time it’s on the sports page. Switzerland’s national hero, Roger Federer, was ousted in the early going of the Australian Open Tennis Championship by little-known Andreas Seppi, a native of Bolzano, Italy. Signor Seppi, however, was not the week’s biggest Italian newsmaker. European Central Bank President Mario Draghi’s announcement on Thursday that the ECB would embark upon an aggressive bond-buying program may have been anti-climactic, but was nonetheless newsworthy. Although this latest step in European efforts to spur growth and avoid deflation was widely expected, the magnitude of the effort was a surprise to many. News of the planned €1 trillion ($1.14 trillion) in sovereign bond purchases was a boon to credit and equity markets, but sent the value of the Euro plunging. ECB spokesmen were quick to squash rumors that Bill Belichick had been called in as a deflation consultant.

Read more in the Baker Market Update.

ATM Safety


IBAT would like to thank the Department of Banking (DOB) and the Department of Savings and Mortgage Lending (SML) for their proposals to eliminate the annual User Notice on ATM Safety for state banksstate savings and loan associations, and state savings associations. IBAT participated in early discussions with the DOB about eliminating this annual notice.

However, the proposals would also require resending the notice every time a debit card is reissued. With breaches resulting in multiple reissuances, we feel it is overkill and requested that it be eliminated from the rule. See here for our comments. If you have had to reissue multiple times - or simply see that as an unnecessary regulatory burden - we encourage you to email your comments to the DOB at legal@dob.texas.gov and to SML atsmlinfo@sml.texas.gov.

EGRPRA Meeting - Dallas


On February 4, 2015 in Dallas, the Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank (FRB) and the Federal Deposit Insurance Corporation (FDIC) - collectively, the agencies - will hold the second in a series of outreach meetings on the agencies’ interagency effort to reduce regulatory burden as required by the Economic Growth and Regulatory Paperwork Reduction Act of 1996 (EGRPRA). These federal banking agencies will hold the following additional outreach meetings throughout 2015: Boston on May 4, Chicago on October 19 and Washington, D.C., on December 2. Additionally, the agencies plan to hold an outreach meeting this summer that will focus on rural banking issues.

Community bankers are encouraged to attend an EGRPRA outreach meeting to share their views on how to reduce unnecessary burdens in OCC, FRB and FDIC regulations. For those unable to attend the Dallas meeting in person, a live webcast will be available on the EGRPRA website. Registration and the agenda for the Dallas meeting can be found here. The registration deadline is January 28 or when all seats are filled.

TechMecca 2015


TechMecca 2015, IBAT's annual technology conference and expo kicksoff in just over a week. 

The current rate of change in technology influencing the operations and customer service of community banks is nothing short of dizzying. While everyone has an eye towards the future and “what’s next,” TechMecca 2015 will call attention back to the C-O-R-E areas of concern:

  • Compliance,
  • Operations,
  • Risk Management, and
  • EMV Workshops.

The agenda includes dynamic general sessions led by industry experts who understand the fragile balance between technology, marketing and customer service, and concurrent sessions that focus on specific topics to help attendees move their financial institutions forward in a changing industry. 

Make certain that your institution is fully represented to take advantage of the wealth of knowledge and information available.

Basel III Capital Rules


The new Basel III capital rules that went into effect for all banks on January 1, 2015 can be confusing. All Non-Advanced Approaches Banks (< $250 billion assets) are required to make a one-time, irrevocable election to opt-in or opt-out of the new accumulated other comprehensive income (AOCI) treatment for regulatory capital computations on their March 31, 2015 call report.

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 aresource to check multiple scenarios of your bank’s Basel III capital ratios.

If you’d like to learn more about the Basel III final rules and how they’ll affect your bank, register for one of IBAT’s Basel III & RC-R Webinars on January 23, 2015.

A special thanks to Padgett, Stratemann & Co., CPAs for providing this information.

.bank Domain


As has been reported over the past few months, the .bank domain will soon be available. While banks are not required to use the .bank domain, it is highly encouraged that you register and secure your bank’s name at the .bank domain. To assist with this process, the Independent Community Bankers of America has created a “How to Register for .Bank” webpage that includes links and deadlines for registering domain addresses, pre-approvals for .bank designations and additional information.

The deadline to register existing web domain addresses is May 15, 2015.

Debit Interchange Rules Untouched


Yesterday, the United States Supreme Court declined to hear a case from retail groups seeking to overturn the Federal Reserve’s rule that established debit card interchange fees.

The decision of the Supreme Court to decline hearing the case effectively solidifies the March 2014 decision by the U.S. Court of Appeals that affirmed the methodology used by the Fed to establish interchange fees. Retailers have maintained that the Fed interpreted the statute too broadly when establishing the fee and ultimately settled on a maximum fee that was too high.

While banks under $10 billion in assets are excluded from the interchange rule, IBAT has long been concerned that the outcome of this case would create market forces long term that would certainly drive interchange rates down for all institutions.

“The Supreme Court’s decision to decline hearing the case is welcome news to the banking industry,” said IBAT President and CEO Chris Williston. “As banks continue to face the impact of retailer data breaches, the affirmation of the Appeals Court decision provides certainty for the banking industry that they may continue to charge a reasonable fee for debit transactions.”

TILA Right of Rescission


Last week, the United States Supreme Court held in the case of Jesinoski v. Countrywide Home Loans, Inc., that a borrower seeking to rescind a loan pursuant to the Truth In Lending Act’s (TILA) extended right of rescission need only submit notice to the creditor within three years to comply with the three-year limitation on the rescission right. TILA gives select borrowers a right to rescind their mortgage loans.

The Court’s decision clarifies that a borrower doesn't have to file a lawsuit within three years to rescind a loan under TILA. The Court held that a borrower's notification of intention to rescind is sufficient. The full decision can be found here.

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