IBAT Responds to Release of Senate Banking Committee Bill to Ease Regulatory Burden on Community Banks - May 12, 2015
Austin, TX – The Independent Bankers Association of Texas (IBAT) commends Senate Banking Committee Chairman Richard Shelby on draft legislation released today that would reduce the negative impact of excessive regulatory requirements on community banks, their customers and the communities they serve.
“Since the passage of the Dodd-Frank Act in 2010 and throughout the rule-making process, IBAT has continuously raised concerns about regulatory burden and the associated impact on credit availability for community bank customers, especially related to mortgage loans,” said IBAT President and Chief Executive Officer Christopher L. Williston. “Chairman Shelby’s draft legislation is a great step forward in addressing many of these concerns.”
A recent survey of IBAT member banks found that more than 50 percent of respondents were forced to reduce their mortgage loan offerings or exit the mortgage business altogether in response to new mortgage rules put forth by the Consumer Financial Protection Bureau in early 2014.
Williston went on to praise provisions of the draft legislation that decrease the overall regulatory burden on community banks by lengthening the time period between examinations and reducing excessive reporting requirements.
“True community banks have relatively simple business models, in comparison with their big bank competitors,” Williston said. “Freeing these institutions from unnecessary burdens allows them to make community based loans to spur economic development of their hometowns.”
A final written decision by the U.S. Patent Office’s Patent Trial and Appeals Board has invalidated two patents held by Plano-based DataTreasury Corp. The patents were for abstract ideas to transmit encrypted information. In concluding that the ideas were unpatentable, the Board said that the patents merely took existing technology and tiered it without adding anything to “transform the abstract idea into patent-eligible applications of these abstractions.”
For years, DataTreasury and other patent trolls have used business process patents to hold banks hostage merely for digital imaging and sending of checks. In fact, DataTreasury has filed 19 cases in the Eastern District of Texas alone against numerous banks and other financial institutions.
“This is good news indeed and hopefully, it is a sign that the tide is turning against those using patents as methods to extort money from legitimate businesses,” said IBAT President and CEO Chris Williston.
A bill (H.R. 2213) filed in the U.S. House of Representatives would provide lenders with a temporary safe harbor from enforcement of the rule integrating mortgage disclosures under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). The bi-partisan measure, which addresses an area of great concern for many IBAT members, would protect lenders from private lawsuits and regulatory enforcement actions through December 31, 2015.
While in Washington, D.C. for IBAT’s 23rd Annual Congressional Visit two weeks ago, a group of IBAT members and staff met with the CFPB to express concerns about the implementation of the disclosures. In that meeting, IBAT laid out a comprehensive list of concerns related to the implementation of the rule, including the lack of preparedness of third-party service providers.
Earlier this year, Representative Blaine Luetkemeyer sent a letter to the CFPB requesting information about the Bureau’s work supporting the implementation of the disclosures and requesting a similar hold harmless period. In response, Director Cordray was evasive, promising only to “continue working with industry, consumers and other stakeholders to…evaluate any issues industry and consumers experience as the Integrated Disclosure Rule is implemented.”
Related to this issue, on May 4 the CFPB issued updated exam procedures for TILA-RESPA integration. The procedures provide guidance on how compliance exams will be conducted on the rule.
IBAT and Financial Education and Development, Inc. have five webinars related to the TILA-RESPA changes effective August 1. Ensure that your staff understands the intricacies and that your bank is in compliance by registering for these educational offerings.
IBAT is pleased to announce StoneCastle Financial as the newest endorsed service provider. Formed in February 2013, StoneCastle Financial is an SEC registered, closed-end investment company established to serve as a direct investor in community banks seeking capital for growth opportunities, share repurchases and other refinancing activities.
The first investment vehicle of its kind focused on community banks, StoneCastle provides client banks with access to a new pool of permanent, passive and reasonably priced capital. To date, StoneCastle Financial and parent company StoneCastle Partners have made capital contributions to more than 250 community banks across the country, including several in Texas.
“IBAT is thrilled to add StoneCastle Financial to our stable of quality endorsed service providers,” said IBAT President and CEO Chris Williston. “Access to capital is among the most pressing issues facing community banks today. StoneCastle Financial provides a unique, straightforward and non-invasive solution to Texas community banks and their capital needs.”
In other endorsement news, the IBAT Board of Directors recently renewed the endorsement of Glory Global Solutions, Inc. Glory Global’s products endorsed by IBAT include Teller Cash Dispensers, Teller Cash Recyclers, and QuickChange Machines. To learn more, click here.
ICBA is seeking nominations for the 2015 National Community Bank Service awards. The annual awards recognize exceptional efforts of community banks and their employees working to sustain and improve their communities through their commitment of time and resources.
ICBA encourages IBAT member banks with community service or volunteer programs to submit a nomination. Entries should describe how these programs positively impact the local community. It is free to enter, and multiple entries are encouraged. The nomination deadline is June 1.
Award recipients will be featured in the August issue of ICBA Independent Banker magazine and will receive a donation from ICBA to use toward future community service efforts. Nominate your bank today and find out more here.
The IBAT Board of Directors is pleased to announce the renewal of its endorsement with Glory Global Solutions, Inc. during its first quarter board meeting. World experts in the management of cash, Glory Global works in partnership with Texas community banks to identify their exact needs, establishing a framework of technology and process change that has a profound effect on business results. FirstBank & Trust –Lubbock, Bill Waller EVP/COO, commented, “The Cash Recyclers were the first step in moving our bank into a sales culture through the universal teller position. We now hire for our sales personality rather than a transaction based employee. We can truly place our emphasis and our time on our customers to build customer loyalty and ultimately grow the bank”
IBAT Services Vice President, Lori Cortez, commented. “As a former banker and Glory client, I was able to ensure that cash moved seamlessly throughout operations, significantly reducing costs while transforming staff productivity.”
Glory Global’s products endorsed by IBAT include Teller Cash Dispensers, Teller Cash Recyclers, and QuickChange Machines.
The TILA/RESPA Integrated Disclosure is one of the hottest - and most complicated - regulations this year. With the August 1, 2015, deadline approaching, make sure your staff understands the intricacies and that your bank is in compliance.
You can register for any of these webinars by following the related link. Archive availability extended until December 31, 2015.
- 2/3/2015 - Revisiting Your RESPA & TILA Policies to Include the New Integrated Disclosure Requirements
- 3/24/2015 - The TILA/RESPA Integrated Disclosure Line-by-Line Part 1: Loan Estimate
- 4/21/2015 - The TILA/RESPA Integrated Disclosure Line-by-Line Part 2: Closing Disclosure
- 5/29/2015 - Testing Loan Audit Procedures for Integrated Disclosure Compliance Before the August 1, 2015 Deadline
- 6/11/2015 - Countdown to the Integrated Disclosure Deadline: August 1, 2015
To see all of our offerings, go to the webinar calendar.
Webinar content is subject to copyright and intended for your individual financial institution's use only.
The news this week can only reinforce the notion that the economy, like so many millennials, has moved back in with the parents and is now living in the basement of the Fed. To be fair, the economy would like to be independent. It would like to be self-sufficient. It would like to be able to stand on its own two feet. But it can’t; not yet anyway. And, since there are no openings in graduate school, Janet’s low-rate cellar is looking pretty good. Which, if you close one eye and squint with the other one, is what might be said about this morning’s Unemployment Report.
The FDIC’s Division of Depositor and Consumer Protection (DCP) will host a teleconference about the implementation of the CFPB’s mortgage rules on May 21 from 1:00-2:30 p.m. CT. During the teleconference, FDIC staff will share observations from FDIC examiners during initial examinations, including highlighting a number of practices currently used by institutions that may be useful to bank compliance officers. Questions can be submitted prior to the teleconference by emailing BankerTeleconference@fdic.gov.
Participants must register by May 19. Registration and additional information is available here.
DES MOINES, Iowa (April 24, 2015) — The SHAZAM Network today announced the addition of Patrick Dix to the company’s marketing team. Hired as a senior public relations manager, Dix brings 20 years of public relations and writing experience to the member-owned EFT network.
Prior to joining SHAZAM, Dix spent the majority of his career as an anchor of the #1 morning newscast on WHO-HD in Des Moines. During his tenure at the station, he covered five Iowa Caucus cycles, city and county government and countless stories about Iowa weather including two major floods.
Dix has been recognized for outstanding reporting with awards from The Society of Professional Journalists, The William Randolph Hearst Foundation and the Midwest Broadcast News Association. In 2012, he began developing and teaching media training courses. The classes focused on how news rooms work, how to get stories on air and how to deal with media in a crisis situation. As PR manager at SHAZAM, he’ll offer similar services to community financial institutions.
Dix holds a degree in journalism from the University of Missouri.
The SHAZAM Network was founded in 1976 and is one of the last remaining member-owned and -controlled electronic funds transfer (EFT) networks and processors in the industry. SHAZAM provides choice and flexibility to community financial institutions throughout the U.S. SHAZAM is a single-source provider of the following services: debit card, core, fraud, ATM, merchant, marketing, platform, risk and automated clearing house (ACH). To learn more visit shazam.net and follow @SHAZAMNetwork.
On Friday, Congressman Randy Neugebauer followed through on his promise to file new legislation to apply consistent data security standards to all industries that handle sensitive consumer information.
In meetings with Neugebauer and other members of the Texas Congressional delegation last week, IBAT members urged greater consumer protection by applying Gramm-Leach-Bliley security standards for all entities that handle sensitive data. Neugebauer’s bill, the Data Security Act of 2015 (HR 2205), does just that.
“Consistent standards for the protection of consumer data is imperative,” said IBAT President and CEO Chris Williston. “This, along with shifting the liability for fraud losses to the entity that experiences the breach, are the guiding principles behind IBAT's and ICBA’s efforts for new data security legislation in this Congress.”
IBAT members are urged to call the Capitol offices and ask their Congressional representatives to co-sponsor HR 2205.
As we enter the final 30 days of the 84th Texas Legislature, a number of issues we are addressing on your behalf are progressing through the maze of the legislative process.
SB 641 (Schwertner), providing for enforcement of the debit card surcharge prohibition, was passed out of the House late last week and substituted for HB 3442 (Raney) as one of the first bills to pass both chambers this session. Several acceptable amendments were added, so the Senate author must concur with these, but we expect the bill to be on the Governor's desk in the next ten days. We very much appreciate the efforts and fine work of both Senator Schwertner and Representative Raney as well as their respective staffs on this issue.
As noted in several "calls to action," HB 3522 (Longoria), which would require validation of the identity of a purchaser of gift cards at point of sale, was heard on the House floor on Monday where is passed on second reading. A record of the vote can be found online via the Texas Legislature homepage.
Chairman Rene Oliveira's HB 1936, which would require 10 days prior notice to existing lienholders on a property tax loan, was finally passed in the House yesterday. It is now headed to the Senate where we will have an opportunity to work hard for passage in the coming weeks.
The bill to require payment prior to providing a discovery request, HB 2394 (Darby), has passed the House and should be voted out of the Senate Business and Commerce Committee this week. Likewise, SB 1020 (Creighton), allowing a trust to be named as a beneficiary on a POD account, is moving through the process, has passed the Senate and should be heard this week in the House Judiciary and Civil Jurisprudence Committee. Representative Andy Murr's companion bill, HB 1847, is through the Committee and awaiting action on the House floor.
- SB 1457 (Nichols) addresses the liability of "end users" in patent troll lawsuits. This important bill has passed the Senate and should be referred to a House Committee this week.
Thanks to all of you who have contacted your lawmakers on these bills! It makes a tremendous difference and is a critical part of the process.
More than 125 IBAT members joined 1000+ bankers from across the country last week to make the case for meaningful regulatory reform and other important measures for community banks pending in the 114th Congress.
IBAT members pushed Texas’ Congressional delegation to co-sponsor two primary bills. HR 1233 by Congressman Blaine Luetkemeyer, also known as the Comprehensive Lending Enhancement and Regulatory Relief (CLEARR) Act, contains several important regulatory relief provisions for community banks, including providing Qualified Mortgage status for mortgage loans held in portfolio. Additionally, members were encouraged to co-sponsor HR 1523 by Congressman Scott Garrett that would exempt community banks from Basel III capital standards. A variety of other important issues were discussed, including data breach reform, patent reform and credit union member business lending expansion.
A couple of other very important developments are worth noting:
- Congressman Kenny Marchant committed to introduce a bill that would expand the permissible number of shareholders for Sub S banks and allow for the creation of preferred stock for Sub S banks as an additional source of capital.
- Congressman Pete Sessions was asked to consider introducing legislation that would create a bifurcated regulatory scheme based on the complexity of business operations of financial institutions, rather than arbitrary distinctions based on asset size. Comments made by Fed Governor Tarullo at the general session of the ICBA Washington Policy Summit also signaled growing support for a bifurcated regulatory system.
Thank you to all IBAT member bankers and associates who attended. It was a wonderful showing of constituent advocacy.
It’s “showtime” today on the House floor! We’ve asked you repeatedly to contact your State Representative, and it is readily apparent that many of you have responded. If you have done so, please accept our sincere thanks. One more phone call or text message to reinforce the importance of this issue to you and your bank could make the difference. If you haven’t already made your contacts, PLEASE take five minutes and do so this morning.
One of the key provisions of IBAT’s proactive legislative agenda, HB 3522 (requiring validation of ID prior to the purchase of a gift card with a credit or debit card), is under intense fire from credit card companies, several too-big-to-fail banks and the “big box” stores.
This bill will be heard on the House floor today - Monday, May 4. This has become a classic “David vs. Goliath” battle ... and we need all the “Davids” to weigh in! The opposition is working this bill frantically. Please take a moment to review this one pager which better explains the issue.
Your immediate response to this call to action is critical to the success of this bill!
It is imperative that your member of the Texas House of Representatives hear from you on this bill. Please take time to call your House member’s office this morning, and tell them you strongly support HB 3522.
You can find your House member's contact information here. If you need to find out who your House member is, you can use this link to do so. Feel free to pass along the one pager to your State Representative or staff.
Texas House members must hear an overwhelming response from the industry on this issue. Please encourage any and all bank employees to take a moment to call as well.
Thank you for your assistance and your support of our efforts in Austin!
Thanks to all who helped celebrate Community Banking Month in April. Throughout the month, IBAT placed audio and banner ads on Pandora radio in four mid-markets around the state to promote Community Banking Month and encourage listeners to find a community bank in their area. The ads were developed and produced by the IBAT communications team, specifically targeting adults 25-35 years old.
“Marketing research has indicated that Gen Y consumers harbor strong distaste and distrust for the big banks,” said Christopher Williston, IBAT’s Senior Vice President - Communications. “The IBAT-produced Pandora ads played upon that sentiment as well as an overall desire in the Gen Y demographic to ‘go local.’”
All told, the ads were heard more than 666,000 times throughout the month of April and garnered 5,000 clicks on the “Community Bank Finder” webpage. A further breakdown of the campaign, in addition to a “lessons learned” for community bank marketing efforts, will be featured in the next edition of The Texas Independent Banker magazine.