Updated Exam Manual

The Federal Financial Institutions Examination Council recently released the revised 2014 Bank Secrecy Act/Anti-Money Laundering Examination Manual. Revisions cover supervisory expectations and regulatory changes since the manual’s 2010 update in addition to other changes. The Financial Crimes Enforcement Network and Office of Foreign Assets Control assisted on revisions made to information about compliance with regulations and sanctions associated with programs administered by those agencies. Themanual can be accessed here, and sections with significant updates are noted in the table of contents.

IBAT Job Bank

Are you looking to add to your team in late 2014 or early 2015? Consider posting in the IBAT Career Center between now and the end of 2014 and save 25% on your job posting with use of the coupon code “YEAREND14.” Jobs posted in the IBAT Career Center are open for viewing from all Texas financial institutions as well as employees of IBAT’s 200+ Associate Members.

Currently, there are two featured positions in IBAT’s Career Center. Click here to view postings for:

  • Ag Lender – Texas Financial Bank – Big Lake, TX
  • Senior Lending Officer – The Bankers Bank 

Jumping on the Bandwagon

At an interagency outreach meeting on the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) in Los Angeles last week, Comptroller of the Currency Thomas Curry and Fed Board Governor Lael Brainard spoke about the need for a reduction in regulatory burden for community banks, now and in the future.

In his opening remarks, Curry urged Congressional action on three proposals – applying the 18-month examination cycle for banks $750 million and below (from the current threshold of $500 million), creating an explicit exemption from the Volcker Rule for banks with less than $10 billion in assets, and allowing federal savings associations and national banks to change their business plans without being required to change charters.

“Each unnecessary rule we eliminate or streamline makes it that much easier for [community banks] to serve the economic needs of their communities,” Curry said. “I think these are meaningful steps that could help a great number of smaller institutions.”

In Brainard’s comments, he called for regulations to be “appropriately calibrated for smaller institutions,” saying it would be “counterproductive” to subject community banks to provisions of Dodd-Frank which were intended for the largest banks.

“Bravo," said IBAT President and CEO Chris Williston. “It’s nice to hear that federal regulators are beginning to join the industry in urging Congress to pass meaningful regulatory relief legislation and to consider the implementation of a two-tiered regulatory system.”

Comment Letter Filed

In its comment letter to the FCC, IBAT supported the American Bankers Association’s petition by requesting that the FCC exempt four categories of messages sent by financial institutions from the Telephone Consumer Protection Act of 1991 that autodialed messages, text messages and prerecorded messages placed on landline phones be sent with prior consent.

Briefly, the four categories are:

  1. fraud/identity theft,
  2. security breaches,
  3. steps to prevent or remedy security breaches, and
  4. actions needed to arrange for receipt pending money transfers.

As explained in the letter, exempting banks from these four categories will reduce burdens on banks, increase consumer protections and reduce privacy and security risks.

IBAT Career Center

Are you looking to add to your team in late 2014 or early 2015?  Consider posting in the IBAT Career Center between now and the end of 2014 and save 25% on your job posting with use of the coupon code “YEAREND14.”  Jobs posted in the IBAT Career Center are open for viewing from all Texas financial institutions as well as employees of IBAT’s 200+ Associate Members. 

In addition to the discount, IBAT staff is planning significant promotion of the Career Center between now and 2015 so traffic should be even higher than usual.   If you have questions about the Career Center or need assistance in purchasing your posting, please contact Christopher Williston at 512-275-2208 or clwilliston@ibat.org.

Baker Market Update: Dec. 8, 2014

Help me remember. Is it “slack” in the labor force that so worries Janet Yellen, or “slackers” in the labor force? Well, either way, she’s got a bit less to worry about after the release of this morning’s jobs report from the Bureau of Labor Statistics. Market participants learned this morning that employers added 321k to Non-Farm Payrolls last month along with an upward revision of the prior month’s total to 243k from 214k. Last month’s job growth, the largest since January 2012, came as an early Christmas present to experts expecting to only see 230k new jobs. Despite the unexpectedly high level of job creation, the 5.8% Unemployment Rate and the 62.8% Labor Force Participation Rate remained unchanged. Nearly unchanged, unfortunately, were earnings. Average Hourly Earnings rose by a miserly .37% for the month, and 2.1% year-over-year. That’s the kind of slack that is still troubling to Ms. Yellen.

Read more in the Baker Market Update.

2015 Regional Meetings

Mark your calendars because IBAT is coming to your town (or a town near you) for the 2015 “Tour de Texas” Regional Meetings. Join IBAT Chairman John Jay and President and CEO Chris Williston for a legislative and regulatory update, as well as an overview of the year to come in the life of the association. Registration will be open soon. Until then, save the date for:

  • January 26 - Wichita Falls, Fort Worth 
  • January 27 - Amarillo, Lubbock 
  • January 28 - El Paso, San Angelo 
  • January 29 - Waco, San Antonio
  • January 30 - Austin
  • February 24 - Galveston, Schulenburg, Weslaco
  • February 25 - Corpus Christi, Houston, Kilgore
  • February 26 - Mt. Pleasant, Dallas

We look forward to seeing you all early next year and welcome your input on issues you’d like to hear discussed at the 2015 Regional Meetings.

Bank Lawyer Webinar

The next webinar in IBAT's new series of lawyer webinars, Debt Collection Minefields, is coming up on December 11. The programs are targeted for community bankers and Texas lawyers who represent community banks. This webinar series features real world information for real world legal practices and will provide an overview of the debt collection process along with efficiency tips, including selected topics from her "Anatomy of the Collection Process” paper, which is free on speaker Donna Brown's website. Topics of that paper include: consumer vs. commercial debts, debtor location, debtor identity, multiplying defendants, avoiding the usury trap, demand letters, payment agreements, suits on accounts, where to file suits, service of process, answer date, default judgment, summary judgment, mediation, judgment, trial, post-judgment discovery, assets, post-judgment remedies, judgment renewal, and practice management. 

This series is designed to provide local bank counsel with practical information on common bank issues and concerns. Register today

Click here to purchase the previous webinar in the series, Garnishments, Subpoenas & Levies

TX Leadership in D.C.

Texans are playing an increasingly significant role in shaping policy for our industry and our nation. Senior Senator John Cornyn was recently named Majority Whip, the number two most powerful position in the Senate.

In addition to the reappointment of Congressman Jeb Hensarling as Chairman of the Financial Services Committee, several other Texans will head up important committees for the upcoming 114th Congress. Retaining their chairs are Michael McCaul (Homeland Security), Pete Sessions (Rules) and Lamar Smith (Science, Space and Technology). Newly appointed Chairmen include Mike Conaway (Agriculture) and Mac Thornberry (Armed Services).

“Texas members continue to make a significant impact in Washington, D.C., and we are obviously pleased that such qualified and dedicated Texans have earned these positions,” said Chris Williston, IBAT President and CEO. “We extend our hearty congratulations to each of these impressive individuals, and look forward to working with them and their colleagues to move meaningful community bank regulatory reform forward on a timely basis."

De Novo News

After years of stagnation in new bank charters due in part to stringent requirements set by the Federal Deposit Insurance Corporation (FDIC), the regulator softened expectations in a recent document clarifying chartering policy.

The document, which was released at the FDIC’s advisory committee on community banking, clarified that:

  • New charters must retain an 8% tier 1 leverage ratio for the first three years of operation, not seven years. This applies to applications displaying a “traditional risk profile” and the FDIC could seek a higher level of capital for proposals with heightened risk and complexity. 
  • Applicants are required to detail their business plan for the first three years of operation, not seven years.

According to reporting by American Banker, officials at the meeting “also highlighted a change eliminating the requirement for FDIC-supervised state banks to seek approval to engage in activities through limited liability companies.”

The document said the FDIC also “strongly encourages” meetings between regulators and potential applicants before formal filings, in the interest of setting regulatory expectations and “promot[ing] open communication.”

Comment Letter

Last week IBAT filed comment on the Department of Defense’s proposed changes to the Military Lending Act (MLA), which would extend the protections of the Act to a broader range of closed-end and open-end credit products including consumer installment loans, unsecured open-end lines of credit and credit cards.

In the letter, IBAT President and CEO Chris Williston expressed concern that the proposed rule will simply reduce credit products offered by insured banks and will have the unintended consequence of affecting a number of products that are not of concern to the Department. For this reason, IBAT proposed exempting insured depository institutions completely from newly proposed limitations of the MLA.

Williston outlined concerns in proposed restrictions on refinancing and modifications, on access to bank accounts for payment or security, and on the ability for interest rates to be changed – even if they are being lowered. He also articulated IBAT’s belief that compliance with the changes would result in unnecessary regulatory burden with which many community banks simply cannot comply, thus resulting in further limits of credit availability.

The comment period closed on November 28, 2014.

Card Wars

Late last week, PULSE filed suit in a Houston federal court against Visa, citing many antitrust violations including monopolization of the debit network services market.

The PULSE suit is based on Visa's actions since the enactment of the Durbin amendment as part of the Dodd-Frank legislation in 2010. Besides restricting bank interchange fees, Durbin was intended to enhance competition among debit networks. PULSE maintains that Visa launched several anti-competitive initiatives in response including the establishment of a fixed-acquirer network fee and a PIN-authenticated Visa debit mandate. As a result, network fees paid by merchants have risen and competition has been thwarted.

"PULSE does not resort to litigation lightly," said PULSE President and CEO David Schneider. "Through this lawsuit, PULSE hopes to restore competition to the market."

Schneider assured PULSE participants that the lawsuit will not impact PULSE's day-to-day business with Visa.


Baker Market Update: Dec. 1, 2014

Once again, Black Friday is upon us and everything is on sale. Everything! That’s right, Uncle Jed, even Black Gold. Despite the Thanksgiving holiday for America’s financial markets, the rest of the world was open for business. And for those in the oil business, not many were thankful for OPEC’s decision yesterday to maintain current production levels. The cartel’s decision not to support the crude oil market by curtailing output sent crude oil prices tumbling yesterday. The plunge in domestic prices to below $70/barrel is a reprise of market levels not seen in over four years. The good news for consumers is that the less they are required to spend on energy, the more they’ll have available to spend on video games. Thank you OPEC!

Read more in the Baker Market Update

Cybersecurity Seminar

Texas community bank CEOs, directors and other officers are encouraged to participate in "Executive Leadership of Cybersecurity (ELOC) – Taking the Fear Out of Cyber Threats." This event is designed for CEOs and directors who have focused their careers on the non-cyber aspects of banking to help them manage one of today’s most challenging aspects of bank risk management. Too often cybersecurity is fully delegated to operations personnel, but the changing world requires that everyone at a CEO and board level take a proactive role in understanding and managing cyber risk.

IBAT, TBA, SWACHA, law enforcement, and both federal and state banking regulators have partnered to bring this overview of cyber threats to the banking industry on December 3, at the Hilton Austin Airport Hotel. The deadline to secure the discounted hotel rate ($139/night) is November 5. A full brochure, registration information and other details can be found here. Seven hours of continuing education with the Texas Board of Public Accountancy will be given to attendees. 

Happy Thanksgiving!

Thanksgiving is a time to reflect on our many blessings. Your IBAT team considers it a great privilege to work to advance a great industry that does so much for so many. We are blessed with your continued support and friendship.

On behalf of the officers, directors and staff of IBAT, we wish you and your family a very safe and happy Thanksgiving surrounded by family and friends.

Your IBAT offices will be closed on Thursday, November 27 and Friday, November 28 and will resume normal business hours on Monday, December 1.