IBAT News

Ongoing Mortgage Rule Relief Efforts


Last week, IBAT joined community banking associations across the country in signing a letter calling upon the Consumer Financial Protection Bureau (CFPB) to revise the current ability-to-repay/qualified mortgage (QM) rules and escrow requirements for higher-priced mortgage loans to allow community bank loans held in portfolio for the life of the loan to receive automatic QM safe harbor status and an exemption from the escrow requirements if the loans are higher priced.

“Community banks make it a priority to help various types of consumers, including those in rural communities where non-traditional mortgage loans are prevalent due to the distinctive nature of rural properties,” the letter read.  “These loans are not sold into the secondary market but are kept in portfolio…therefore, additional underwriting and escrow requirements only function as unnecessary regulatory burdens that stifle community banks’ ability to provide solid loan products to consumers.”

The letter also implored the bureau to revisit the threshold under which a bank receives a small creditor exemption for the purposes of CFPB escrow requirements. 

“We continue to hear from IBAT members that new mortgage rules are unnecessarily burdensome and add undue costs to the mortgage making process,” said IBAT President and CEO Chris Williston.  “While the CFPB has taken some positive steps in recent months, we believe there is further work to do to bring the rules into alignment with the common sense business practices of community banks.”

Community Reinvestment


This Thursday, July 17, the Federal Deposit Insurance Corporation (FDIC) will host its next banker teleconference. This webinar will focus on recently revised interagency questions and answers regarding Community Reinvestment.  The teleconference is free, but advance registration is required.  The call will last approximately 90 minutes, running from 1:00p.m. to 2:30p.m. CDT.

To submit a question in advance of the webinar, click here to do so via email.  To register for the call, please click here.

Silver Alert: July 14, 2014


AFFECTED TEXAS COUNTIES AND/OR NWS REGIONS:

Bastrop, Blanco, Burnet, Caldwell, Hays, Lee, Travis, and Williamson Counties

THIS IS A MISSING SENIOR ALERT ISSUED BY THE TEXAS SILVER ALERT NETWORK

The Travis County Sheriff’s Office is searching for Antonio Barboa Perea, diagnosed with a Cognitive Impairment, Hispanic, Male, 86 years old, DOB 01/17/1927, HEIGHT 5’ 6”, WEIGHT 160 lbs, Grey Hair, Brown Eyes, Blue Pajama Shirt and Maroon Pajama Pants.

The senior citizen was last seen at 0500, 07/13/2014 at Evelyn Road

Law enforcement officials believe this senior citizen’s disappearance poses a credible threat to his own health and safety.

If you have any information regarding this missing senior citizen, contact the Travis County Sheriff’s Office at 512-974-0820.

News Media Point of Contact is Travis County Sheriff’s Office at 512-974-0845.

Baker Market Update: July 14, 2014


The minutes of the FOMC’s June meeting were released this week, and they gave us no hint as to where LeBron will be playing basketball next year. We do know, however, that the Fed’s asset purchase program known as QE 3 will be coming to an end come October. While Janet Yellen has been publicly maintaining that there is no pre-set course for the tapering of bond purchases, the minutes reflect that the committee plans to continue its monthly reductions of purchases at a pace that will make October’s planned $15B investment the final act of quantitative easing. That can’t happen soon enough for St. Louis Fed President James Bullard who, in a telephone interview this week, continued to express his long-held view that current estimates of inflationary expectations are too low, and that continued pursuit of an ultra-low rate policy will lead to artificially high price bubbles. Like that could ever happen.

Read more in the Baker Market Update.

Minimum Wage


On February 12, President Obama issued an Executive Order establishing a minimum wage of $10.10 for federal contractors. 

At the time that the order was issued, it was unclear how the Department of Labor (DOL) would define “new contracts” and whether banks may be included due to the fact that DOL has routinely considered them to be federal contractors. 

IBAT has been monitoring the proposed minimum wage rule and is pleased with the current draft, which excludes independent agencies. At this time, no IBAT member action is required. We will continue to monitor the rulemaking and advise members of the outcome when it is finalized. 

The Texas Independent Banker


The July/August edition of IBAT’s magazine, The Texas Independent Banker, will arrive in your mailbox this week, and the online edition is now available for you to view.  Feature articles in this edition include:

Click on the full online edition to view more, including the General Counsel’s Corner and Compliance Guy resource articles.

Guidance Issued


Last week, four federal regulatory agencies and the Conference of State Bank Supervisors (CSBS) issued guidance to financial institutions regarding home equity lines of credit (HELOCs) nearing their “end-of-draw” periods, which occur when the principal amount of the HELOC must begin to be repaid.  The guidance encourages financial institutions to effectively communicate with borrowers about the pending reset and provides broad principles for managing risk as HELOCs reach their end-of-draw periods.

The agencies and CSBS recognize that some borrowers may find it difficult to make higher payments or to refinance their existing loans due to changes in their financial circumstances or declines in property values.  When borrowers experience financial difficulties, financial institutions and borrowers generally find it beneficial to work together to avoid unnecessary defaults.  

The guidance describes how financial institutions can effectively manage their potential exposures under these circumstances and promotes an understanding of potential exposures. It also describes consistent, effective responses to HELOC borrowers unable to meet their contractual obligations.  The appropriate accounting and reporting procedures for HELOCs nearing their end-of-draw periods are also discussed.

The Case Against Disparate Impact


Community bankers around the country have been, understandably, frustrated by a spate of fair lending referrals made to the Department of Justice by federal regulators over the past several years.  Bankers have questioned the efficacy of the referrals and the potential impact on lending as a whole. Yesterday, in an opinion piece in American Banker, Peter Weinstock of Hunton & Williams provided a well reasoned and articulated summation of his belief that the referrals, based largely upon disparate impact regression analysis, might be hurting the very population they were designed to protect.

Weinstock cites a 2011 settlement between the U.S. Department of Justice and Nixon State Bank which targeted the bank’s small-dollar loan program.  Following the settlement, interest rates on loans in the program rose from below 10% to 18%, with no discretion provided for funds on deposit, credit history or length of relationship.  This, effectively, shrank the portfolio of loans in the program by half.

“Intentional discrimination should not be tolerated, but we should question the benefits of disparate impact theory for fair lending enforcement,” Weinstock wrote.  “By forcing everyone to aim to the highest common denominator created by expensive testing related to a mathematical model, the impact is hurting everyone.”

Leadership Conference Photos


As promised in last week’s Bottom Line, the pictures from the 29th Annual Leadership Conference are now available online!

Thank you, again, to all who were able to attend the event and don’t forget to save the date for the 30th Annual Leadership Conference, June 11-13, 2015 at the Hyatt Hill Country Resort and Spa in San Antonio.

40th Annual Convention


We are pleased to announce that registration for IBAT's 40th Annual Convention, September 27-30, is officially open. We hope that you have received your copy of the brochure in the mail last week. If not, you may download a digital copy here and learn about all of this year's offerings, which include:

  • chairman's tailgate party,
  • regulator roundtables,
  • banker to banker resource sharing,
  • exhibitor stage demos, and
  • learning labs.

Baker Market Update: July 7, 2014


While [Friday] morning’s jobs report from the BLS didn’t set any records on the order of American goalkeeper Tim Howard’s 16 save performance against Belgium, the 288k increase in Non-Farm Payrolls did help bring the Unemployment Rate down to 6.1%, and that’s almost a six-year low. But wait, that’s not all; thanks to toppage time, April numbers were revised from +282k to +304k, with May’s recount moving from +217k to +224K. Elsewhere in the report, we learned that the Labor Force Participation Rate remained unchanged at 62.8% for the third month in a row, with the Employment-Population Ratio moving to 59% from 58.9%. With market articipants only expecting a +215k rise in the jobs count, initial market reaction has been fairly muted with a modest sell-off all along the Treasury curve. 

Read more in the Baker Market Update.

Financial Literacy Summit


If you've been struggling with ideas for how to define and get started with a financial education approach in your market, puzzle no more. Just register for and attend the upcoming Financial Literacy Summit. Or if you cannot attend, cultivate another champion in your bank to come to this interactive conference.

In addition to three peer-to-peer learning panels on what is going well with various bank programs across Texas,the Summit will include information on new TEA financial literacy standards, and ways to help your small business customers be better prepared for the loan process. Additionally, you will hear four bank Presidents/CEOs share their views on why financial education is an important outreach in their bank. Our guest speakers include:

  • Mack Neff, Integrity Bank Houston,
  • Jimmy Campbell, Community Bank, Granbury,
  • Jeff Wilkinson, Pioneer Bank, Dripping Springs, and
  • Tee Dippel, Brenham National Bank.

Happy 4th!


In observance of the July 4th holiday, the IBAT offices will close at noon on Thursday, July 3rd and will remain closed through Friday, July 4th. Regular business hours will resume on Monday, July 7th. 

We hope that the holiday is an opportunity for all IBAT members to enjoy time with family and friends, as well as to reflect on the freedoms we enjoy and the ongoing sacrifices made by many to ensure them. Happy 4th of July!

Northstar Bank of Texas


There is a great deal of excitement happening at NORTHSTAR BANK OF TEXAS these days. On May 15th, Tom C. Nichols, Chairman and CEO of Carlile Bancshares, Inc, parent company of NORTHSTAR BANK, announced plans to purchase Community Bankers, Inc. and its 10 Community Bank locations in the North Texas area.  These new banking centers will become NORTHSTAR BANK OF TEXAS when the acquisition is completed during the fourth quarter of this year.  

Tony R. Clark, President and CEO of NORTHSTAR BANK OF TEXAS, stated:  “This is such an exciting time in our bank’s history.  The addition of Community Bank will result in the combination of two banks with a long history of growth and success in the markets they serve.  Both teams comprise a high level of experienced and professional bankers, who deliver quality products and services.  In addition, both have developed a strong culture of maintaining a personalized style of banking with their customer base throughout the years.    

NORTHSTAR BANK continues to be the largest community bank in Denton County and one of the largest in the Dallas / Fort Worth area.  For the sixth straight year, NORTHSTAR BANK OF TEXAS has brought recognition to the region, when they were once again named as one of the Best Companies to Work for in Texas for the year 2014 by the Texas Monthly magazine. They were also named as one of the Best Banks to Work For in 2013 by American Banker and Best Companies Group.

Once the merger of the two banks is complete, NORTHSTAR BANK OF TEXAS will be comprised of 27 banking centers located in Central Texas and North Texas, and will have $1.6 billion in assets.  

Contact: Michele Barber | 940-383-6211 or mbarber@nstarbank.com

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