Call for Nominations

Nominations are now being accepted for the Teaching Excellence in Financial Literacy Award.  The IBAT Education Foundation-hosted program recognizes elementary, middle and high school teachers who use innovative, fun and effective methods to teach financial education in the classrooms.

Three award recipients from across the state will be selected, and each will receive $1,000. Additionally, IBAT and local community bankers will recognize the winners during ceremonies at their schools. The goal of this award program is to celebrate teachers who provide their students with the foundation necessary - understanding savings and credit, how to budget and the importance of making informed decisions - to make sound financial decisions for the rest of their lives.

Bankers can nominate teachers from their area schools by downloading and completing the nominations packet.

Staff contact: Mary Lange, mlange@ibat.org, 512-275-2224

New Regulations

As the new CFPB mortgage rules rolled out last week, IBAT began collecting data on community bank response to the rules via a short, five minute survey.  

"Over the last year, we've heard from a number of IBAT members who have said they'll be pulling back or ceasing to make mortgage loans in light of the new rules," IBAT President and CEO Chris Williston said. "While we've passed these anecdotes along to lawmakers and regulators, we have received requests for more data on the industry's response," he added. "The survey will provide us with the requested information."

The four questions in this survey will give those of you who make mortgage loans (and those who don't) an opportunity to express your opinions on how regulations have and will restrict credit on Main Street. All IBAT member banks are encouraged to complete the survey, regardless of whether or not your bank is currently engaged in residential mortgage lending.  The answers we receive from those of you who are not engaged in mortgage lending are as important as the answers from our mortgage lending members.

Additionally, as your bank continues to encounter various issues in adapting to the new mortgage rules, we encourage you to send specific information on your challenges to Shannon Phillips, IBAT Deputy General Counsel.

More than 90 IBAT members have already answered the survey.  One banker summed up the rules' effect on credit availability in simple terms - "what a nightmare."   Click here to complete the survey.


On its website last week, the CFPB called the Ability-to-Repay and Qualified Mortgage rule (ATR/QM rule) "a 'back-to-basics' approach to mortgage lending that will protect consumers from the debt trap of a mortgage they can't afford" and added that it is "a common-sense approach policy that responsible lenders have already been following for decades."  This comment seems to presume that the ATR/QM rule provides the exclusive method for responsible mortgage lending.  For generations, without an ATR/QM rule, Texas' community bankers have made the mortgages their customers wanted and could afford to repay. Texas' community bankers will continue to make mortgage loans their customers can afford; however, the ATR/QM rule may cause some to leave the market while forcing others to stop offering the loans their customers want.

The CFPB posted a number of items on its website in the past week, mostly geared toward mortgage consumers. We have compiled them below:

USA Today Op/Ed: New mortgage rules protect American dream.

The Texas Independent Banker

The January/February edition of the IBAT magazine, The Texas Independent Banker, is now online.  This opening issue of 2014 focuses on hot topics facing the banking industry, including:

Additionally, the issue includes IBAT's 2014 Education Calendar and a look ahead to TechMecca 2014.

Week in Review: January 10, 2014

For many folks across the country, the week’s biggest news was how frigid the weather has been. Well, not to be outdone by the polar vortex, the Bureau of Labor Statistics (BLS) released their first jobs report of the New Year this morning and it too, is a bit chilling. While the .3% drop in the Unemployment Rate (now 6.7%) might warm the hearts of some, the trifling addition of only 74k to Non-Farm Payrolls left many job seekers out in the cold. Last month’s number got better, though, as it was revised to 241k from 203k. Cold comfort for the 10.4 million people still unemployed. Also not encouraging was another .2% drop in the Labor Force Participation Rate to 62.8%. That’s a .8% drop for all of 2014. The Employment/Population ration was unchanged for the same period at... Read more in the Baker Market Update.

Winter Summit Early Bird Pricing

Time is running out for "early bird" pricing and guaranteed hotel accommodations for Winter Summit XIV, February 9-11 in South Lake Tahoe. January 13th is the cutoff date for both, after which registration rates will increase and room rates and availability cannot be guaranteed.

Join top Texas bank regulators, attorneys and your colleagues for a meaningful learning experience in a relaxed and beautiful setting. Registration and additional information can be accessed here.

Happy Anniversary!

IBAT would like to congratulate Dublin National Bank on 100 years for community banking in Texas.  Shannon Phillips, IBAT’s Deputy General Counsel, was on-hand during the celebration in December and presented the bank with a resolution on behalf of the IBAT Board of Directors. 

The bank, organized by John G. Harris, R. W. Higginbotham, Dr. T. Y. Lewis and H. A. Smith, was chartered in February of 1893 and remains in its original location - at the intersection of Patrick Street and Elm Street. It was the first bank in Erath County and fifteenth in the state. Turns out Dublin Ben Hogan is not the only famous thing to come out Dublin.

IBAT AM Success

NEW YORK, Oct. 31, 2013 /PRNewswire/ -- Newtek Business Services, Inc. (NASDAQ: NEWT) (www.thesba.com) The Small Business Authority®, today announced that its subsidiary, SBA-licensed 7(a) non-bank lender, Newtek Small Business Finance, Inc. ("NSBF"), has been selected to service a $400 million portfolio of SBA 7(a) loans for a large institutional client. The servicing has transferred and is currently part of Newtek's loan servicing portfolio.

Barry Sloane, Chairman, President and Chief Executive Officer of Newtek Business Services, Inc. said, "We are extremely pleased to announce that our total loan servicing portfolio has exceeded $1.0 billion, a level that not only represents a milestone in the Company's operating history, but also exceeds our previously stated expectation, of at least $700 million for 2013, by a meaningful margin.  Our ability to add this $400 million in loan servicing further demonstrates our industry-recognized expertise as a Standard and Poor's select-rated small-balance commercial loan servicer.  We expect to continue to grow the loan servicing aspect of our business across all 50 states through a combination of organic growth in loan origination volume and through the disciplined acquisition of third-party loan servicing opportunities.  As such, during our third quarter 2013 financial results conference call on November 6, 2013, we look forward to updating our servicing portfolio guidance for 2013, based on the recent addition of $400 million in loan servicing, as well as issuing new guidance for 2014 regarding our loan servicing portfolio."

About Newtek Business Services, Inc.

Newtek Business Services, Inc., The Small Business Authority®, is a direct distributor of a wide range of business services and financial products to the small- and medium-sized business market under the Newtek® brand. Since 1999, Newtek has helped small- and medium-sized business owners realize their potential by providing them with the essential tools needed to manage and grow their businesses and to compete effectively in today's marketplace. Newtek provides one or more of its services to over 100,000 business accounts and has positioned the Newtek® and The Small Business Authority brands as a one-stop-shop provider of such business services. According to the U.S. Small Business Administration, there are over 27.5 million small businesses in the United States, which in total represent 99.7% of all employer firms.

Newtek Business Services, The Small Business Authority ®, provides the following products and services:

  • The Newtek Advantage™: A mobile real-time SMB management platform that puts all of a business's critical transactions and economic, eCommerce and web site traffic data on a smartphone, tablet, laptop or PC. The Newtek Advantage™ provides the intelligence that businesses require and will give them the advantage to succeed.  This revolutionary platform will allow owners and operators of small- and medium-sized businesses to manage their businesses from their mobile device anywhere, anytime, all without an IT department.
  • Electronic Payment Processing: eCommerce, electronic solutions to accept non-cash payments, including credit and debit cards, check conversion, remote deposit capture, ACH processing, and electronic gift and loyalty card programs.
  • Web Hosting:  Full-service web host which offers eCommerce solutions, shared and dedicated web hosting and related services including domain registration and online shopping cart tools.
  • eCommerceA suite of services that enable small businesses to get up and running on-line quickly and cost effectively, with integrated web design, payment processing and shopping cart services.
  • Business Lending: A broad array of lending products.
  • Insurance Services: Commercial and personal lines of insurance, including health and employee benefits in all 50 states, working with over 40 insurance carriers.
  • Web Services: Customized web design and development services.
  • Data Backup, Storage and Retrieval: Fast, secure, off-site data backup, storage and retrieval designed to meet the specific regulatory and compliance needs of any business.
  • Accounts Receivable Financing: Receivable purchasing and financing services.
  • Payroll: Complete payroll management and processing services. 

The Small Business Authority® is a registered trade mark of Newtek Business Services, Inc., and neither are a part of or endorsed by the U.S. Small Business Administration.

Note Regarding Forward-Looking Statements

Statements in this press release including statements regarding Newtek's beliefs, expectations, intentions or strategies for the future, may be "forward-looking statements" under the Private Securities Litigation Reform Act of 1995.  All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include, among others, intensified competition, operating problems and their impact on revenues and profit margins, anticipated future business strategies and financial performance, anticipated future number of customers, business prospects, legislative developments and similar matters.  Risk factors, cautionary statements and other conditions which could cause Newtek's actual results to differ from management's current expectations are contained in Newtek's filings with the Securities and Exchange Commission and available through http://www.sec.gov.

For more information, please visit www.thesba.com.

Newtek Business Services, Inc.
Barry Sloane
Chairman and CEO

TruPS Update

In case you missed it, federal regulatory agencies shocked the banking community right before the holidays by forcing banks to divest trust preferred collateralized debt obligations (CDO's) by July 15, 2014 and to immediately recognize the impairment before year-end 2013. The edict was but one aspect of the interim final rule implementing Volcker.

Enter the ICBA and ABA.  Both groups protested loudly, and the ABA filed suit delaying implementation and necessary write downs under "other than temporary impairment" (OTTI) accounting standards. A decision by regulators and response to the suit is set on or before January 15.

"We have very few community banks in Texas that actually hold TruPS paper of other financial institutions but when one or more of our member financial institutions are affected, we will do everything we can to help," IBAT President and CEO Chris Williston said.  "Obviously we are pleased that the national trade associations have engaged on this important issue."

If community banks are forced to write these down it is likely they will have to do so for pennies on the dollar resulting in a permanent loss of capital rather than holding these investments to maturity.

News reports late last week have indicated that the federal agencies are looking seriously at reversing the ruling for all banks holding TruPS, or at the very least, excluding banks under $15 billion in total assets consistent with provisions of the Dodd-Frank Financial Modernization Act.

Stay tuned for further developments.

Paying for Target's Breach

With banks racking up hundreds of thousands of dollars in expenses to reissue debit cards following Target's pre-Christmas data breach, IBAT President and CEO Chris Williston issued an op-ed statewide yesterday calling for greater merchant responsibility.  

Williston called attention to the Durbin Amendment of the Dodd-Frank Act, as well as inaction by state legislatures to require merchants to adhere to minimum card security standards, as contributing factors harming community banks, especially following a large-scale breach of this nature.

"Isn't it time our courts and elected officials get serious about the responsibilities of operating a business establishment and ensuring that consumers and their cards are protected, or at the very least bear the full cost of all losses associated with compromised financial data," Williston asked.

"Seems only fair to me," he added.

TechMecca 2014

We invite you to register for TechMecca 2014!  This year's event theme is C (compliance) - O (operations) - R (risk management) - E (enterprise efficiency)!

Risk management sessions include:

  • The Lurking Menace: Cybercrime, Data Security and Privacy Rights;
  • The A to Z’s of Vendor Management; and
  • Emerging Technologies: IT & Operations in Light of Financial Reform.

Conference Registration Fees (Three-for-One Pricing)
$695 for up to three attendees from the same financial institution if registered at the same time.  You must pre-register to be eligible for this offer.  No free registrations will be granted on site.  Each additional or any single registrant will be $445 per person.

CFPB Update

The CFPB's Office of Financial Institutions and Business Liaison asked that we pass along to our members a letter from Director Cordray addressed to community banks. The letter addresses the residential mortgage rule changes and highlights the information in the QM/ATR one-pager on their website, and especially notes the QM definitions for small creditors. 

If you have any questions for the CFPB regarding this letter or the residential mortgage rule changes, please do not hesitate to contact us.