IBAT Goes Mobile

the official mobile application of the Independent Bankers Association of
Texas, is now available for download for iPhone and iPad users. The app, which
gives Texas community bankers mobile access to industry news, education
opportunities and the extensive archive of more than 500 past Legal Ease items,
is the first application of its kind developed by a state community banking

the video below to learn more about the application. Click here from
your iPhone or iPad to download the app now!

2013 Legislative Session

the 83rd Texas Legislature is still four months away from convening,
and most of the attention these days is on the elections and the continuing
onslaught from our federal government, IBAT has also been gearing up for the
upcoming legislative session.

has consistently offered legislative recommendations to benefit your bank, and
this session will be no exception. Your Legislative Committee reviewed and
discussed a number of issues, and has developed a recommended proactive agenda
to pursue. As per policy, the full IBAT Board of Directors reviewed and
approved these recommendations as well. Several of these issues are still
"in flux," and you will be kept apprised as the process moves

areas of focus will include:

  • Tax Lien Lenders
  • Service on Financial Institutions
  • Mortgage Payoff
  • Debit/Credit Card Fraud  
  • Home Equity

information is available on our website.  As always, we encourage you to let
us know what we can do in the legislative or regulatory process to address any
of your concerns.

Financial Literacy

the majority of Texas public school students began their 2012-2013 school year
this week, the employees of Town and Country Bank - Stephenville are gearing up
once again to take financial literacy education into area schools via the
Junior Achievement program.  

in all, about fifteen Town and Country Bank employees will have a presence in
area middle and high schools during the year ahead, in addition to speaking
opportunities for elementary schools and at Tarleton State University.
 Junior Achievement - Fort Worth Chisholm Trail, Inc. will reach
approximately 400 high school and 250 junior high students this year.  

Brown, Senior Vice President for the bank, is the program's champion. "There
was a time when people would turn to their banker for all kinds of financial
advice," Brown said, "but now people seem to steer clear. We're hoping
that being present in schools lets students, parents and teachers alike know
that community bankers are community resources." 

year, Town and Country Bank is teaming up with small business people in the
community to partner in bringing financial education into the classroom. "We
want local businesses to get on board to support Junior Achievement,"
Brown said, "so, we've invited them to team up with our employees to bring
the curriculum to students."

asked what makes him so passionate about financial literacy, Brown gets
serious, "I wish that someone had shared this information with me when I was in
school. I don't want any of our area students to be saying that twenty or
thirty years from now."

CFPB-proposed Rules

the past several weeks, the CFPB has issued a flurry of proposed and final
rules.  We realize that keeping up with this information is, at times,
overwhelming. However, it is vitally important that the CFPB hear from
community bankers on a number issues.  

Currently, there are 14 proposed rules with open comment periods. Most notably,
on July 9, 2012, the CFPB issued a 1099 page proposal combining the RESPA and Truth-in-Lending
disclosures. The rules and guidance on the three page combined disclosure
comprise over 400 pages of the proposal. IBAT is particularly concerned by
changes to the APR calculation, change circumstances, the counseling
requirement, tolerances for settlement charges, and the total interest
percentage and lender cost of funds disclosures. IBAT is analyzing this proposal
and will submit a comment letter.

IBAT has compiled a list of the seven most critical proposed rules
that are still open for comment.

September 3, 2012

observance of Labor Day, the IBAT offices will be closed on Monday, September
.  We will reopen for regular business hours on Tuesday, September

Best of 100

last year's Convention, we initiated a new twist to the PAC Auction - Best of
100.  Purchase a $100 ticket and if your ticket is drawn just prior to the
Live Auction on October 8, you will have your choice of any item in the Live
Auction.  Remember that all proceeds benefit the IBAT PAC. 

Due to state ethics laws, only personal checks and personal credit cards can be
accepted as payment. Click here to purchase your ticket.

Make Your Voice Heard in 2013!

are now set for both the IBAT Community Banking Day at the Capitol and the 21st Annual Congressional Visit.

your calendar now for March 5-6 and plan to be in Austin to discuss pressing issues facing
community bankers in the 83rd Regular Session of the Texas Legislature. In this
newly redesigned event, participants will attend a briefing and dinner on March 5, followed by breakfast with members of the Texas House and Senate on March 6.
A room block will be provided at the Radisson on Town Lake.  Registration
details to follow.  

community bankers will join community bankers from across the U.S. for a
coordinated "fly-in" at the 21st
Annual Congressional Visit, April 23-26
in Washington, D.C.
 All participants will have the opportunity to take part in timely
briefings with lawmakers and regulators, and have ample time as well for
individual visits with members of Congress on the Hill.

new regulations continue to threaten the franchise of community banks, your
participation in both of these events is highly encouraged.  

Be Prepared!

As Texas prepares to mark the one year anniversary of the Bastrop wildfires and the Gulf Coast braces for the effects of Hurricane Isaac, it's a good time for community bankers to revisit their disaster preparedness efforts.  Below are links to various publications issued by regulators over the past several years to assist financial institutions with disaster preparation.   

In addition to these links, IBAT offers a FREE emergency hotline system for use by member banks to assist you in keeping in touch with your employees in the event of a natural disaster or other business-disrupting event. Click here to revisit the extensive Disaster Preparedness article prepared by IBAT staff during the horrific wildfire outbreaks of 2011.

Basel III

date, only 9,000 community bank employees nationwide have signed the Basel III petition issued by ICBA.  While we
realize that capital rules are not front and center in the concerns of many
employees who are tasked with day to day operations in the bank, it is
extremely important that we send a strong message that Basel III will
irreparably harm the community banking industry.

encourage ALL employees of your bank to take approximately one minute to sign
the petition.

Appraisals Summit

federal regulators proposed a rule to establish new appraisal requirements for
"higher-risk mortgage loans" as mandated by the Dodd-Frank Act. A
mortgage loan is higher-risk if it is secured by a consumer's home and has an
interest rate 1.5 percentage points above the average prime rate. Under the
proposed rule, lenders would be required to disclose to mortgage applicants information
about the purpose of the appraisal and provide consumers with a free copy of
any appraisal report. Lenders would also have to obtain an additional
appraisal, at no cost to the consumer, for a home-purchase higher-risk mortgage
loan if the seller acquired the property for a lower price within the previous
six months.

the CFPB issued a proposed rule that would amend Regulation B and would require
creditors to provide mortgage applicants with a copy of written appraisals and
home value estimates.  Creditors would have three days after receipt of an
application to inform consumers of their right to receive a free copy of an
appraisal report or home value estimate used in connection with the
transaction.  Under the proposed rule from the CFPB, creditors could still
charge reasonable fees associated with conducting appraisals and home value
estimates; however, the rule would prohibit creditors from charging consumers
fees for obtaining the reports.  IBAT will be issuing comment letters arguing
against the proposed appraisal rules because they would increase the cost to
borrowers and may be unworkable in rural Texas communities. The joint proposed
rule is available here. The CFPB proposed rule is available here. The public has until October 15 to comment
on each proposal.

IBAT is offering a Summit dedicated entirely to appraisals on August
30, 2012. Topics range from an overview of the appraisals process to compliance
with applicable real estate regulations.

IBAT Emergency Hotline

Ice Storms, Hurricanes, Tornadoes, Fire: How Would You Communicate With Your Staff?

Do you have a way to communicate to your staff in the aftermath of an emergency or natural disaster?  IBAT established a FREE hotline/voice mail box (and web access - under construction) for each of its members as an option for Disaster Recovery or Business Continuity Plans.  Simply assign two contact people (a primary and a secondary) and send them this link to print and read:  http://www.ibat.org/pdfs/2009/04/07/ibat-emergency-hotline-instructions.  Pre-enrollment is required, but it's easy!  Hopefully you'll never need this service, but if you do, IBAT's ready.

Each firm must pre-register to participate. It's FREE and EASY.

This benefit is courtesy of your IBAT membership. 

Major Reg Z and RESPA Changes

CFPB issued two sets of proposals aimed at mortgage servicers. Among the
changes proposed for Regulation Z are "clear" monthly mortgage statements, a
warning before interest rate adjustments, options for avoiding forced placed
insurance, and information and options for avoiding foreclosure. Among the
changes proposed for RESPA are rules for crediting payments, maintenance of
information, requirements for handling alleged errors, servicer access for
delinquent borrowers, and review of application for foreclosure avoidance
options.  The CFPB proposed rule for Regulation Z is available here. The CFPB proposed rule for RESPA is
available here. The public has until October 9 to comment on
each rule.

ALM and Bank Investment Summits

Community bankers find themselves struggling
with unprecedented challenges. Among these are weak loan demand, regulatory
pressure and an uncertain loan environment. The Asset/Liability Management and Bank Investment Summits, taking place September 5
and 6, will provide a regulatory update, touching on strategic planning,
current regulatory hot buttons, examination preparation and capital planning.
In the presentation, we will also provide a brief overview of the Basel III
proposals, including the revisions to regulatory capital requirements and
risk-weighting of bank assets.

Don't miss out on important regulatory guidance and lively discussion with
fellow bankers.

IBAT Legislative Day

the date for IBAT's Community Banking Day at the Texas Capitol, March 5-6
in Austin
.  Originally, IBAT planned on holding the event in February, but
decided to push it back to line up with committee appointments and the
commencement of the legislative process in earnest.

wave of retirements and primary upsets has set the stage for a very different
composition of the Texas Legislature," said IBAT Executive Vice President
Steve Scurlock. "We felt that the legislative priorities of IBAT members
would be better served by letting the smoke clear at the beginning of the
session and getting bankers in front of their lawmakers when the real work is
being done."

IBAT Community Banking Day at the Texas Capitol is
the only event specifically dedicated to voicing the concerns of Texas
community bankers.

Tee Off for the PAC

Be sure to
register for the 25th
Annual Leadership Golf Classic
being held in conjunction
with our upcoming Annual Convention, October 6, at the Twin Creeks Country Club
in Cedar Park.

The Florida
Scramble begins with a 1:30 pm shotgun start.   Your $175
registration fee benefits the IBAT PAC (personal check or credit card...no
corporate checks may be accepted).  We hope you will consider joining your
community bank colleagues from across Texas for a great day of golf at a
wonderful venue - and support a most worthy cause!  For additional
information and a registration form, please click here

deadline is September 14th.

Mind Your P’s, Q’s and SQLs

By Jeff Multz, Vice President, Dell SecureWorks

The following article
originally ran as a feature in the July/August
of The
Texas Independent Banker Magazine

Cybercriminals are out to get you.

It sounds amazing, but hackers can easily
sneak into a bank's website and network through Web pages that contain an open
field, or boxes into which computer users type a username or password.

Using Web application attacks, cyber
criminals can steal funds, private information and entire databases from

Computer programmers create Web pages using
code, or computer language, such as HTML or JavaScript.  Typically, programmers are tasked with
creating an application that works and getting it to the client as quickly as
possible.  So, if a bank wants a
programmer to create an application that allows its clients to transfer money
or write a check, programmers create the application as quickly as possible.  And when the application works and online
users find it easy to navigate, the bank and customers are happy.  At least for a while.

Often, programmers either don't know
how to write code securely or don't take the extra time to do so.  Unless banks check the code with a security
expert, they don't realize that the code may contain holes, or
"vulnerabilities," which could allow intruders to hack the website and access
files on its computer network.

While hackers use many methods to
breach websites, one of the most popular methods is called "SQL injection."  That is when a hacker injects malicious code
into an open field.

For example, in
the slot where someone should enter a username, a hacker could type in a code,
something like "OR 1=1#>."  Once the
hacker enters the malicious code, the hacker could acquire access to the
administrative part of the bank's website, change the way the website looks and
obtain access to any documents on the network.  That might include company trade secrets, as
well as clients' usernames, passwords, and bank account information. 

Many bank executives think that just
because they are "Web compliant" their system is safe.  Basically, compliance rules tell banks to be
sure to lock the doors and windows of their website so no hacker can get in.  But the rules don't show where the doors and
windows are or how a business can lock them.  And just because the doors are all locked one
day, doesn't mean they remain locked 24x7x365.

While it's great to be "compliant," it
doesn't ensure safety.  Numerous
financial institutions that have been compliant have been hacked, losing
hundreds of millions and loss of their good reputations.  For their own safety, banks would be better
off approaching security first and compliancy second, because compliancy will
not necessarily keep a company secure.  A
good security consultant will automatically review the steps a company should
take in order to be secure and

So what should an organization do to
be secure?  Plenty. Unfortunately, safety takes more than any one
single layer of protection.  A multi-layered
approach to safety is the best way to keep criminals away so that they look for
easier prey.

The first thing banks should do is
hire a security expert to review the source code for all the pages on its
website.  Each time the source code is
changed to add a new feature to the website, a security expert should review

If a business does not have access to its
source code, it should employ a security expert to try to break into the site
using numerous hacking techniques.  This
is called "penetration testing" or "Web application reviews."

If any vulnerabilities are found, the
code should be fixed as soon as possible. 
Additionally, a bank should install, maintain and continuously monitor a
Web application firewall to prevent Web applications from being infiltrated
while the code is being fixed or tested.  A bank should also perform external Web
application scanning on an ongoing basis, at least quarterly and every time it
deploys new code. 

Lastly, a bank should retain security
experts to monitor its server and firewall logs 24x7x365, in real-time.  If a bank has security professionals
monitoring logs just a couple of times a day, by the time they see the
malicious activity that has hit the website, the hacker likely has acquired
access to the site's financial information and stolen the bank's crown jewels.

Jeff Multz is vice president of Dell SecureWorks, a market leading
provider of world-class
information security services
worldwide, spanning North America, Latin America, Europe, the Middle East and
the Pacific Rim. He is a former computer programmer for
financial institutions.

IBAT Salary Survey

Now is the
time to start thinking about your 2013 compensation and budget planning, so let
the Texas Community Bank Salary and Compensation Survey go to work for you!
Take advantage of salary and compensation data from community bankers across
the state to competitively position your bank and retain bank personnel with

This online
product is a subscription-based, on-demand salary survey customized to meet the
needs of your community bank:

  • Salary
    data may be submitted and updated year-round
  • All
    data is secure and strictly confidential
  • Customized
    Excel and/or PDF reports based on parameters you set
  • Historical
    data available to track trends
  • In-depth,
    useful salary information to help your bank

is key! The most immediate benefit to participation is preferential pricing but
more importantly: the more banks that participate, the more valuable the
reports become.

Get started today

Mobile Banking

DALLAS, August 13, 2012 -
Cash or credit? Soon consumers may replace both with their favorite
mobile device according to a recent survey from Dallas-based SWACHA, one
of the largest not-for-profit electronic payments associations in the
country. According to SWACHA's Consumer Insights Survey mobile banking
usage has tripled with 20 percent of those surveyed currently banking on
their phones compared to 7 percent in 2009.

more consumers use their mobile devices to make purchases the use of
cash is in sharp decline according to the survey with consumers
reporting they can go an average of 95 days without making a cash
purchase compared to 53 days in 2009.

payments are the next frontier for our industry and we expect the
service to spread quickly over the next few years," said Dennis Simmons,
AAP, president and CEO of SWACHA. "People are widely using their phones
to check their account balance and transfer money, and as financial
institutions, mobile devices and retailers adopt the technology we
expect most people to swipe their phone at the register of their
favorite stores as well."

survey revealed people currently use mobile devices for banking in a
variety of ways. 94 percent of respondents reported checking account
balances, 59 percent transfer money between accounts, 36 percent pay
bills and 18 percent make purchases.

mobile banking's increasing popularity, financial institutions must
address concerns about the security of transactions made on a mobile
device. According SWACHA's survey, 52 percent of those surveyed cited
security concerns as the primary reason they do not use mobile banking.

is our responsibility as an electronic payments resource to keep
financial institutions informed on security for mobile transactions and
help raise awareness on mobile security as more people bank on the go,"
said Simmons. "We believe mobile banking will be the personal finance
tool of the future, and we look forward to watching how people will make
payments in the coming years."

About the Survey

online survey of 600 Texas residents was conducted in August 2011 by
Decision Analyst with a confidence interval of 95 percent and a
corresponding margin of error of +/- 4 percent.  Only
those respondents who identified themselves as the person responsible
for paying household bills were permitted to complete the survey.


SWACHA-The Electronic Payments Resource®,
is one of the largest not-for-profit regional payments associations in
the country with approximately 1,100 members across the Southwest.
SWACHA is the resource of choice for financial institutions and
corporations in the areas of education, training, payments system risks
and knowledge about electronic payments.