CSBC Vice Chair

Last month, at the Conference of State Bank Supervisors (CSBS) State-Federal Supervisors Symposium in Chicago, Illinois, Texas Banking Commissioner Charles G. Cooper was elected Vice Chair to the 2014-2015 CSBS Board of Directors. He also serves on the CSBS Executive Committee.

Commissioner Cooper served as Treasurer of the CSBS Board during 2012-2014 until his election to the position of Vice Chair. During his term as Treasurer, Commissioner Cooper served as a board member of the State Regulatory Registry (SRR) which is responsible for all policy matters governing the Nationwide Mortgage Licensing System (NMLS), and the CSBS Education Foundation Board of Trustees (EFSBS). In 2010 he served as Chair of District IV and as Chair of the CSBS Legislative Committee.

“IBAT extends its congratulations to Commissioner Cooper on this honor, and our appreciation to him and to CSBS for their energetic and effective efforts to preserve the community banking model,” said Steve Scurlock, IBAT Executive Vice President.

Commissioner Cooper currently serves as an active member on the CSBS Legislative Committee, Regulatory Committee, the MSB Task Force, the Emerging Payments Task Force, and is a member of the Community Bank Steering Group.

Coalition Letter Signed

A coalition of state community banking associations, including IBAT, signed on to a letter to House Speaker John Boehner and Leader Nancy Pelosi last week, urging action by the full House on regulatory relief bills passed recently by the House Financial Services Committee.

The letter was the latest in a series of actions in which IBAT has participated to progress some measure of regulatory relief in this Congress.  As reported, IBAT previously wrote to Pete Sessions, Chairman of the House Committee on Rules, asking the committee to bring H.R. 4521, H.R. 4466 and H.R. 2673 to the Floor.

As always, we will issue an Action Alert at the appropriate time – when floor action is scheduled – to ask that you urge your Member of Congress to support these important bills.

Fed Nominees

Two new members of the Federal Reserve Board, Governor Lael Brainard and Vice Chairman Dr. Stanley Fischer, were sworn in yesterday at a private ceremony with Fed Chair Janet Yellen.  Also sworn in was second-term Governor Jerome Powell. 

Brainard previously served as the Under Secretary of the Treasury for International Affairs in the administration of President Obama. Dr. Fischer is a former economics professor at the Massachusetts Institute of Technology (MIT) and a former Governor of the Bank of Israel.

With the swearing in of these three candidates, only one open spot remains on the Federal Reserve Board of Governors.  Earlier this year, IBAT President and CEO Chris Williston sent a letter to President Obama, urging him to nominate a community banker to fill the remaining seat.  Others, like Fed Chair Yellen, Kansas City Federal Reserve Bank President Esther George and a bi-partisan group of members of the Senate Banking Committee have joined the call for community bank representation on the Board.

2015 Legislative Agenda Set

At their quarterly meeting last week, the IBAT Board of Directors approved the recommendations of the Legislative Committee for an aggressive proactive agenda in the 84th Regular Session of the Texas Legislature in 2015. Among those items discussed and approved are:

  • Debit Card Surcharge Prohibition – IBAT was successful in attaining legislation to prohibit surcharges on debit card transactions at the last session. We will pursue legislation at the next session to provide appropriate rulemaking and enforcement authority.
  • Card Fraud/Data Breach – We have attempted over the past several sessions to make incremental progress to bring some relief to community banks in this area. One area of concern (and continuing losses for our banks) is the purchase of gift cards at point of sale with fraudulent or stolen credit or debit cards. IBAT will pursue legislation to require merchants to verify the identity of an individual purchasing gift cards with a credit or debit card.
  • Home Equity – IBAT is in discussions with various stakeholders to explore streamlining our very cumbersome home equity laws in Texas. At a minimum, we plan to address the issues raised in the recent “Norwood” decision at the Supreme Court, i.e., power of attorney and clarity in what constitutes interest and the 3% fee cap.
  • Patent Trolls – While primarily a federal issue, the ongoing problem of patent trolls is being addressed in several states. We will explore options to curtail this expensive and time-consuming burden on community banks.
  • Property Tax Lenders – While significant progress was made last session with the passage of SB 247, there are many areas worthy of additional reform. We will continue to explore options with an existing coalition of stakeholders, and anticipate several proactive agenda items.
  • Subpoena Abuse – There continue to be cases in which litigators serve large information requests to banks and then fail to reimburse the bank for the production of records. We plan to push for legislation to fix this situation.

Additionally, if history is an indicator of future expectations, there will be developing issues between now and the spring that could warrant additional legislative efforts. We obviously would appreciate any thoughts you may have on additional proactive measures at the state level, and thank you for your engagement in the process.

Leadership Conference

IBAT’s 29th Annual Leadership Conference will be underway next month, June 26-28, at the JW Marriott San Antonio Hill Country Hotel. Among the activities offered during the conference will be our annual Leadership Conference Golf Tournament, which will be held at the TPC San Antonio, a PGA Tour Experience.

The AT&T Oaks Course was designed by PGA Tour legend Greg Norman with player consultant Sergio Garcia. It reflects the Tour’s departure from the modern tournament style course (expansive grass areas and spectator mounding) to a more natural look and feel, without sacrificing the fan experience – making it very tournament friendly. The AT&T Oaks Course plays host to the PGA Tour’s Valero Texas Open.

Early bird registration deadline is this Friday, so register today!

Reg Relief Update

Ongoing efforts to move a regulatory relief agenda continued last week with IBAT writing a letter to Congressman Pete Sessions, Chairman of the House Committee on Rules, urging the committee to bring H.R. 4521, H.R. 4466 and H.R. 2673 to the House Floor.  As reported in previous weeks, these bills - which are part of the IBAT and ICBA-backed Plan for Prosperity - were recently approved by the House Financial Services Committee.

“Each of these measures represents a modicum of regulatory relief for community banks that will allow community banks to realize their full potential as catalysts for job creation and economic growth in local communities nationwide,” the letter, crafted by Chris Williston and Steve Scurlock, read. 

As always, we will issue an Action Alert at the appropriate time – when floor action is scheduled – to ask that you urge your Member of Congress to support these important bills.

June Consumer Tips

The June edition of IBAT’s Consumer Tips is now available online.  This month’s tips provide practical guidelines to help consumers answer the question, “Debit or credit?”

June’s Consumer Tips were drafted by guest-contributor Debbie Scanlon of BKD, LLP.

IBAT’s Consumer Tips are distributed to weekly papers across the state of Texas.  As always, IBAT members are encouraged to distribute the tips to their local papers, in bank publications or in any other way you'd like. A customizable version of the release is available upon request.

Help End Unnecessary Regs

The regulatory agencies issued a request for comment last week, calling on bankers to help identify outdated, unnecessary or burdensome rules.  The effort is part of the Economic Growth and Regulatory Paperwork Reduction Act which requires that regulations prescribed by the FFIEC, OCC, FDIC and Federal Reserve be reviewed by the agencies at least once every ten years.

The review process will be two years in length, with regulations relating to applications and reporting, powers and activities, and international operations being the initial three categories under review.  With this in mind, national banks might consider focusing their comments on issues related to debt cancellation contracts, investment in bank premises, real estate lending and sales of credit life. FDIC members might consider comment on activities of state banks and call report concerns. 

The comment period will be open for 90 days. In the week ahead, IBAT will provide members with additional resources to consider in crafting their comments to focus on the areas of immediate consideration. 

Operation Choke Point

The growing concern over the Department of Justice and federal regulatory agency initiatives to curb “higher risk,” but otherwise legal activities, through pressure on the banking industry (Operation Choke Point) has garnered additional visibility over the past several weeks.

First, a trade group representing payday lenders filed suit against the federal regulators seeking to terminate the guidance on “reputation risk.”  Additionally, Chairman Jeb Hensarling penned a letter to all of the regulators expressing his justifiable concerns of regulatory overreach and seeking answers to specific questions regarding this program.

ICBA has been on the forefront of this issue, and has requested any “real world” examples from community banks to help make the case for change in what we believe to be an inappropriate level of regulatory encroachment.  If your bank has been criticized or pressured to sever a relationship with a customer due to reputational risk assertions, please contact Cary Whaley, ICBA Vice President of Payments and Technology Policy.

Baker Market Update: June 9, 2014

Remember when Tom Sawyer convinced his pals that he was actually doing them a favor by letting them whitewash the fence that Aunt Polly had ordered him to paint? Clever lad. In a similar move, the European Central Bank this week announced that instead of paying interest on funds placed with them, they would now be charging .1% on those deposits. Now, the rationale behind this policy shift is the belief that negative interest rates will induce the banks that own those deposits to do something else with them. The ECB would like them to, for the good of all, make loans to entities that they have so far, eschewed, thereby helping to move the Eurozone’s economy off of high-center and stave off the mounting threat of deflation.

Read more in the Baker Market Update.

JMFA Webinar

On Monday, June 9, IBAT Endorsed Service Provider JMFA will provide a free webinar, The Latest 411 on Overdraft Regulations, which will provide insight on how to keep your overdraft program in line with current regulatory expectations.  Cheryl Lawson, JMFA’s Executive Vice President, Compliance Review will also provide an update on the firm’s continued dialogue with the CFPB on this issue.

Shelby Car Show

Dozens of rare Shelby Cobras and Mustangs, including the limited edition 50th anniversary commemorative Cobra 289 FIA, will be on display when LegacyTexas Bank in Plano hosts the fifth annual Shelby Car Show on Saturday, June 21st. Co-hosted by the Shelby Cobra Association of Texas, the annual event has grown to become one of the largest Shelby shows in the Southwest.

Aaron Shelby, LegacyTexas Bank Executive vice president, predicts this year’s show will be the best yet. “In addition to our friends from Shelby American joining us again this year, we will also have the very limited Cobra 289 FIA on hand,” said Shelby, grandson of the legendary auto design pioneer Carroll Shelby. “Both my family and the bank are very proud of this community event.”

The 289 FIA commemorates Shelby American’s 1964 introduction of the small block Cobra that dominated its class in many forms of racing worldwide throughout the 1960s. Only 50 limited edition continuation Cobra 289 FIAs are in production. Painted Viking Blue with Arctic White roundels, the anniversary model celebrates the Cobra that was one of the most important cars in American racing history and driven by some of the most revered drivers including Bondurant, Miles, Gurney and Hill.

The Shelby show will be held at the bank’s corporate headquarters at the intersection of Preston Road and Legacy Drive. In addition to the Shelby American models, the event will also feature rare and vintage cars from the private collection of the Shelby family, majority owners of LegacyTexas Bank.  

For more information, visit LegacyTexasBank.com/ShelbyCarShow or Facebook.com/ShelbyCarShow.

About LegacyTexas Bank

LegacyTexas Bank is an independent community bank with $1.8 billion in assets.  In business since 1963, LegacyTexas Bank currently has 20 branches throughout Collin, Dallas, Tarrant and Parker Counties. LegacyTexas Group is the financial holding company for LegacyTexas Bank and also includes LegacyTexas Insurance Services and LegacyTexas Title. Learn more at LegacyTexasBank.com.  

Overdraft Proposals

While the banking industry has been bracing for proposed rules from the Consumer Financial Protection Bureau (CFPB) on overdraft privilege, the CFPB has delayed its timeline for their release.  According to the Bureau’s own rulemaking agenda, any issuance on overdraft has been delayed from May of 2014 to February of 2015.

In the meantime, follow the Reg. E opt-in rules for one-time debit card and ATM transactions and your regulator’s publications on overdraft:

You’ll recall that the CFPB released its own white paper on overdraft in June of 2013, which according to the Bureau “highlighted a number of possible consumer protection concerns, including how consumers opt in to overdraft coverage for ATM and one-time debit card transactions, overdraft coverage limits, transaction posting order, overdraft and insufficient funds fee structure, and involuntary account closures.”

On Monday, June 9, IBAT Endorsed Service Provider JMFA will provide a free webinar, The Latest 411 on Overdraft Regulations, which will provide insight on how to keep your overdraft program in line with current regulatory expectations.  Cheryl Lawson, JMFA’s Executive Vice President, Compliance Review will also provide an update on the firm’s continued dialogue with the CFPB on this issue.

Bankers' Resources Added

The Banker’s Resources page on the IBAT website has been enhanced with nearly four dozen resources on Consumer Compliance Management Programs.

These resources cover a variety of topics, including:

  • Consumer Compliance Program Structure,
  • Compliance Audit and Review,
  • Internal Controls,
  • Consumer Complaints,
  • Risk Assessments,
  • Social Media,
  • Mobile Services,
  • Third Party Relationships,
  • Technology Outsourcing,
  • UDAP, and
  • UDAAP.

If you follow the advice found in these resources, it should please your regulators because most of them are from the federal bank regulators.