IBAT News

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IBAT's goal is to provide a diversity of opinions and viewpoints
about national banking news.  Some news articles do not necessarily
reflect the opinion of the Independent Bankers Association of Texas.

Bernanke: Teach us out of the next crisis
By Jennifer Liberto, senior writer

WASHINGTON (CNNMoney.com) -- Fed Chairman Ben Bernanke told a crowd of schoolteachers in Washington Thursday they can help prevent the next big financial crisis by teaching students personal finance basics of saving and budgeting.

"One of the main lessons of the crisis is we, as citizens, need to be responsible for our own financial dealings," said Bernanke, who asked teachers to make financial literacy an essential part of lesson plans. "We can't put everything on government. We can't put everything on Wall Street. Part of it is our responsibility" ... read more.

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We have received numerous
inquiries over the past weeks regarding a proposed 1% financial
transactions tax purportedly being recommended by the Obama
administration.  Here's the scoop . . . there is a bill,

HR 4646, that was filed by Rep. Chaka Fattah (D - PA) in February of
2010.  The bill would tax most financial transactions (paid by check,
debit/credit card or cash) at a 1% rate, with rebates to those making
less than $125,000 per year.  The revenue generated
would reportedly pay off the national debt and allow for a phase out of
the individual federal income tax.  The bill was referred to several
jurisdictional committees, has not had a hearing and does not have a
single cosponsor.  There is absolutely no indication
that anyone in the Obama administration thinks this is a good idea. 
The chances of this proposal "getting legs", or even being considered,
are slim at best.

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Highlights From Sunday, September 26 at the IBAT 36th Annual Convention:

• Pat Hickman of Happy State Bank wins the 2010 IBAT Chairman's Award
• IBAT President & CEO Chris Williston unveils the IBAT Window Decal
• Milton McGee is announced as the IBAT Member Relations Ambassador
• A busy exhibit hall 
• An amazing Songwriter's Late Night Show

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H. J. "Jay" Shands III was named last week as the banking representative to the Finance Commission of Texas by Governor Rick Perry.  Jay is the President and CEO of First Bank & Trust East Texas, headquartered in Diboll.  Chris Williston, President and CEO of IBAT, said, "Jay is a well-known and respected banker.  We are delighted with his appointment to this important position, and look forward to working with him on the many important issues before the Finance Commission". 

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You can follow all of the Convention activities on the IBAT Facebook Fan Page or Twitter.  This year's Twitter hash tag for all convention
activities is #IBAT10.

We'd like to thank the IBAT Convention sponsors for helping make registration
fees a little easier on your budget.  You can click here for a complete list.

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The Financial Accounting Standards Board (FASB), has proposed accounting changes to require banks and other entities to report assets and liabilities at "fair" or "market" value, or in effect, require "mark-to-market" on virtually all components of the balance sheet.  We obviously believe that such not only is entirely incongruous with the community bank business model, but also expensive, inappropriate and just wrong.

With that said, IBAT recently filed a comment letter with FASB, and we urge you to do the same.  Please feel free to use our letter as a guide, but add both your personal thoughts and observations.  Please identify your bank's asset size and market, and any comments regarding the detrimental effect of this proposal on your bank, shareholders, customers and community would be especially meaningful.  

Deadline for comments is September 30.  You may email comments to director@fasb.org, File Reference No. 1810-100. Instructions for written submission are in the link to the proposal above.  Your attention to this important issue is appreciated. 

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The FDIC has proposed guidance on overdraft payment programs and consumer protection.  The comments are due September 27 and should be submitted electronically to OverdraftComments@fdic.gov. IBAT is submitting a comment letter on behalf of its members.  We strongly recommend that state-chartered, nonmember community banks consider filing their own comments on this proposal.  Here are some items to include your comment:

• Identify your bank, its size, and whether it offers overdraft protection programs.  (Ad hoc programs are not covered by this guidance.)
• Begin by noting that Regulation E was recently changed to require consumers to opt in to debit card coverage.  We strongly believe that this process should be given time to work.  It is simply premature to add on to the regulatory burden for overdraft programs.
• Excessive or chronic use is pegged at six transactions in a rolling twelve-month period.  Explain what the typical customer experience is for your bank.  What are the average and high usage of overdraft protection?  Do customers find this coverage beneficial?  Explain that six per year is absurdly out of touch with customer expectations!
• Banks would be required to contact customers by phone or in person to counsel them about their poor financial management practices!  Would you be able to do this or would it require hiring more staff just to man the phones? Do you already have financial literacy programs in your community?  Would your typical overdraft protection customer be able to sweep funds from a savings account or qualify for open end consumer credit?
• The proposal addresses clearing order and recommends order received or check number.  Explain your data processing challenges and whether this is feasible.
• Reg E was recently changed to require customers to receive a notice and then opt in before debit card and ATM transactions could be covered.  What was your bank’s experience with this new requirements?  How did customers respond?  
• The proposal would also suggest opt out for check coverage.  Do you already offer this?
• The proposal would appear to require daily caps on overdraft fees while the Best Practices only suggested this.  Do you have caps?  Would this be reasonable, and if so, at what level?

Here is a link to the FIL for more information.  Please review and determine whether you have additional comments!

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IBAT's goal is to provide a diversity of opinions and viewpoints about
national banking news.  Some news articles do not necessarily reflect the
opinion of the Independent Bankers Association of Texas.

USDA Announces Farm Disaster Aid
The USDA announced $550 million in disaster aid for crop farmers. Producers with a 5 percent crop loss in 2009 from floods or excessive rain are eligible for disaster aid. Senate Agriculture Committee Chairman Blanche Lincoln (D-Ark.), who urged the disaster aid, said the program will ensure nearly 90 percent of all acres in Arkansas that experienced a weather-related disaster are eligible for assistance. House Agriculture Committee ranking member Frank Lucas (R-Okla.) called on the chairman of his committee, Rep. Collin Peterson (D-Minn.), to hold hearings on the precedent set by the funding. Read USDA Summary.

Source: ICBA NewsWatch Today, read NewsWatch Today archives here.

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For more than 143 years,
customers throughout Texas have depended on the financial strength and
stability of First Victoria National Bank.

And they still do today.

As the oldest, independent bank in the State of Texas, First Victoria
successfully weathered every historic period of economic challenge, including
the Great Depression and the Texas Banking problems of the 1980's.

First Victoria has always remained committed to providing the communities they
serve with the financial products Texan‘s expect from their bank, without undue
risk.  While other financial institutions were swept up in the latest fads
in mortgages, exotic investments or speculative lending, First Victoria
remained true to its heritage and core competencies.  And though some may
call that conservative, First Victoria calls it business as usual.  First
Victoria Bankers remain focused on our Main Streets, not Wall Street.

First Victoria is well capitalized, the highest classification as defined by
the FDIC.

Today, First Victoria has in excess of $1.6 Billion in total assets. 
First Victoria is a full-service commercial bank currently serving over 70,000
customers along the Texas Gulf Coast, the I-45 corridor north of Houston, the
Brazos Valley and Fort Bend County, with 26 banking centers and 34 ATM's. 

So if you are looking for peace of mind in today's uncertain market, you need
to look no further than the safety, strength and stability of First Victoria.

IBAT features one member bank a week in the Bottom Line and on the IBAT
website.  If you'd like your bank to be included, send us a photo(s) of
your bank.  Perhaps you'd like to include how many years your bank has
been open; community projects in which your bank is involved; special staff
accomplishments or any other information you feel sets your bank apart from the
"big guys".  You may also want to include your bank's Facebook
page and Twitter account.  What a great (and easy) way to highlight your
bank, employees and directors.  Just send your information to Mae Beth at mbpalone@ibat.org and we'll see
you online!

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IBAT's goal is to provide a diversity of opinions and viewpoints about
national banking news.  Some news articles do not necessarily reflect the
opinion of the Independent Bankers Association of Texas.

Basel Committee Raises Capital Levels to 7% by 2019
American Banker  |  Monday, September 13, 2010
By Rob Blackwell

The Basel Committee on Banking Supervision announced new, higher capital standards on Sunday that essentially boost minimum common equity requirements to 7% by Jan. 1, 2019... read more.

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You can read American Banker for free through IBAT's subscription program. Click here to learn more.

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More information From the IBAT Bottom Line:

Regulators Agree on Increased Capital
The Basel Committee on Banking Supervision agreed to much more stringent capital requirements for large banks on Sunday. While former Basel agreements have had little direct impact on community banks, the bar has been raised substantially for larger institutions on a global basis. The new standards will sound familiar to community banks. Our preliminary concern is that the "unspoken disparate treatment" may result in higher capital requirements for community banks. This is clearly an issue we will take up with the regulators on a timely basis.

• Banks must have minimum Tier 1 common ratios of 4.5%.
• They also must keep a cushion on top of that of 250 basis points. That creates an effective Tier 1 common requirement of 7%.
• Regulators set the Tier 1 level – which includes preferred stock – at 6% and demanded a cushion of 250 basis points. That creates an effective rate of 8.5%.
• Banks will have until Jan. 1, 2019 to fully comply with the new standards. The phase in period will start Jan. 1, 2013.

Additional information will be forthcoming. Please see the Wall Street Journal article from Monday for more on this issue.

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IBAT's goal is to provide a diversity of opinions and viewpoints
about national banking news.  Some news articles do not necessarily
reflect the opinion of the Independent Bankers Association of Texas.

IBAT Member Jeff Wilkinson of Pioneer Bank, SSB, along with IBAT President & CEO Chris Williston, is featured in the Austin Business Journal.

Changing of the rules
Many community bankers still evaluating Dodd-Frank Act
Austin Business Journal - by Christopher Calnan ABJ Staff

Community banks in Central Texas are still weighing the effects of the Dodd-Frank Wall Street Reform and Consumer Protection Act, two months after it was enacted... read more.

 

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IBAT's goal is to provide a diversity of opinions and viewpoints about
national banking news.  Some news articles do not necessarily reflect the
opinion of the Independent Bankers Association of Texas.

 

American Banker  |  Tuesday, September
7, 2010
By Stacy Kaper

Though Democrats scored a big political victory in passing regulatory reform,
many are already paying for it as the financial services industry directs more
of its contributions toward ... read more.

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You can read American Banker for free through IBAT's subscription program. Click here to learn more.