As reported in the IBAT Bottom Line two weeks ago, IBAT2GO, the official mobile application of IBAT, was down temporarily as we underwent a migration of the IBAT website.  

Last week, Apple approved the updated version of the app, which is now available for download.  If you have never downloaded the IBAT2GO Mobile Application, click here to do so now.  If you have downloaded a previous version of the app on your iPhone or iPad, click the App Store on your device and download the update.  

IBAT2GO offers Texas community bankers instant access to IBAT's entire Legal Ease Archive, with over 500 searchable state and federal banking Q&As, along with the IBAT Calendar of Events - a searchable listing of upcoming education opportunities, and the latest banking news and original content from the IBAT website.  The app also includes a full IBAT staff directory.

CFPB Mortgage Reforms - Part 6

In order to provide additional clarification on the recently issued CFPB mortgage reforms, IBAT Regulatory Compliance Manager Kelly Goulart is releasing a series of white papers addressing each change contained in the seven major mortgage lending initiatives, six of which have been finalized by the CFPB (more or less).  

The sixth part of the series, focused on mortgage loan servicing requirements, is now online.

Previous documents in the series can be found here:
Expansion of High Cost and High Fee (HOEPA) Mortgages
Equal Credit Opportunity Act (ECOA) and Higher Priced Mortgage Loan (HPML) rules
Ability to Repay (ATR) and Qualified Mortgage Rules
Escrow requirements for HPMLs
Regulation Z - Prohibited Acts or Practices

SB 247 - Tax Lien Lending

Last week Governor Rick Perry signed SB 247, the IBAT-supported bill addressing some of the major issues related to the tax lien lending industry. While not going as far as we would have liked (and no doubt farther than those in the tax lien lending industry would have preferred), SB 247 is a positive improvement for Texas consumers and Texas community banks. Especially important to the industry is an IBAT-prompted initiative to require prompt payoff information to existing lienholders.  Among the provisions included in the final version of SB 247 are:

  • Judicial foreclosure required;
  • Tightening the requirements for sales of tax lien loans;
  • Prohibiting borrowers from waiving statutory protections through contract;
  • Requiring a notice that the taxing entity may offer installment plans;
  • Prohibiting false, misleading or deceptive solicitations, and enhanced enforcement;
  • Truth-in-Lending disclosure requirements;
  • Prohibition on tax loans to seniors;
  • Prompt payoff statements when requested by an existing lien holder;
  • Additional fee information in disclosure statements; and
  • Outlawing "evergreen" clauses, which allow these lenders to fund subsequent years' taxes without specific borrower approval or consent.

Following the Governor's signature, the Office of Consumer Credit Commissioner released a bulletin on the bill, outlining the changes in law which were made effective immediately.

IBAT is appreciative of the efforts of Senator John Carona and Representative Doug Miller (along with their outstanding staffs), who shepherded SB 247 through the process.

CFPB Ability-to-Repay

On Wednesday, May 29, the CFPB finalized amendments to the ability-to-repay mortgage rules that were issued in January. The amendments take effect on January 10, 2014.

For community banks that have less than $2 billion in assets and each year make 500 or fewer first-lien mortgages, the final rule:

  • Extends Qualified Mortgage status to certain loans held in portfolios even if the consumer's debt-to-income ratio exceeds 43 percent.
  • Provides a two-year transition period to make balloon loans under certain conditions and those loans will meet the definition of Qualified Mortgages.
  • Allows a higher annual percentage rate for certain first-lien Qualified Mortgages while maintaining a safe harbor for the Ability-to-Repay requirements.

There are also certain exceptions to the Dodd-Frank requirement that loan originator compensation be included in the total permissible points and fees for both Qualified Mortgages and high-cost loans. In the amended rule, the compensation paid by a mortgage broker to a loan originator employee or paid by a lender to a loan originator employee does not count towards the points and fees threshold. This amendment does not change the January 2013 final rule under which compensation paid by a creditor to a mortgage broker must be included in points and fees, in addition to any origination charges paid by a consumer to a creditor.

Week in Review May 31

While tapering off may be a sensible approach to ending one's smoking habit or reducing one's calorie intake, when it comes to Quantitative Easing; perish the thought. Perish too, any discussion that hints at the possibility of potentially considering even thinking about contemplating any tapering off of the Fed's pedal-to-the-metal $85B per month bond buying program. The Treasury market expressed its displeasure with such heretical notions this week as nervous bond investors took the yield on the Benchmark Ten Year up to a week-high 2.20%... Read more in the Baker Market Update.

Flags at Half Staff

Office of the Governor Rick Perry:

The State of Texas has been deeply affected by the injuries and loss of life that resulted from the recent motel fire in the City of Houston. It seems fitting that flags should be flown at half-staff on the day of the memorial service as a mark of respect for those brave firefighters who perished while serving their community.

Therefore, pursuant to Texas Government Code Chapter 3100 and acting in my capacity as the Governor of the State of Texas, I hereby direct the lowering of State of Texas flags to half-staff on Wednesday, June 5, 2013. Flags should return to full-staff on the next day, Thursday, June 6, 2013.

Please notify personnel within your agency and other state agency and university leaders of this directive. Flags should be flown at half-staff for the same length of time at all State of Texas offices and facilities in other states and abroad. Individuals, businesses, municipalities, counties and other political subdivisions are encouraged to fly their flags at half-staff for the same length of time as a sign of respect.

Anita and I send our deepest condolences and prayers to the families and support personnel touched by this terrible event.

West Relief Donations

AUSTIN, Texas—The Independent Bankers Association of Texas (IBAT) and the Texas Bankers Association (TBA) joined together to establish the Texas Bankers Disaster Relief Fund following the devastating fertilizer plant explosion in West, Texas. The donations collected through this fund will be presented to West’s POINTWEST Bank and The State National Bank on Friday, May 31, at 10 a.m. during a ceremony held at POINTWEST BANK.

Chris Williston, president and chief executive officer of IBAT, and Eric Sandberg, president and chief executive officer of TBA, will present the relief fund check to Charles Nemec, president and chief executive officer of POINTWEST Bank, and Dalbert Thiele, president of The State National Bank. These local banks are playing a key role in helping the community, including their impacted employees, rebuild and recover.

IBAT and TBA kicked off the relief fund by contributing $1,000 each. Thanks to generous donations from bankers throughout Texas, more than $143,500 in relief donations was raised. The fund will be used to provide assistance with “unfunded needs”—anything not covered by insurance or government assistance—in the West community. The purpose of these funds, which will be coordinated and led by the two local banks, is to help the community recover and move past this tragic incident.

The Texas Bankers Foundation coordinated donations, and 100 percent of every dollar collected went directly into the fund to now be used for local relief efforts.

About the Independent Bankers Association of Texas

IBAT is the largest state community banking organization in the nation with a membership of more than 2,000 banks and branches in 700 Texas communities.

About the Texas Bankers Association

TBA represents the Texas banking industry—with members ranging from the smallest bank in the nation to the largest bank in the nation. This includes 85 percent of Texas banks, 5,200 bank branches and 95 percent of Texas deposits.

FNB Hebbronville Anniversary

On Saturday, May 25, 2013, the First National Bank of Hebbronville celebrated "a century of strong and independent community banking."  Curt Nelson of IBAT attended the celebration last weekend and presented the bank with a congratulatory Resolution on behalf of the IBAT Board of Directors.  Israel Hinojosa, President & CEO of FNB Hebbronville, expressed his appreciation by saying: "We really appreciate all IBAT does for us and are proud to be members of IBAT."

The bank's website proudly displays the special 100th anniversary logo.

CFPB Mortgage Rule Clarification: Part Five

In order to provide additional clarification on the recently issued CFPB mortgage reforms, IBAT Regulatory Compliance Manager Kelly Goulart is releasing a series of white papers addressing each change contained in the seven major mortgage lending initiatives, six of which have been finalized by the CFPB (more or less).  

The fifth part of the series, focused on the expansion of HOEPA coverage and additional prohibitions, is now online.

Previous documents in the series can be found here:
Equal Credit Opportunity Act (ECOA) and Higher Priced Mortgage Loan (HPML) rules
Ability to Repay (ATR) and Qualified Mortgage Rules
Escrow requirements for HPMLs
Regulation Z - Prohibited Acts or Practices

Staff contact: Shannon Phillips, sphillips@ibat.org, 512-275-2221

How Did IBAT Fare in the TX Lege?

As the 83rd Regular Session of the Texas Legislature wrapped up Monday, only to be followed by the beginning of the First Called Special Session later in the afternoon, IBAT Executive Vice President Steve Scurlock sent the final edition of Legislative Insider detailing the events of the last week. IBAT will provide a thorough review of the 83rd Session and its impact on your bank in a free webinar, scheduled for June 25 from 3:00 to 4:30p.m. A link to register can be found here.

"We're cautiously optimistic until the Governor signs bills passed during the 83rd, but we were able to accomplish several of the items on our proactive agenda, and we consider those great victories for community banks," Scurlock said.

In particular, Scurlock highlighted the prohibition of surcharges on debit card purchases and timely payoff notice provisions in tax-lien lender legislation as two significant measures passed for the benefit of both Texas consumers and IBAT members.

"We'll take a quick moment to celebrate the work of the past 140 days," Scurlock added, "and return to our primary focus - full-scale regulatory relief efforts currently before Congress."

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-275-2226

Week in Review - May 24

In an effort to save government employees some time and trouble, they should know that if they ever want to tap the phones or read the e-mails of the Baker Market Update, they're in for an exercise in boredom. What was not an exercise in boredom [last] week was following the roller-coaster ride of the Ten Year Treasury Note. At the week's outset, that Benchmark issue was yielding in the low 1.90%'s. Wednesday's big sell-off took the yield up to near 2.05% before aimless wandering (the best kind of wandering) brought it back down to [Friday] morning's sub-2% level... Read more in the Baker Market Update.

Staff contact: Mike Mackey, mikem@gobaker.com, 512-320-0301

Memorial Day

In observance of Memorial Day, the IBAT office will be closed on Monday, May 27. Regular business hours will resume Tuesday, May 28, 2013.

We hope everyone enjoys this year's Memorial Day weekend and give pause to the tremendous freedoms we enjoy as Americans, with thanks to the many men and women who have died to ensure those freedoms.

CFPB Rural Exemption

As reported in several issues of Bottom Line, IBAT has communicated with the CFPB, in writing and in person, to attempt to get some relief from the CFPB’s defined delineation of "rural" before the Escrow Requirements under the Truth in Lending Act rule (Escrows Rule) go into effect on June 1, 2013 and require certain creditors to create escrow accounts for a minimum of 5 years for HPMLs. The rule exempts HPMLs made by certain small creditors that operate predominantly in rural or underserved counties from this requirement. On March 12, 2013, the CFPB posted a preliminary list of counties that are rural or underserved (or both).

The CFPB's blog reports that the final rule based on the proposed rule that the CFPB used to compile the preliminary list is being issued. Because the methods for determining rural and underserved status have not changed from the proposed rule, this final list is identical to the preliminary list the CFPB posted on March 12. According to the blog, "for purposes of applying the exemption in the Escrows Rule, creditors may rely on this list as a safe harbor to determine whether a county is 'rural' or 'underserved' for loans made from June 1, 2013, through December 31, 2013."

Several CFPB rules have provisions related to mortgage loans made in rural or underserved counties: Ability-to-Repay/QM rule, HOEPA homeownership counseling rule, and appraisals for HPMLs. IBAT’s map of rural and underserved counties designated by the CFPB is available on the IBAT website

Dell SecureWorks: Cyber Security

With new threats issued by hacktivists each week, cyber security is a constant concern for community bankers.  However, with proper planning, you can reduce the expense and difficulty of addressing an eventual breach.  

Jeff Multz of Dell SecureWorks recently penned a free white paper entitled "Preparing to succeed when your computer network is threatened," providing step by step instructions on developing and implementing a Computer Incident Response Plan (CIRP).