IBAT News

Reg Burden Bills Moving


In follow up to last week’s Bottom Line, the House Financial Services Committee met last week to mark up several bills of importance to IBAT members, including:

  • H.R. 2673, which confers QM status to any loan kept in-portfolio;
  • H.R. 3211, which modifies the definition of points and fees to exclude insurance and taxes held in escrow as well as fees paid to affiliated companies; 
  • H.R. 4466, which requires various regulators to assess duplicity or conflict with existing rules prior to issuance of a new rule, and also requires a review of existing regulations within 60 days of a proposed rulemaking; and
  • H.R. 4521, which exempts creditors under $10 billion from escrow requirements on in-portfolio loans and increases the small mortgage servicer exemption to 20,000.

Only one of the bills, H.R. 3211, was voted on by the Committee. Chair Jeb Hensarling announced at the end of the meeting that a vote on each of the other measures would be delayed until Congress was back from recess next week. The delay, however, was more a question of logistics than a tip off that there might be concerns with any of the other measures. As members of Congress are home in the district this week, if you happen to attend any event with members of the House Financial Services Committee, please urge their support for each of these bills.

White Paper


While community banks were spared from the worst of the Basel III rules finalized earlier this year, several issues still remain of concern to IBAT members.  In particular, some community banks are grappling with the impact of consolidated capital requirements applicable to growing bank holding companies that exceed or expect to exceed $500 million in total consolidated assets.

The consolidated capital requirements are of particular concern to banks organized as Subchapter S corporations because there are no provisions that allow for a carve out for the banks to continue making dividend payments if the corporation fails to maintain the appropriate capital conservation buffer.  While the phased-in thresholds are substantially below the capital levels currently being required by the regulatory authorities at the bank level, capital standards on a consolidated basis could prove problematic.  

IBAT Associate Member Fenimore, Kay, Harrison & Ford, LLP has prepared a white paper on this issue for the use of IBAT members.  Additionally, the Subchapter S Bank Association, ICBA and other trade groups have written letters to regulators urging the creation of carve out for S corporation shareholder dividends. The Subchapter S Bank Association letter can be found here.

The Newest IBAT Endorsement

 


IBAT is pleased to announce its endorsement of the WatchDOG® Social Compliance solution from Computer Services, Inc. (CSI). WatchDOG Social Compliance provides financial institutions with advanced compliance capabilities and protection for participating in social media across multiple online platforms.

 “Although the risk of compliance violations and the added time required to engage in these outlets has many institutions hesitant to adopt, examiners nevertheless expect institutions to monitor and manage their social presence,” said Chris Williston, IBAT’s President and CEO. “WatchDOG Social Compliance allows institutions to eliminate these apprehensions and explore the benefits of social media with a resource in place to mitigate risk.”

WatchDOG Social Compliance offers users a vast range of tools and services to further promote full regulatory compliance, including:

  • Archiving all Facebook, Twitter, YouTube and LinkedIn posts for required timeframes;
  • Creating an approval process to ensure posts meet regulatory requirements;
  • Utilizing targeted search and reporting capabilities;
  • Performing reputation and sentiment analysis; and
  • Evaluating the institution’s competitive landscape.

 IBAT’s full press release can be viewed here.

IBAT Endorses CSI's WatchDOG


PADUCAH, Ky., May 13, 2014 – The Independent Bankers Association of Texas (IBAT) has announced its endorsement of the WatchDOG® Social Compliance solution from Computer Services, Inc. (CSI) (OTCQX: CSVI), a provider of end-to-end technology solutions that empower financial institutions to remain competitive, compliant and profitable. WatchDOG Social Compliance provides financial institutions with advanced compliance capabilities and protection for participating in social media across multiple online platforms.

CSI’s WatchDOG Social Compliance solution helps those institutions new to social media, as well as more experienced organizations, more accurately follow the processes outlined within their unique risk assessment strategy. By implementing the solution, financial institutions also can more efficiently manage social media compliance with the latest regulatory requirements, allowing them to leverage social media without the risk of violating the growing list of compliance regulations.

“Consumers turn to social media outlets to publically share their opinions and experiences, so the adoption of social media for banks provides a level of insight previously unheard of just a few years ago,” said Chris Williston, IBAT’s president and chief executive officer. “Although the risk of compliance violations and the added time necessary to actively monitor these outlets has many institutions hesitant to adopt, WatchDOG Social Compliance eliminates these apprehensions and allows institutions to enjoy the benefits of social media without the added risks.”

In order to help better manage bank social media participation and strengthen brand awareness among customers, WatchDOG Social Compliance offers users a vast range of tools and services to further promote full regulatory compliance, including:

  • Archiving all Facebook, Twitter, YouTube and LinkedIn posts for required timeframes;
  • Creating an approval process to ensure posts meet regulatory requirements;
  • Utilizing targeted search and reporting capabilities;
  • Performing reputation and sentiment analysis; and
  • Evaluating the institution’s competitive landscape.

Based on additional guidance from the Consumer Financial Protection Bureau (CFPB) surrounding unfair, deceptive or abusive acts and practices (UDAAP), WatchDOG Social Compliance also provides financial institutions with a social media monitoring tool for managing customer complaints, and gives federal regulators the necessary information to complete social compliance audits.

Since 1998, CSI Regulatory Compliance has provided organizations with software solutions and consulting services focused on risk management, watch list screening and fraud prevention. As a leader in regulatory compliance, CSI offers solutions and services that ensure customer success by leveraging the latest technology advancements to consistently deliver superior results.

“As regulatory pressure continues to build with the introduction of new compliance guidelines, a large portion of today’s financial institutions find themselves overwhelmed with managing compliance, which prevents them from exploring such valuable new arenas as social media,” said Paul Koziarz, president and general manager of CSI Regulatory Compliance. “By implementing our WatchDOG Social Compliance solution, banks can successfully capitalize on greater customer insight and communication capabilities available through social media without neglecting other compliance responsibilities.”

About Computer Services, Inc.

Computer Services, Inc. (CSI) delivers core processing, managed services, mobile and Internet solutions, payments processing, print and electronic distribution, and regulatory compliance solutions to financial institutions and corporate customers across the nation. Exceptional service, dynamic solutions and superior results are the foundation of CSI’s reputation and have resulted in the company’s inclusion in such top industry-wide rankings as the FinTech 100, Talkin’ Cloud 100 and MSPmentor Top 501 Global Managed Service Providers List. CSI’s stock is traded on OTCQX under the symbol CSVI. For more information about CSI, visit www.csiweb.com.

About Independent Bankers Association of Texas

Formed in 1974, the Independent Bankers Association of Texas (IBAT) represents Texas community banks. The Austin-based group is the largest state community banking organization in the nation, with membership comprised of more than 2,000 banks and branches in 700 Texas communities. Providing safe and responsible financial services to all Texans, IBAT member bank assets range in size from $10 million to $20 billion with combined assets statewide of nearly $165 billion. IBAT member banks are committed to supporting and investing in their local communities. For more information, visit www.ibat.org

Baker Market Update: May 12, 2014


After newly crowned NBA Most Valuable Player Kevin Durant thanked each of the Oklahoma City Thunder’s season tickets holders by name during his acceptance speech on Tuesday, it made Janet Yellen’s testimony before Congress’s Joint Economic Committee seem like a study in brevity. In briefing the legislators, Ms. Yellen maintained her outlook that the calendar will remain the economy’s best friend as the negative effects of winter’s harshness have ended and the advent of spring will propel the wheels of commerce into the fast lane. Well, at least out of the slow lane. She is concerned however, that higher home prices and mortgage rates have put the brakes on the housing sector’s recovery.

Read more in the Baker Market Update

May Consumer Tips


The May version of IBAT’s Consumer Tips is now available online.  This month’s tips focus on paying for a college education through grants and loans, as well as helpful hints on paying back college debt.

This month’s tips were compiled by Teresa Cage Beasley, Instructor, communication and humanities, Panola College, Carthage, TX. Teresa is a freelance writer and photographer. Provided as a public service by IBAT and its Education Foundation.

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.

Proposed Changes


The Consumer Financial Protection Bureau, last week, issued proposed changes to mortgage rules that would allow lenders a cure period to issue refunds if they discover that they have exceeded the 3% fee cap required for legal protections under Qualified Mortgage standards.  Under the proposal, lenders would have up to 120 days after closing to issue such refunds.

The proposed rule was issued in response to concerns about credit availability for those consumers close to the fee cap.  Many lenders set a lower fee cap in their own lending standards to allow for a buffer for potential mistakes.

“The Bureau understands that some creditors may not originate, and some secondary market participants may not purchase, mortgage loans that are near the QM limits on points and fees because of concern that limits may be inadvertently exceeded,” Bureau officials said. 

"The Bureau believes that a limited cure provision may promote consistent pricing within the qualified mortgage range by decreasing the market’s perceived need for higher pricing (due to compliance or secondary market repurchase risk) at the margins of the points and fees limits,” they added.

And the Award Goes to...


Many thanks go to all of our community bank members who nominated local teachers as candidates for consideration of the IBAT Teaching Excellence in Financial Literacy Awards. The 2014 class of nominees was excellent and twice the size of any other year of nominees. The judges pored over the applications and selected the following three teachers to be recognized as our 2014 Award Recipients. Each is invited to join the advisory board of the IBAT Teach the Teacher Program:

  • From First State Bank and Trust Company, Carthage (Jim Payne and Becky Eubank):
    Lisa Tate, Beckville Sunset Elementary School (3rd grade)
  • From Woodforest National Bank, The Woodlands (Ray Sanders):
    John Stephens Owens, The Woodlands College Park High School (12th grade)
  • From Extraco Banks, N.A., Temple (Beckie Johnston)
    Rebecca Larson, Temple High School (12th grade)

Following the award presentations at various local school and city council assemblies in May, summaries and photos of the award winners and their nominating bankers will be available on the IBAT Education Foundation website by May 30. Look for the past winners in the Foundation news archives.

Reg Burden Bills Moving


We are pleased to report that the House Financial Services Committee will consider (or, in legislative parlance, “markup”) a multitude of regulatory relief bills beginning on Wednesday.  Some 15 separate bills will be considered, along with a resolution to authorize the issuance of subpoenas to the Treasury and Department of Justice relating to recent settlements with large financial institutions.  For additional information, please refer to the Committee Memorandum.

Of particular interest to community banks are:

  • H.R. 2673, which confers QM status to any loan kept in-portfolio;
  • H.R. 3211, which modifies the definition of points and fees to exclude insurance and taxes held in escrow as well as fees paid to affiliated companies; 
  • H.R. 4466, which requires various regulators to assess duplicity or conflict with existing rules prior to issuance of a new rule, and also requires a review of existing regulations within 60 days of a proposed rulemaking;  and
  • H.R. 4521, which exempts creditors under $10 billion from escrow requirements on in-portfolio loans and increases the small mortgage servicer exemption to 20,000. 

Additionally, there are a number of bills addressing a variety of impediments to smaller public and private capital offerings that will likely provide some efficiencies for those seeking additional capital.

As you are aware, IBAT has been strongly pushing H.R. 1750, which contains a number of regulatory burden relief provisions.  With a number of provisions of that bill already passed through the House, the successful passage of the package described above will go a long way toward some meaningful changes to some of the more troublesome post-crisis challenges.  We are tremendously appreciative of the efforts of many to make this happen, but especially wish to thank Chairman Hensarling and his staff for bringing these important provisions to markup.

Constituents/friends of our two Democrat members of the Financial Services Committee are encouraged to contact their offices to encourage a “yes” vote on the important bills specified above.  Al Green (Gregg Orton is his banking staffer) can be reached at 202-225-7508, and Ruben Hinojosa (Holly Bullard) at 202-225-2531. 

In related news, the full House is scheduled to vote on two measures of interest to community bankers this week.  H.R. 2672  would provide a mechanism for banks to appeal the CFPB’s designation of a rural area.  H.R. 3329 would raise the threshold for small bank holding company regulatory relief from $500 million to $1 billion.

Congressional Visit Success


Community banker involvement can and does make a difference.  A hardy delegation of some 160 braved the torrential rain and normal challenges that Washington, D.C. offers to “tell the community banking story."  We very much appreciate all who took time away from their respective “day jobs” to join us for this important annual event.

We were able to meet with 34 of our 36 members of the Texas delegation, heard from a number of lawmakers in our traditional group meetings and joined ICBA and well over 1000 community bankers from across the country for a variety of events and programs, including an address by Fed Chair Janet Yellen. 

Constituents and engaged community bankers who have taken time away from the office and spent money to get to D.C. because they believe in their message and their industry is very compelling to our elected officials.  You are making a difference, and your efforts are appreciated tremendously

Baker Market Update: May 5, 2014


[Last] week’s market news might best be reviewed by Charles Dickens. Not unlike A Tale of Two Cities, this week reflected both the best of times and the worst of times. After confirming that the Bureau of Economic Analysis (BEA) had not made a typo when it reported that Q1 GDP (1st estimate) grew a miserly .1%, that got the worst news out of the way. The best news (relatively speaking) was reported this morning by the Bureau of Labor Statistics when it announced a 288k increase in Non-Farm Payrolls in April that helped bring the Unemployment Rate down to 6.3% from 6.7%. Also not a typo. In addition, we learned that previous reports were not as bad as we thought as revisions to February and March numbers increased the job creation count by 36k. Read more in the Baker Market Update.

Directory of Associate Members


The directory of IBAT Associate Members is now updated and ready to be downloaded from the IBAT website.  

IBAT's Associate Members provide a comprehensive collection of products and services to meet the needs of IBAT member banks.  With nearly 220 Associate Members, this listing will serve as a handy resource throughout the year.

Click here to download the Associate Member Directory.  Remember, too, that the Find a Supplier resource on the IBAT website is always helpful if you're seeking to search by a particular product.  

Survey


Whether or not you are joining IBAT and ICBA in Washington, D.C. this week, you can assist our efforts by providing feedback about the way that examiners have treated regulatory guidance in your recent examinations.

Bankers have long felt that examiners treat guidance and best practices as if they were enforceable regulations. In a speech last week, a representative of one of the federal bank regulators responded to banker complaints about guidance and best practices issued by her agency. The representative said that compliance with guidance is not optional, but it is not enforceable. She additionally said that, “best practices are procedures and approaches that certain banking institutions use... but performing them is not a regulatory expectation."

IBAT is interested in our bankers' thoughts about guidance and best practices issued by their federal regulators. If we can get sufficient responses to the below survey, we'd like to use the results in future meetings with the OCC, Federal Reserve and FDIC.  

Please click here to participate in the survey and have your voice heard in Washington D.C.

Financial Literacy Award


Discover Financial Services received an Excellence in Financial Literacy Education (EIFLE) Award from the Institute for Financial Literacy during the Annual Conference on Financial Education.  Discover won in the "Organization of the Year, Corporate Leadership" category for its financial education program, Pathway to Financial Success. The EIFLE Awards acknowledge the innovation, dedication and commitment of individuals and organizations that advance financial literacy education.

In addition to their own financial literacy efforts, Discover has been a great partner with the IBAT Education Foundation through its subsidiary, PULSE. Since the outset of the Foundation's Teach the Teacher Program™ in 2012, PULSE has led the way by providing financial, as well as teaching, support for the program.  

"Discover and PULSE lead by example in their commitment to financial literacy initiatives," said Mary Lange, President of the IBAT Education Foundation. "We could not ask for a better corporate partner as we pursue our mission of 'building financially literate communities' across Texas."

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