A lawsuit challenging the constitutionality of key provisions of the Dodd-Frank law, including the authority given to the Consumer Financial Protection Bureau (CFPB), was dismissed last week by a U.S. District Judge.
In her opinion, Judge Ellen Segal agreed with defendants that plaintiffs lacked standing to pursue claims against the agency because "plaintiffs have not faced any adverse rulings nor has agency action been directed at them." She further asserted that any injuries claimed by the bank were hypothetical and "simply too speculative" to be redressed by the court.
The lawsuit was filed by the State National Bank of Big Spring and supported by 11 states, including Texas.
There is a lot not to like about Dodd-Frank, and we applaud Jim Purcell and the Attorney General’s office for their front line involvement in this lawsuit
"Upon consideration of the pleadings, oral arguments, and the entire record, the Court concludes that the Board has clearly disregarded Congress's statutory intent by inappropriately inflating all debit card transaction fees by billions of dollars and failing to provide merchants with multiple unaffiliated networks for each debit card transaction."
With that, United States District Judge Richard J. Leon began the Court's 58 page opinion in the case of NACS v. Board of Governors of the Federal Reserve System excoriating the Board for its interchange transaction fee and network non-exclusivity regulations.
The Court ruled that the interchange fee base set by the Board ($0.21) is too high and that multiple unaffiliated networks for routing transactions have not been provided. The regulation was remanded to the Board with instructions to vacate the rules. The Court stayed the vacation of the rules to provide the Board with an opportunity to replace the invalid portions.
While the Board's rules only apply to issuers with $10 billion or more in assets, the downward pressure on interchange fees will ultimately harm all issuers and their customers. IBAT strongly encourages the Fed to appeal the decision.
We additionally urge Congress to revisit the very tightly worded and highly inappropriate "price fixing" Durbin Amendment to Dodd-Frank.
The bill (H.B. 3068) championed by IBAT, prohibiting debit card surcharges, has suddenly become more significant.
Edward Snowden is not the only one for whom [last week] was a big week. For those not seeking political asylum, [last] week was filled with market-moving statistics and events. Just [Friday] morning, the always much anticipated Employment Report from the Bureau of Labor Statistics (BLS) was unleashed on a marketplace expecting to see a 185k increase in Non-Farm Payrolls. What they got was a less-than-robust gain of 162k new jobs along with a downward revision of last month's figure. The 195k jump in new jobs that was reported in July was actually only 188k. This had to be big news for at least the seven thousand people who thought they had a job. Despite the lower than expected level of job creation, the Unemployment Rate fell from... Read more in the Baker Market Update
In this day and age of cyber security incidents and breaches, how fast you respond to a breach or how prepared you are for such an incident in advance, are your sole determining factors in "how bad it is" in that situation. Dell SecureWorks offers incredible insight from our proactive manager, Jeff Schilling into what community banks need to avail themselves of, when things aren't in a crisis mode -
- Preparing for an incident;
- What to look for;
- What is a tabletop exercise;
- How prepared is prepared;
- What the regulators say about incident response - is your IR plan written more like a BCP plan or even a DR plan? Does it include preparedness for DDOS? DOS? Full egress and ingress situations of TODAY?
Register today for IBAT's IT Security Summit and be prepared!
The IBAT PAC is exclusively dedicated to promoting the community banking industry. PAC funds enable IBAT to support candidates who understand the important role community banks play across Texas. The IBAT PAC is an essential tool in the association’s government relations efforts and the PAC Auction is its major fundraising event.
You can participate by donating an item to be auctioned off, or by purchasing an item at this year’s convention.
Please contact Mae Beth Palone with any questions.
For the past 22 years, the IBAT Community Bank Compensation Survey has been the "gold standard" for salary and benefit data. It is the exclusive go-to resource for community bank CEOs grappling with compensation issues for bank personnel. We always look for ways to deliver additional value to IBAT member banks and after hearing feedback from you, we've made some significant improvements to the survey for your benefit. Here's what has changed:
- IBAT has engaged Industry Insights to conduct the annual survey;
- One data collection effort per year, August 1 - August 30;
- Submit data via online portal or print out to mail or fax;
- Condensed the survey to the top 25 most essential job positions to reduce your time commitment;
- Consolidated data filtration parameters to yield larger data pools for more valuable customized comparison reporting; and
It is getting difficult to keep up with all the mortgage rule proposals and final rules coming out of the Consumer Financial Protection Bureau (CFPB). Last week, IBAT submitted its comments to one of the latest proposals that would amend Reg. B, Reg. X, and Reg. Z. IBAT chose to focus on two aspects of the proposal.
First, we told the CFPB that we enthusiastically supported the proposed common sense additions on the exemptions for loan originators. Second, we commented that, while we appreciate the exemptions proposed for certain small creditors while the CFPB reevaluates its definition of "rural," we are concerned that this exemption is too little to save consumer credit in many rural areas over the next two years.
We offered two alternatives to avoid this. First, we suggested that CFPB use its authority to exempt all in-portfolio loans while it reevaluates the definition of rural. Alternatively, we suggested that, while the CFPB is reevaluating the definition of rural, it define rural as all areas outside of urbanized areas, as defined by the Census Bureau. The first alternative would do the most to preserve consumer credit in rural areas; however, without one of these two alternatives, consumer lending in certain rural areas will dry up and not return despite the CFPB's revamped definition.
Information received since the Federal Open Market Committee met in June suggests that economic activity expanded at a modest pace during the first half of the year. Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has been strengthening, but mortgage rates have risen somewhat and fiscal policy is restraining economic growth. Partly reflecting transitory influences, inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable... Read more in the special Baker Market Update.
In a Letter to the Editor of the Wall Street Journal published last week, IBAT President and CEO Chris Williston praised recent legislative efforts to rein in the risky activities of the largest banks.
"The nearly 7,000 community banks across the country spend an inordinate amount of time and money, not to mention frustration, attempting to comply with an avalanche of new regulations aimed at solving problems they neither participated in nor profited from," Williston said. "We are hopeful that bipartisan efforts in Congress will provide much-needed regulatory relief for small banks, while ensuring new rules are directed at those responsible for the problems the regulations are intended to curtail."
In particular, Williston acknowledged progress that has been made between Rep. Jeb Hensarling (R., Texas), House Financial Services Committee chairman, and ranking member Maxine Waters (D., Calif.), in "their acknowledgement that a one-size-fits-all regulatory system has caused irreparable harm to independent banks."
IBAT continues to work with lawmakers on both sides of the aisle to draw attention to the stark differences in the business models of community banks and the biggest financial institutions.
With [Friday] morning's release of the University of Michigan's Index of Consumer Sentiment showing a rise to 85.1 from 83.9, one wonders if survey takers might have taken a detour around Detroit. Apart from the financial maladies that plague that beleaguered municipality, a rosier outlook was also manifested by the 8.3% rise in New Home Sales, which more than made up for the 1.2% decline in Existing Home Sales. As far as prices are concerned, the FHFA House Price Index rose by .7% in May. As uplifting as the housing sector's resurgence has been, concerns continue to swirl around the possible dampening effect of higher mortgage rates... Read more in the Baker Market Update.
July 19th marked a special day for the IBAT family, with two IBAT-member bank celebrations in La Grange and Schwertner.
National Bank & Trust, La Grange celebrated their 125th anniversary with prizes and refreshments in an outdoor event. IBAT’s Shannon Phillips was on-hand to help the bank celebrate this important milestone.
Schwertner State Bank held their 100-year anniversary celebration on the same day. Among the guests were Governor Rick Perry, former FDIC Chair Don Powell, Senator Charles Schwertner, Commissioner Cooper and IBAT’s very own Steve Scurlock. Everyone enjoyed the festivities and BBQ.
Both banks were presented with resolutions on behalf of the IBAT Board of Directors. IBAT congratulates both banks for their century-long service in Texas.
National Bank & Trust, La Grange celebrates 125 years
Participants in the Bank Operations Institute (BOI) achieve a comprehensive understanding of community bank operations and how it contributes to the overall success and profitability of the bank. The program is designed by our advisory board, made up of regulators and bankers, and is based on the most current regulations and exam practices. Because the advisory board provides relevant issues, the curriculum is dynamic. Presentation styles include lecture, case studies, simulations and interactive class exercises.
Staff contact: Julie Courtney, email@example.com, 512-275-2219
Last week, the United States Senate confirmed the nomination of CFPB Director Richard Cordray as part of a larger compromise to maintain Senate filibuster rules in exchange for the approval of a number of administration nominees.
Senate Republicans had long delayed the nomination of Cordray, who was first nominated in 2011, in an effort to work towards changing the bureau’s governance structure to provide more Congressional oversight. With the smoke now cleared around the confirmation of Director Cordray, the bureau can promulgate rules for non-bank portions of the financial services industry without fear of nullification by future legal action surrounding the circumstances of his initial appointment.
It's not a surprise to anyone anymore that cyber-threats are part of our daily lives. Being aware of it is not enough, having a firewall is not enough and what we did 10 years ago is not enough - as the threat landscape is ever-evolving. IBAT's IT Security Summit, taking place in San Antonio on August 8, will teach your security staff the newest and best practices in securing your bank including:
- Ever Evolving Threat Landscape;
- APTs: Fighting Targeted Threats;
- Presenting to the Board and Executives;
- Incident Response; and
- Banking Compliance.
For detailed information about the summit, and a full agenda, click here.