Shands Reappointed

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.

Photo by: The Lufkin News

Posted: Friday, February 3, 2012
By STEVE KNIGHT/The Lufkin News

Gov. Rick Perry on Thursday reappointed First Bank and Trust President and CEO Jay Shands of Lufkin to the Finance Commission of Texas.

Shands, whose new term will expire Feb. 1, 2018, is also board chairman of First Bank of Conroe and Balcones Recycling. He is a member of the American Bankers Association, Independent Community Bankers of America, and Independent Bankers Association of Texas... read more.

FHFA Proposed Rule

If adopted, a proposed rule from the Federal Housing Finance Agency (FHFA) will delegate from the FHFA to the FHLBanks the responsibility for determining their member banks’ compliance with the FHFA’s community support requirements. IBAT filed a comment letter opposing this delegation. IBAT’s comment letter points out that FHFA is in a better position to perform this task, FHLBanks are not regulators, and Congress previously took this authority away from FHLBanks.  The proposed rule would also do away with the probationary period for banks with a single CRA rating of “Needs to Improve.”  IBAT opposed that change as well. Click here to read the comment letter.

IBAT Foundation Raffle Begins!

For the third year, IBAT Foundation offers the Guiltless Giveaway to its members as a fundraiser for its financial literacy efforts.  Raffle ticket sales began February 6 and are available up to either  April 12 or  we hit our limit of 2000 tickets. Don’t delay. Last year we sold out in 30 days. Click here to register/buy tickets.

Thanks to the generosity of IBAT associate member Dennis Schwartz, we have nine prizes: Grand Prize of $5,000 Discover Gift Card, 3 Apple iPad2, 2 Nikon digital cameras, 3 selections of Tiffany jewelry.

Ticket Prices range from 1/$15; 2/$25; 5/$50; 12/$100. Click here to register/buy tickets. Payment choices include credit card or invoice. You will receive an automatic confirmation plus numbered ticket stubs that come in the mail.

The winning tickets will be drawn by an independent third party auditor on Friday April 13.

IBAT Banker, Celebrated Couple

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.

Center to celebrate community couples
By Shannon Guillot
Special to The Daily News
Published February 1, 2012

Family Service Center is already in the Mardi Gras spirit. This year at our annual Connections of the Heart “Celebrate Carnival” gala Friday, the Davidson Ballroom of the Tremont House will be transformed into a festive carnival scene.

One of the great highlights during the evening’s festivities will be honoring three community couples who live the mission of Family Service Center by “strengthening families and supporting communities.” Our honorees are Jimmy and Jane Hayley, Vic and Janice Pierson and Drs. Ben and Sharon Raimer.... read more.

Sign the CU Petition Today

More than 12,000 community bankers have signed ICBA’s petition to oppose the expansion of small business lending authority of credit unions.  Last week, credit union advocates descended on Capitol Hill, asking Congress to more than double their lending authority via the Small Business Lending and Enhancement Act of 2011 (H.R. 1418/S.509).

“The current business lending cap of 12.25% of assets was set in law by Congress to maintain a distinction between tax-exempt credit unions and taxpaying community banks. Any legislation to increase this cap would only harm and displace taxpaying community banks and the customers and communities they serve. Taxpaying community banks more than adequately satisfy all past, present, and future small business loan demand from qualified borrowers in their communities across the country,” the petition reads. 

Although reaction to the petition has been significant thus far, IBAT and ICBA are continuing to urge all community bankers to take a few minutes to add their name.  The credit union lobby is applying the full-court press on members of Congress and community bankers need to respond in kind.

IBAT Banker to Retire

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.

Photo by: Joy Lewis, Reporter-News

By Hannah Boen
Posted January 29, 2012

While many have claimed to be self-made men, it is rare to find someone who truly climbed the ranks alone. However, few would argue that Joe Ford beat the odds to become one of the most successful men in the Big Country.

Ford grew up near Hamlin in a small community called Wise Chapel. He was one of 11 children of a cotton-farming family — and tradition would say he should have become a farmer... read more.

Call Today: Co-sponsors Needed for Communities First Act

IBAT has issued a call to action for community bankers to urge their member of the U.S. House of Representatives to become co-sponsors of the IBAT inspired Communities First Act (HR 1697). The call comes after news that the bill will be marked up in the House Financial Services Committee in early March.
  • The CFA contains dozens of significant regulatory relief provisions for community banks in the wake of Dodd/Frank, including:
  • Allowing community banks to amortize losses on commercial real estate loans and other real estate owned over 10 years for regulatory capital purposes;
  • Requiring the Securities and Exchange Commission to conduct a cost-benefit analysis before approving any proposed accounting change;
  • Increasing the threshold number of bank shareholders that trigger SEC registration from 500 to 2,000; and
  • Allowing the Financial Stability Oversight Council to veto Consumer Financial Protection Bureau rules that would adversely impact community banks.

Currently, only four Texas Congressman (Poe, Canseco, Marchant and Sessions) are among the more than 71 co-sponsors of the bill. Please call your House member now and request that he or she co-sponsor HR 1697. A full list of contact information for the Texas Congressional delegation is available here.

BOCB Award Winner Citizens National Bank

Citizens National Bank received a Bronze medal in the Best of Community Banking Awards sponsored annually by the Independent Bankers Association of Texas (IBAT).  The Henderson bank was recognized in the Community Service category for its 80th anniversary celebration, highlighted by the painting of a mural capturing aspects of news, business, history and landmarks of Rusk County during the 80 year period.  Art teacher Janet Wallace won a contest to design the mural and muralist Denna Miller of Longview replicated the design on a downtown building.

Community Bank Bill Gaining Steam

We are pleased to report that the Communities First Act (HR 1697), a broad bill aimed at specific regulatory burden and tax relief for community banks, continues to make progress in Washington.

This bill, an ICBA initiative strongly encouraged and supported by IBAT, was heard in Subcommittee last November, with additional action promised in the coming months.  With the cosponsor tally now at 71, it continues to gain traction and momentum.  Texas cosponsors include Canseco, Marchant, Poe and Sessions.  Additionally, the Senate version of this initiative, S. 1600, counts among its cosponsors Senator Hutchison.  We very much appreciate the support of these lawmakers on this “community bank centric” – and much needed – legislation.  Detailed information on this bill is available here.

This issue is one of many that will be front and center on our upcoming trip to Washington, DC.  For additional information and to register, please visit our website.

IBAT Member Vista Bank's 100 Year Anniversary

This year marks the 100th year Vista Bank has been serving West Texas. In appreciation of their valued clients they will hold a ribbon cutting January 25th at 5:30 PM at Vista Bank, located at 4621 50th Street.

News Facts:

  • The Lubbock Chamber of Commerce will provide a ribbon cutting for Vista Bank's 100th Anniversary
  • Ribbon Cutting will begin at 5:30 PM on Wednesday, January 25th at Vista Bank, 4621 50th Street
  • Wine and hors d’oeuvres will be served
  • Attendees can register to win a $100.00 VISA giftcard
    (Drawing open to everyone. Limit one registration per person. Must be present to win.)

About Vista Bank:
Vista Bank was founded in 1912 in Ralls, Texas. Today, the bank operates 10 full-service banking oces in the communities of Abernathy, Crosbyton, Hale Center, Idalou, Lorenzo, Lubbock, Petersburg, Plainview, and Ralls. Read more about Vista Bank's history.


Political Season in High Gear

With tremendous uncertainty regarding the ultimate district lines, “who’s running where” and even the dates for the primary elections, we are well into our biannual process of determining which candidates to support.  While we are waiting for some finality in the ever-dynamic redistricting saga for a number of open seats in the Texas House of Representatives and Congress, there are many districts and candidate slates that appear to be set regardless of how the process settles out.

And speaking of settling out, the U.S. Supreme Court issued an opinion on Friday in the State’s redistricting case. Because the Court remanded the case for further proceedings consistent with its opinion, it is unclear how that decision will affect the elections.  Stay tuned. There are still a few balls in the air.

Some of you have already received communications from us seeking input on primary contests in your area.  We appreciate your input and involvement, and want to make sure we are following the will of our members in each district.  With over 30 open seats in various bodies, the chances are good you will have an opportunity to provide input in this process.  Additionally, if you have any observations or opinions you wish to share, please call or e-mail us at any time.

Finally, sincere thanks to all of you who have faithfully supported the IBAT PACs over the years.  You continue to make a difference for our industry!

Protect Your Collateral Values

In early December, we sent an email discussing steps to take to avoid impairment of your real estate collateral due to tax lien loans.  As we approach the due date for 2011 property taxes, we encourage you to review this document and your procedures to ensure that your collateral is not impaired due to an unanticipated priority lien.  We continue to receive calls and emails from banks that are dealing with the aftermath of a tax lien transfer, and hope to assist you in avoiding this unfortunate situation.

Texas Banks Find Success with SBLF

A report sent by the Treasury Department to Congress last week showed signs that the Small Business Lending Fund (SBLF) has been successful in stimulating lending.  Nationwide, banks that participated in the SBLF increased small business lending by $3.5 billion over average lending reported in the four quarters before the Small Business Jobs Act, which created the SBLF, was enacted. 

Nineteen Texas banks participated in the SBLF, seeing an average increase in small business lending of 29.6%.

The full list of participants in the SBLF is available via the Treasury Department’s website.

CATO Webinar

Late last week, the Texas Department of Banking (DOB) issued Supervisory Memorandum 1029:  Standards for the Risk Management of Corporate Account Takeovers.

The Memorandum, along with extensive “Best Practices”, provides banks with a roadmap and tools to counter the increasing occurrence of this type of cybercrime.   The materials were developed by a Task Force comprised of representatives from the DOB, U.S. Secret Service, SWACHA and the banking industry.  Additional information regarding the Task Force, process and related resources are available online.

Additionally, the FFIEC Supplemental Guidance on Multifactor Authentication was effective January 1, 2012.  The goal of the Supplemental Guidance is to prevent identity theft and financial fraud from the misuse of online banking applications.

Regardless of your charter type, we encourage you to review the materials on the DOB’s website, and to join in a webinar on January 25 at 3:00 PM for a thorough discussion of this important issue.  A recording and collateral materials will be available online shortly after the live webinar.  

2011 Summary of Deposits

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.

Bankers Digest Featured Articles January 16, 2012 Issue
Source: FDIC Quarterly, Banking Profile Third Quarter 2011, Division of Insurance and Research

Each year as of June 30, the Federal Deposit Insurance Corporation (FDIC) collects deposit data for branches and offices of all FDIC-insured institutions. The resulting Summary of Deposits (SOD) is a valuable resource for analyzing deposit gathering and branching trends, as well as domestic deposit market share. The SOD data are available online... read more.

Read the Latest Missing Linc Blog Post

In an opinion piece and blog post circulated last week, IBAT President and CEO Chris Williston weighed in on President Obama’s recent appointment of a director to the Consumer Financial Protection Bureau.

“The absence of a director was creating a window during which unregulated, non-traditional financial entities such as payday lenders, private student lenders and other financial intermediaries could continue to escape direct oversight and rulemaking of the CFPB. Regulated financial institutions welcome the closing of that window,” Williston wrote. 

However, the appointment of a director, Williston notes, does not come without concern for many community bankers who, “worry that the CFPB will propose rules that will hurt our customers and stifle our ability to provide competitive and innovate products for small businesses.”
The ultimate test of the CFPB, he concluded, will be “how the agency intends to implement ‘tiered regulation’ and resist the temptation to promulgate rules to fit all institutions.”

BOCB Award Winner First Victoria National Bank

First Victoria National Bank received a Gold Medal, two Bronze Medals and a Certificate of Merit in the Best of Community Banking Awards sponsored annually by the Independent Bankers Association of Texas (IBAT). The Victoria bank was recognized in the Marketing category for a variety of programs by a panel of independent judges. The Gold Medal was awarded for a six-month e-Statement campaign tagged “Turn off the paper and we’ll turn on the dough” with customers receiving $10 for each account they switched to an e-statement.  The program easily surpassed the goal of 775 new enrollments with 2,378 enrollments, equating to a $34,243 annualized reduction in statement printing expenses for the bank. The Bronze medals were awarded for a special “Big Day” celebration, inviting the community to an open house while offering new account specials, and for a people campaign, spotlighting personnel as the bank’s greatest asset.  A Certificate of Merit was awarded for a campaign involving a new banking center in Spring.  FVNB

Obama Appoints CFPB Director

Last week, President Barack Obama took advantage of the current Congressional recess to appoint Richard Cordray as the Director of the Consumer Financial Protection Bureau (CFPB).  Interestingly, the Senate remains in “pro-forma” session, which basically means they haven’t officially recessed for more than three days, and are doing so specifically to prevent “recess appointments”.  Additionally, the language in Dodd Frank specifically refers to  a “Senate confirmed” agency director prior to the CFPB having the authority to regulate nonbank financial services providers such as payday lenders, small loan companies and others.  The only reason for a recess appointment is to avoid the confirmation process.  This appointment will no doubt lead to prompt litigation and challenges, puts future rules and the enforcement authority of the CFPB in doubt, and raises questions regarding the legitimacy of future FDIC Board actions (CFPB Director has a seat on that Board) .

Senate Republicans had blocked the confirmation of any Director, believing that the CFPB should have oversight by a board, rather than an individual, and be subject to the appropriations process (to provide some level of Congressional oversight and leverage).  IBAT has been supportive of legislative initiatives to provide these reasonable checks and balances on the new agency.   

The President’s bold move will likely create additional political friction, and could result in further delay on the pending confirmations of several key bank regulatory appointments including the new Comptroller of the Currency (Tom Curry) and FDIC Chairman (Martin Gruenberg).

The CFPB is moving forward with plans to regulate the nonbank financial services providers, which will hopefully provide some consistent application of “the rules” under which we as community banks must operate.  This is a very fluid situation, and we shall keep you apprised going forward.

The Latest Beige Book

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.

Dallas Beige Book
January 11, 2012
Federal Reserve Bank of Dallas

The Federal Reserve System's latest Beige Book survey has been released. The Dallas Beige Book, along with a link to the national summary and reports from other Federal Reserve Districts, is available online.

This summary of current economic conditions is based on information collected on or before February 22, 2010. This report summarizes comments received from businesses and other contacts outside the Federal Reserve and does not reflect the views of Federal Reserve officials.

CRA Regulations

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.

Bankers Digest Featured Article January 9, 2012 Issue
Source: Financial Institutions Letter, FIL-76-2011

The FDIC, the Federal Reserve Board, and the Office of the Comptroller of the Currency have published a final rule amending the Community Reinvestment Act (CRA) to adjust the asset-size threshold used to define “small bank” and “intermediate small bank” under the Act. Financial Institutions Letter (FIL-76-2011) is dated December 19, 2011. Statement of Applicability to institutions with total assets under $1 billion: FIL-76-2011 is applicable to all FDIC-supervised financial institutions... read more.

Gold Eagle Award Winner Bank of the West

Bank of the WestCongratulations to Bank of the West in Grapevine which took home the Gold Eagle Award for their Best of Community Banking entry in Financial Literacy.  Making a deep commitment to financial literacy, Bank of the West has developed a financial literacy policy with eight different programs, each addressing different markets. Bank employees involved take a training course geared to the program they are responsible for and each yearly quarter, the bank changes focus, i.e., K-8th grade, high school, adult groups and one open choice quarter. The past year’s projects are extensive, well-defined programs across all age groups.

IBAT Member PointBank Enlists Social Media

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.

By Jackie Stewart
DEC 30, 2011

PointBank is looking to replace lost checking-account revenue by boosting its social media presence.

The bank, based in Pilot Point, Texas, will soon test BuzzBanking, a rewards program that lets customers earn points both for debit-card use and for publicizing their points-earning activities on Facebook and Twitter. The points can then be used to buy gift cards... read more.

Stay tuned for an exciting announcement about the new IBAT/American Banker subscription program at the Regional Meetings!

Operations Alert

OPERATIONS ALERT: UDAP and regulatory problems with overdraft fees on debit cards in ad hoc programs.
Before a fee can be charged to a consumer who overdraws his or her account through a debit or ATM card, the bank must comply with Regulation E by providing a notice to the customer and obtaining an affirmative written consent from the customer as to the imposition of the fee.  This requirement applies to all overdraft programs including both automated and ad hoc ones.  A debit card transaction in an ad hoc environment could create an overdraft due to a “forced pay” resulting from the network rules.  For example, a person pumping gas could swipe their card, be preauthorized for $1, pump $60 worth of gas, and the transaction must pay whether or not the customer actually has the full $60 in their account.  The bank can’t charge a fee for the transaction unless the customer has authorized it in accordance with Reg E.
However, the Reg E form potentially misleads the customers into thinking that they are getting overdraft protection when in fact they will have overdrafts covered only when a card use is required to be covered by the depository bank due to the preauthorization system (forced pay).  Thus, the only thing that the customer is opting in to is the right to be charged a fee.  From a UDAP analysis, this situation is unfair and deceptive.
Currently, there is no sample notice that would be consistent with the model form but that would not be misleading.  Thus, banks with ad hoc overdraft coverage can either stop charging an NSF fee for debit card usage or convert to automated programs.  Regulators have required banks that have ad hoc programs to refund fees assessed on debit card overdrafts.