New SEC Regulations

A provision in the Dodd-Frank Act requiring municipal advisors to register with the Securities Exchange Commission (SEC) and comply with regulations to be issued by the Municipal Securities Rulemaking Board raised questions as to whether community bankers providing advice to municipalities on banking products and services would have to register and comply. As part of IBAT's fight to relieve community banks of registration obligations, it filed a comment letter on the SEC's proposed rules urging the SEC to exempt community banks from registration. On Friday, September 18, 2013, the SEC finalized rules tailored to exempt banks providing advice on certain banking products and services to municipalities from registration. 

According to a fact sheet issued by the SEC, the exemption does not apply to banks that:

  • Engage in other municipal advisory activities such as providing advice on municipal derivatives or the issuance of municipal securities.
  • Provide advice on municipal derivatives, in part because municipal derivatives were a source of significant losses by municipalities in the financial crisis.

The final rule will be effective 60 days after publication in the Federal Register.

HUD Final Rule

HUD’s regulations currently require all supervised lenders and mortgagees to submit annual audited financial statements as a condition of FHA lender approval and recertification. Last week, HUD adopted a final rule that exempts small supervised lenders and mortgagees (lenders with less than $500 million in consolidated assets) from submitting a copy of an audited financial statement. Small supervised lenders and mortgagees are instead required, within 90 days of their fiscal year end, to furnish to HUD the Call Report that the small supervised lender or mortgagee is required to submit to their respective federal banking agency. 

Additionally, HUD clarified that small supervised lenders and mortgagees, as a result of this rule, are no longer required to submit internal control and compliance reports. Small supervised lenders and mortgagees would only be required to submit audited financial statements if HUD determines that the supervised lenders or mortgagees pose heightened risk to the FHA insurance fund. The effective date of the rule is October 17, 2013.

Cyber Security

IBAT's Chris Williston and Steve Scurlock spent a day last week at the Las Colinas district headquarters of the Secret Service addressing cyber security issues.  The meeting, attended by invited bankers, Secret Service staff, SWACHA and TBA, was initiated by Commissioner Cooper to begin the process of more engagement of senior management, especially at the CEO level, in this growing area of risk.

"We applaud Commissioner Cooper and Phillip Hinkle, Department of Banking Director of IT Security Examinations, for their passion and leadership on this increasingly significant area of risk to community banks," said Chris Williston.  "You can expect to hear more on this, along with shared and individual efforts of the trade groups to get the word out to the senior management of community banks that this is something to which they need to pay serious attention."

Interestingly, an American Banker article recapped comments made last week by Comptroller Curry on his concerns and emphasis on this very issue.

FASB Proposal

The Financial Accounting Standards Board (FASB) has proposed replacing the current multiple variations of the "incurred loss model" with a single "expected loss model." While federal banking regulators support FASB's proposed change, Comptroller of the Currency Thomas Curry recently expressed concerns about the impact of the change on community banks - and in our opinion rightfully so! In a May comment letter (quoted below), the Independent Community Bankers of America (ICBA) expressed grave concerns about the proposed change.

"This proposal is far reaching through its overemphasis on the front-loading of expected credit losses and burdensome and expensive application. Without extensive modifications to the calculation and timing of expected credit losses, community banks, their customers, and their local economies will suffer."

Under the current "incurred loss model," banks generally consider only past events and current conditions in making a determination that a loss has actually incurred or when its occurrence is considered to be "probable" of having incurred. The key difference between the "incurred loss model" and the proposed "expected loss model" is a shift away from that recognition of credit losses when those losses are deemed to be incurred, to a new methodology where there would be no requirement of probability of loss, and the allowance would reflect all expected losses based on all relevant information, including reasonable and supportable forecasts of the future. At each reporting date the balance sheet would reflect the current estimate of expected credit losses, and the income statement would reflect in net income any changes in the allowance (positive or negative) during the period.

IBAT will work hard to defeat this proposed change.

Week in Review: Sept. 20, 2013

Financial markets were treated [last] week to what may have been the best head-fake anyone has ever seen, but it wasn’t seen on ESPN. Federal Reserve quarterback Ben Bernanke deftly performed the move on Wednesday afternoon following the regularly scheduled huddle by the FOMC. At the post-game press conference, Mr. Bernanke announced that there would be no tapering in the volume of the central bank’s $85B monthly bond purchases. After the surprising play call, market participants came dangerously close to being flagged for “excessive celebration” as both credit and equity markets experienced heady rallies, secure in the knowledge that the Quantitative Easing Bowl was headed into overtime. Almost lost in all the hub-bub were Bernanke’s comments about future policy being linked to an unemployment rate “substantially below” the 6.5% level... Read more in the Baker Market Update.

2013 BOCB Winners

Congratulations to the 2013 award honorees for IBAT's Best of Community Banking Awards program.  Nine banks received the Gold Eagle Award, with Best of Show honors going to Alliance Bank in Sulphur Springs for their innovative marketing plan.  All of the Gold Eagle Awards will be presented during the IBAT Convention's Best of Community Banking Awards luncheon on Monday, September 23, at the Westin La Cantera Resort in San Antonio and all of the entries will be on display at the Convention. 

For a list of all awards, click here.  Special thanks to this year's sponsors.

Join Team Kay! 1

At IBAT’s 39th Annual Convention, Senator Kay Bailey Hutchison accepted the role of honorary chair of the IBAT Education Foundation. Hutchison, who retired from the U.S. Senate this past January and now serves as senior counsel at Bracewell & Giuliani, has been a supporter and friend of IBAT since her time in the Texas Legislature. In this new role, she will help promote the Education Foundation, which is the philanthropic arm of IBAT that funds initiatives to help community bankers actively create a more secure financial future for all Texans.

“I hope my service as honorary chair of the IBAT Education Foundation will be a catalyst to help adequately fund the unfunded mandate given by the Texas Legislature to provide a solid foundation of financial education for every child in Texas,” Hutchison said.

“We couldn’t be more pleased or humbled to welcome former U.S. Senator Kay Bailey Hutchison to the IBAT Education Foundation,” Chris Williston, IBAT president and chief executive officer, said. “Her commitment to bettering Texas, paired with her exceptional leadership and her innate knowledge about the importance of financial literacy, make her the ideal person to help IBAT take the Education Foundation to the next level.”

In addition to developing and hosting the IBAT Teach the Teacher Program which has already impacted over 40,000 students in Texas, the IBAT Education Foundation recognizes Texas teachers who excel in teaching financial literacy concepts, and encourages banker support of the Senior Housing Crime Prevention Foundation.

Join Senator Hutchison in supporting the IBAT Education Foundation.

New CFPB Bulletin

The CFPB published CFPB Bulletin 2013-10 reminding employers that they cannot require their employees to receive wages on payroll cards. The bulletin also explains some of the federal consumer protections that apply to payroll cards, such as fee disclosure, access to account history, limited liability for unauthorized use, and error resolution rights. Under Reg. E, an employer can require employees to receive their wages electronically, but the employer can't dictate the financial institution used by the employee. An employer may offer a payroll card at a financial institution of the employer's choosing as long as the employer gives its employees other options for receiving their wages.

Exhibit Hall Silent Auction

Final preparations are underway for IBAT's 39th Annual Convention, September 21-24 at the Westin La Cantera Resort in San Antonio.  In addition to the excellent keynote speakers, learning labs and entertainment, this year’s event will also feature a first-time opportunity for bankers to participate in a silent auction during exhibit hall hours.

Support the IBAT PAC while competing with other bankers to buy:

• A Dell XPS 18 desktop computer, donated by Dell (booth #4);
• A spa package at the Westin La Cantera Hill Country Resort Castle Rock Spa, donated by Deluxe (booth #2);
• An iPad mini, donated by Bank on Hold (booth #40);
• Dallas Cowboys Tickets, donated by Accusource Solutions (booths #22); and more!

Click here to see the full lineup of exhibitors participating in the auction.

Special Baker Market Update 9.18.13

Information received since the Federal Open Market Committee met in July suggests that economic activity has been expanding at a moderate pace. Some indicators of labor market conditions have shown further improvement in recent months, 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 further and fiscal policy is restraining economic growth. Apart from fluctuations due to changes in energy prices, inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable... Read full announcement.

39th Annual Convention

Hundreds of IBAT members are registered to attend next week's 39th Annual Convention in San Antonio, a celebration of True Texas Community Banks - Texas's Superheroes.

The event, which "kicks off" on Saturday with a Chairman's tailgate party, also features a tremendous lineup from nationally acclaimed speakers and industry insiders including:

  • Richard Fisher - President of the Federal Reserve Bank of Dallas;
  • Joe Calloway - Author of Be the Best at What Matters Most; and
  • Jason Dorsey - "The Gen Y Guy" and Chief Strategy Officer at The Center for Generational Kinetics.

Additionally, the 39th Annual Convention includes learning labs, banker to banker roundtables, product demonstrations and a great lineup of entertainment.

Can't make it to San Antonio? Follow along with all of the action on Twitter by searching for #ibat2013.

Week in Review: Sept. 13, 2013

There's been a lot of talk in the news lately about lines being crossed. After the yield on the Treasury's Ten Year Note tip-toed up to the 3% line late last week, many observers thought that this would be the week when that line would be crossed and negative consequences would be felt. Well, that didn't happen. Not this week, anyway. As a matter of fact, one might speculate that it was the prospect of those negative consequences that kept the sell-off in check and prevented the dreaded crossing of that red line yield. Others might think that it was because this was a week filled with lackluster economic news on the heels of last Friday's lackluster jobs report. More luster is definitely in order... Read more in the Baker Market Update.

Flags Ordered to Half-Staff

The President has issued an order lowering the flags to half-staff immediately.  All state agencies should display the US and Texas flags at half-staff through sunset on Friday, September 20, 2013.  Other agencies, businesses and individuals are encouraged to do the same.  Flags should return to full-staff the next day.  A copy of the President's proclamation appears below.


Office of the Press Secretary

For Immediate Release September 16, 2013



- - - - - - -



As a mark of respect for the victims of the senseless acts of violence perpetrated on September 16, 2013, at the Washington Navy Yard, by the authority vested in me as President of the United States by the Constitution and the laws of the United States of America, I hereby order that the flag of the United States shall be flown at half-staff at the White House and upon all public buildings and grounds, at all military posts and naval stations, and on all naval vessels of the Federal Government in the District of Columbia and throughout the United States and its Territories and possessions until sunset, September 20, 2013. I also direct that the flag shall be flown at half-staff for the same length of time at all United States embassies, legations, consular offices, and other facilities abroad, including all military facilities and naval vessels and stations.

IN WITNESS WHEREOF, I have hereunto set my hand this sixteenth day of September, in the year of our Lord two thousand thirteen, and of the Independence of the United States of America the two hundred and thirty-eighth.


Associate Member Information Exchange

WHAT:  The IBAT Associate Member Council - made up of IBAT Associate Members - would like to help you get involved at Convention, answer your questions, get your feedback, and share tips for success working with IBAT member banks.  So please come early to join them for an exchange of information on how to make the most of your IBAT experience.


  • Live, interactive survey
  • Interactive discussion based on audience feedback[from survey] of needs which may include the following:
    • What’s in it for me?  What are the benefits of involvement in IBAT for you and your company?  What opportunities are available and how will they help you? What can I expect at Convention?
    • What is the best way to get the bankers’ attention and interest?
    • Highlights [what to attend, hot topics] of Convention and other IBAT Events.
  • Q&A.  An opportunity to have your questions answered “live” as well as hearing from others.  This is also a time to make suggestions to the Council regarding things that may enhance your IBAT experience..

WHEN:  Sunday, September 22, 2013.  Gather for networking at 10:30 a.m.; the informal meeting will be from 10:45 a.m. -11:45 pm. with time to network and ask questions following the meeting.

WHERE:  Westin La Cantera Resort in San Antonio in the Palo Duro Pavillion.

WHO: Open to all current associate members, exhibitors, and those companies supporting community bankers.  Hosted by the Associate Member Advisory Council.

WHY:  A great opportunity to learn and network with fellow associate members and companies in the financial institution industry.

We are asking that you register online at so that we may get a head count as we prepare for this event.  There is no charge to attend the Information Exchange