What Your Board Should Know

The following article appears in the current March/April edition of The
Texas Independent Banker

What Your Board of Directors Should Know: Creating a Strong (and Effective!) Community Bank Board of Directors

By Kelly Goulart

We all recognize that bank directors must make decisions that impact
three very distinct stakeholders - shareholders, depositors, and
regulators.  There is another distinct stakeholder for a community bank
board:  the very community they live, work, and worship in.  The fact
that we call on our community bank board members to help supervise and guide a
critical part of communities across the state means that a community bank board
member must be balanced, competent, and committed to the task.  Not an
easy chore when trying to identify and develop candidates for the job.

First, a board member should be balanced.  One critical task is
making sure that whomever is selected reflects the community, but is not
duplicative of another board member.  Individually they understand the
market and have a strategic vision for the bank that resonates with
shareholders and senior management.   Those individuals understand
that the role of a board member is to focus on the sustained value of the bank
while growing their community, and how they can contribute to both.  However, board members and candidates should have
diverse profiles and thoughts.  A diversity of skills, expertise and
experience promotes discussion and a certain amount of what we like to call
"efficient friction."  This kind of balanced board membership can
bring real value to the bank by addressing the wants and needs of each group of
stakeholders and providing strategic vision.

A board member should be competent.  Gone are the days when Aunt
Tilly was put on the board for the simple fact Aunt Tilly\'s family has had a
member on the board for 50 years.  Any candidate being considered should
bring strong business expertise to the board, preferably banking
experience.  Simply put, the day of the amateur part-time board member is
over.  Look for community business leaders who understand the wants and
needs of the various stakeholders, understand the concept of risk
management,  and can make tough business decisions.  But just because
they are strong business leaders does not mean they will be equally effective
as board members.  They need to be consensus builders.  Each board
member should work toward making sure the board functions as a team and that it
understands and "owns" the strategy of the organization.

Finally, a board member should be very committed to the role. 
Being a member of a community bank board takes a certain level of dedication
that not every person can muster.  For example, any individual being
considered should be unequivocally dedicated to the continuing educational
demands that will be placed upon them.  This requirement should be clearly
addressed in both the appointment process for selecting candidates and in the
responsibilities for continuing board members.

Karen Neeley, IBAT General Counsel, in a recent email wrote, "I would
suggest that one important issue is director training.  They need to be
educated not only on their core duties and responsibilities and liabilities but
also more specifically on topics such as BSA/AML and fair lending.  They
absolutely must understand "conflict of interest" issues, code of
conduct/ethics requirements (including Bank Bribery Act), and confidentiality
requirements.  Regulation O and Regulation W are very important for them
to understand as well."  That level of education and understanding will
require a board candidate who is committed and willing not only to learn, but
to re-learn.

So any prospective board member should
be balanced, competent, and committed.  That should be made clear from the
very beginning.  The last thing that should happen is, after joining the
board, an individual says "I had no idea it was going to be so much
work!"  One way to help avoid that is by providing every prospective (and
existing) board member with a written "job" description.  That job
description should address the role of the director and what exactly will be
expected of them, including the time and educational commitment.  Everyone
should have a very clear understanding of the strategic function of the board
and should sign off on a job description that includes their role and specific
responsibilities before joining the board.  It\'s a good idea for the board
to revisit those written "job" descriptions at least annually so they can
sharpen their focus. 

Kelly Goulart is IBAT\'s Regulatory Compliance Manager.

CCBCO Designation

IBAT is pleased to announce that
Kelly Goulart recently earned the Certified Community Bank Compliance Officer
designation, offered by the Independent Community Bankers of America

Goulart currently serves as IBAT\'s Regulatory Compliance Manager, part of our
compliance team answering member questions through the Compliance Helpline.
 He began his career in banking in 1986 as an Internal Auditor and shortly
thereafter moved into regulatory compliance.  He has worked in banks and
as a consultant in Virginia, South Carolina and Texas in the areas of
compliance and credit review. He has held the positions of Compliance Officer,
Chief Operations Officer, Chief Financial Officer and Director.

Upcoming Webinar

We invite you to join Travelers for a webinar presented through Bond & Financial Products Financial Institutions, on March 19, 2013 (1 p.m. CT). Thomas Bieging and Timothy Krsul will discuss potential lender liability issues in commercial loan foreclosures. 

The presentation is intended to outline the steps to avoid lender liability claims in the commercial loan foreclosure context. 

About the presenters:
Thomas Bieging is a partner with Bieging Shapiro & Barber LLP. He focuses his practice in the areas of banking and commercial litigation.
Mr. Bieging\'s financial institutions practice includes holding company and change of control applications, loan documentation, regulatory compliance advice, loan work-outs, and the sale, acquisition and merger of banks and bank holding companies. He has litigated with government agencies on financial institution policy matters with national implications. His extensive financial institution regulatory practice includes the negotiation of regulatory agreements, business and capital plans, acquisitions and chartering. He has been involved in lender liability litigation defending financial institutions. He serves as counsel to the Independent Bankers of Colorado.

Timothy Krsul is a managing director with Travelers\' Bond & Financial Products Claim Group and has been with the organization since April 2005. Prior to joining Travelers, Mr. Krsul was a partner with the litigation practice group of Oppenheimer Wolfe & Donnelly in Minneapolis. There he handled complex commercial litigation. Mr. Krsul has 11 years of litigation and commercial transaction experience in private practice.

Register here for the March 19th webinar.

Staff contact: Carol Troy, ctroy@ibat.org, 512-275-2236

2013 Community Banking Month

a proclamation issued last week, Texas Governor Rick Perry declared April 2013
"Community Banking Month" in Texas.  

banks have always made the majority of small business and agriculture loans,
providing farmers, ranchers, and business owners with a sturdy financial
market," Perry said.  "I encourage all Texans to acknowledge the
civic contributions of community banks and the role they play in strengthening
local economies and providing excellent personalized service to their banking

has placed a high resolution PDF of the proclamation on our
website for your download and personal use.  We encourage members to
participate proudly in Community Banking Month by displaying the proclamation
in their lobbies throughout the month of April.  

thank Governor Perry for his ongoing and staunch support of the community
banking industry.  

Leadership Conference Speakers

Jase Robertson
God, Family, Ducks... In
that order!

of A&E\'s Duck Dynasty already know that Jase Robertson has a
"different"way of looking at life...God, Family, Ducks - In that
order!  With his characteristic wit, Jase will be on hand to challenge
attendees to examine life\'s priorities and make sure you\'re having a little fun
along the way.

Dr. Jeff Hester
The Morning After:
 Recovering from the Disaster You Should Have Seen Coming

A leader is
the person out in front who is making the decisions that set the course of an
organization.  Leadership requires vision, and vision is grounded in
knowledge.  As humans we have a strong tendency to hang on to the things
that we think that we know.  That complacency can mean death in times as
volatile as these.  The good news is that there is a way to improve an
organization\'s vision and create new opportunities at the same time.  In
this lively presentation rich with stories from the front lines, Dr. Hester
offers his perspective on what it takes to make high stakes decisions in a
fast-paced world.

Eddie Johansson
Do You Know Credit?
 Beyond the Numbers: How FICO Credit Scoring Really Works

Get ready to
have your credit score assumptions shattered.  Learn ways to accurately
reflect your customers\' credit risk that raise their credit scores - vital
information to lead your bank and your customers in these times.  Gain
knowledge you can teach others to take your organization to a new level in
credit expertise and service.  From the basics to the advanced, Johansson
is a well-known, popular and experienced educator on how the FICO scoring model
works. This presentation includes new information on the How/What/When of
the FICO \'08 model.  A Question and Answer session follows his

Andy Slipher
How to Think Big and Win Big
Marketing ROI (Even in Non-Traditional Media)

years have brought the promise (and, often, disappointment) of social media as
a marketing tool for banks. Add in new FFIEC guidelines, and many bankers have
opted to avoid any online presence outside of their own website. In this
session, Andy Slipher of Slipher Marketing explores strategies for maximizing
your marketing return on investment, including the use of social media.



American Banker

The Consumer Financial Protection Bureau is
targeting large banks and a wide variety of nonbanks rather than
community banks, a regional director of the bureau said last week.

fact, the next industry in the CFPB\'s crosshairs is nonbank collection
agencies, Jim Carley, the bureau\'s Southeast regional director, said
during a panel discussion in Greensboro, N.C., hosted by the North
Carolina Bankers Association. The CFPB is already looking into payday lenders, mortgage servicers, mortgage origination firms and credit bureaus.

Read more


IBAT offers members complimentary subscriptions to American Banker.  Please contact Alina Greavu at agreavu@ibat.org to sign up to receive online access to American Banker.

Concealed Handgun Policies

this month IBAT President and CEO Chris Williston polled IBAT member banks on
their employee and/or customer policies regarding the carrying of concealed
handguns in their lobby locations.

"In the months since the tragic events at Sandy Hook Elementary,
there has been much discussion on gun control and firearm safety. This has led
more than a few IBAT members to contact us to inquire as to the practices of
their peers in allowing employees and/or customers to carry concealed weapons
into their banks,"  Williston said. 

Here are the results to the two most pertinent questions...

What is your bank\'s policy regarding CHL-holding
customers carrying a firearm into the bank lobby?

46.79% - We neither encourage nor discourage customers from
carrying concealed weapons with any type of sign.
22.94% - We post a sign compliant with Texas law requirements prohibiting the
carrying of firearms into our bank locations.
18.35% - We allow customers to carry concealed firearms into our bank
11.93% - We post a non-compliant sign prohibiting the carrying of firearms into
our bank locations.

What policies do you have in place regarding employee
possession of firearms in the bank?

50% - We prohibit all employees from carrying or possessing
firearms in our bank locations.
36.46% - We allow any employee with a Concealed Handgun License (CHL) to carry
a firearm in our bank locations.
11.46% - We allow certain designated individuals to carry or possess firearms
in our bank locations, with proper licensure.
2.08% - We allow certain designated individuals to carry or possess firearms in
our bank locations, with proper licensure and additional bank-mandated


Bankers Legislative Day

Over 175 community bankers and
other IBAT members made the trek to Austin last Tuesday to participate in the
democratic process - up close and personal.  We were obviously pleased
with the turnout and the level of participation, and sincerely appreciate those
making the trip.

addition to a multitude of private meetings with various representatives and
senators, the group heard from a number of key lawmakers in a Tuesday afternoon
briefing session. A packed house for dinner that evening was followed up by a
breakfast reception on Wednesday morning, where we were joined by an impressive
number of legislators and staff from the Capitol.

to all who participated in this important event.  A few of the many
pictures of the event are now online.

PHOTO: Speaker Joe Straus with IBAT Chairman Troy Robinson (Bank Texas -

Fair Housing App

U.S. Department of Housing and Urban Development (HUD) last week unveiled the
first housing discrimination mobile application for iPhone and iPad.  

this first fair housing mobile application equips people everywhere with the
information they need to combat housing discrimination," said John
Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity.
"We are maximizing the latest technology to make the process for filing
fair housing complaints faster and easier and arming our fair housing partners
with the information they need to understand their fair housing rights and

app provides information about the fair housing complaint process, and allows
the public to access HUD\'s toll-free discrimination hotline and link to HUD\'s
fair housing website.

While IBAT supports giving the public the tools it needs in fighting
fair housing violations, we fear that giving the public an app to submit
complaints could increase the number of baseless complaints.

Special Election

Former Harris County Commissioner Sylvia Garcia won a special election runoff in Senate District 6 (Houston) on Saturday.  This election was necessary due to the death of Senator Mario Gallegos prior to the November elections.  Garcia garnered 52.89% of the votes, and won over sitting State Representative Carol Alvarado, who will retain her House seat.

The IBAT PAC, after polling Harris County members, opted to remain neutral in this race as the results of the poll were less than decisive.  

We worked closely with Commissioner Garcia several sessions ago as she was attempting to add a fee to foreign wire transfers to fund indigent health care.  While on opposite sides of this issue, we found her to be open and cordial throughout the process.  We congratulate her on this hard-fought victory, and look forward to working with her in her new capacity as State Senator.  

Online Safety

Federal Trade Commission (FTC) has a new video about how to protect your
information while using public WiFi networks. Most of us have used them in
coffee shops, hotels, restaurants or airports. Are they safe?  According
to the FTC, not necessarily.  

video, and others, on the OnGuardOnline.gov web site, helps individuals,
businesses, parents, children and educators stay safer online. Link to these
short videos from your bank\'s web site or use them to train employees about
online safety.

Leadership Conference

IBAT is proud to announce that
singer-songwriter Bruce Robison has been booked to perform on Friday evening at
the IBAT Leadership Conference, June 13-15 at the
Horseshoe Bay Resort Marriott.  

has written several songs which became no. 1 hits when covered by well known
singers, including: "Travelin\' Soldier" (recorded in 2003 by the
Dixie Chicks); "Angry All the Time" (recorded by Tim McGraw and Faith
Hill in 2001); and "Wrapped" (recorded in 2006 by George Strait).

addition of Robison rounds out the IBAT Leadership Conference lineup of
entertainment and speakers. Previously announced to be a part of the
conference are Jase Robertson of Duck
, Dr. Jeff Hester, Andy Slipher of Slipher Marketing and
Eddie Johansson of Credit Security Group.

Click here to register for the 28th Annual Leadership
Conference now.

Legislative Day

than two hundred community bankers, vendors and spouses are in Austin this week
for IBAT\'s Community Banker Day at the Capitol. The event got underway Tuesday afternoon as attendees gathered with a number of lawmakers and IBAT staff for
briefings on key issues facing the 83rd Texas Legislature.  Wednesday,
members of the legislature will join IBAT bankers for breakfast at the Austin

in Austin, IBAT members will discuss several issues of importance to community
banks in Texas including:

  • Tax
    Lien Lenders;
  • Service
    on Financial Institutions;
  • Debit/Credit
    Card Fraud; and
  • Several
    "defensive" issues.

update on many of these issues appeared in yesterday\'s edition of the IBAT Legislative Insider, while others are
outlined in IBAT\'s State Legislative Priorities document. 

Regional Meetings Wrap Up

Round two of IBAT\'s "Tour de
Texas" concluded late last week.  Over 800 Texas community bank and
associate members attended meetings held in Galveston, Schulenburg, Harlingen,
Corpus Christi, Houston, Kilgore, Sulphur Springs (Yantis) and Dallas.

learned for the first time about ICBA\'s and IBAT\'s federal legislative
priorities in the 113th Congress.  IBAT President and CEO Chris Williston
and ICBA\'s Executive Vice President for Congressional Affairs Paul Merski
detailed provisions of a legislative platform known as the "Plan for Prosperity."

said "our Plan for Prosperity is not a single bill but an outline of
priorities to obtain comprehensive meaningful regulatory relief for community
banks."  Merski credited IBAT and its Community Bank Task Force
organized last Fall for developing many of the components of the platform.
 "IBAT\'s task force did a lot of the heavy lifting and we appreciate
the good work of the volunteer bankers and industry partners who spearheaded
this project," he said.

plan will not be to introduce a single bill that encompasses all of these
regulatory relief priorities in one package but a series of bills that can move
independently through the regular order of business on committee jurisdictional

IBAT Board of Directors is expected to take up the platform components tomorrow
for consideration and endorsement at its regularly scheduled Spring Board
meeting in Austin.  "Given the work that has already been done by the IBAT
task force, I would be shocked if the Board didn\'t enthusiastically lend IBAT\'s
unconditional endorsement of this project," Williston said.
 "It\'s high time we quit talking about regulatory relief and the need
for a two-tiered regulatory system and get on with making it happen."