Congratulations to Financial Women in Texas (FWIT) on a successful annual conference last weekend with record attendance!
FWIT announced new Executive Officers for the 2013-2014 year. Congratulations to:
- President: Janet Dirba, (Vice President, Wallis State Bank, Wallis, Texas)
- Vice President: Ellen Parsons, (Vice President & Trust Officer, Centennial Bank, Kerrville, Texas)
- Treasurer: Cheryl Linder, (Vice President, Accounting & Administration, NewFirst National Bank, El Campo, Texas)
- Secretary: Barbara McMillen,(Assistant Vice President, Lending, GECU, El Paso, Texas).
Financial Women in Texas (FWIT) brings together women in the financial services industry for the exchange of ideas, experiences and interests. The goal of the organization is to further the meaningful professions or careers of its members and women in general. FWIT encourages women to choose financial services as a career and work to advance the career opportunities for all women in the financial services industry.
October is National Cyber Security Awareness Month (NCSAM), a collaborative effort between government and industry to ensure every American has the resources they need to stay safe and secure online. Since its inception a decade ago under leadership from the U.S. Department of Homeland Security and the National Cyber Security Alliance, NCSAM has grown exponentially, reaching consumers, small and medium-size businesses, corporations, educational institutions and young people across the nation.
As an industry, we're all concerned about potential breaches in security and the resulting loss of information and confidence that can result. Greater security can only result from a partnership between consumers and businesses. IBAT encourages member banks to help promote greater awareness of cyber security issues by sharing resources found on the NCSAM homepage.
The September/October issue of The Texas Independent Banker magazine is now online. Among the articles featured in the "Innovation and Best Practices" issue are:
- General Counsel's Corner - Policies and Procedures Practice Tips;
- Bond Yields and Fed Policy - Food for Thought;
- The Compliance Guy - Implementing New Regulatory Requirements;
- Have We Done Enough to Manage Risk? Identifying and Mitigating Risk Depends on Corporate Culture; and
- Insects, Chimpanzees, and Innovation.
House and Senate negotiations continued late into the night in efforts to avert a government shutdown. We awake this morning and await the news... was a government shutdown averted? And if not, what does that mean for you and your community bank?
- Most regulators Unaffected - Since the Federal Reserve, Office of the Comptroller of the Currency, CFPB and FDIC are not funded as part of the government budget, their operations will be unaffected by a shutdown. This means that scheduled examinations will not be affected. Some securities-related regulators are subject to the shutdown, including both the SEC and FASB. Thus, development of any interagency rules with these regulators would be suspended.
- FHA, VA, USDA and SBA Loans - The Federal Housing Administration received multi-year appropriation authority which will prevent it from being shut down. This means that the FHA, along with the VA and USDA, will continue to process loans that were approved before the shutdown. However, new applications that were not approved before today are delayed until the shutdown is resolved. The Small Business Administration (SBA) is subject to shutdown.
- Limited Action by Treasury - The Treasury Department's capacity to manage the government’s cash position will not be affected by a shutdown. However, its ability to advise the White House on policy issues will be limited.
- Farm Bill Expiration - With Congress and the White House playing the staring game over funding the federal government, it went widely unreported that the extension of the 2008 Farm Bill expired today. While House Republicans and Senate Democrats are most divided on the issue of food stamp funding, there are also contentious debates regarding expansion of the taxpayer-subsidized crop insurance programs. A conference committee is expected in the weeks ahead, but there will not likely be resolution on a farm bill extension until Congress takes action on both a continuing budget resolution and an expansion of the federal debt ceiling.
Now that the tumult from last week's "taper caper" has subsided and Senator Ted Cruz's career as an extemporaneous speaker has ended, credit markets have managed to hold on to, and even further, the price gains that were initially sparked by the Fed's inaction. A steady flow of data [last] week has failed to change perceptions that economic performance is, and will continue to be, sluggish.
Despite the positive influence of a year-over-year 12.39% rise in the Case-Shiller 20 City Home Price Index, the Conference Board's Consumer Confidence Index dropped to 79.7 from last month's 81.8. This represents a four month low in that measure. If you don't like that one, however, there's always the University of Michigan's Index of Consumer Sentiment which rose last month to... Read more in the Baker Market Update.
Timely, Insightful, Productive, Fun. These were just a few of the observations of the more than 650 bankers, spouses and industry partners who packed the La Cantera Resort last week in San Antonio for IBAT's 39th Annual Convention. From the opening Saturday tailgate party, to the concluding general session, registrants were treated to a unique mix of quality educational workshops and social activities.
Keynote speakers included Jason Dorsey, the Gen Y Guy; Tom Parliment of Parliment Consulting; Dallas Federal Reserve President Richard Fisher; ICBA CEO Camden Fine; and business strategist Joe Calloway.
"I think this was one of the greatest speaker lineups we have ever had," said IBAT President and CEO Chris Williston. "From Jason Dorsey's energetic and optimistic observations that community bankers are uniquely positioned to capture the emerging generational markets, to Richard Fisher's attack on "too big to fail" and Cam Fine's passionate quest to promote industry regulatory bifurcation, IBAT members were reminded why industry unity makes no sense in the current financial environment," Williston added.
The convention concluded on a high note when newly-elected IBAT Chairman Jay Gober of the First State Bank in Graham provided his heartfelt remarks on what it means to be a community banker, followed by the surprise announcement and appearance by former Texas US Senator Kay Bailey Hutchison, accepting the role of Honorary Chairman of the IBAT Education Foundation.
All convention activities have been captured and can be viewed here. IBAT's 40th Annual Convention returns to the Worthington Hotel in Fort Worth, September 27-30, 2014.
October is a busy month for the Leadership Division's Regional Meetings. We hope you'll take advantage of one of these opportunities to network and learn!
Thursday, October 3
Join your colleagues for an educational event featuring Eddie Johansson on the topic IBAT Teach the Lender™. You can attend the luncheon in Mount Pleasant or meet us in Longview for a reception later that day.
Registration deadline is September 25th. This program will provide one (1) hour of Continuing Education Credit hours (CEU's). Register here.
Thursday, October 24
Leadership Division Regions 3 and 4 invite you to join your fellow area community bankers from the Dallas-Fort Worth area for a luncheon with guest speaker Damon Thompson, Vice President of Benefits for IBAT Associate Member Employer Flexible. Damon will provide important information on the effects of the new health care law as it affects your bank and employees.
There is no fee for lunch and an optional golf tournament immediately follows for $50 per person. Register here.
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’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.
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.
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.
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.
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.