May Consumer Tips

The May version of IBAT’s Consumer Tips is now available online.  This month’s tips focus on paying for a college education through grants and loans, as well as helpful hints on paying back college debt.

This month’s tips were compiled by Teresa Cage Beasley, Instructor, communication and humanities, Panola College, Carthage, TX. Teresa is a freelance writer and photographer. Provided as a public service by IBAT and its Education Foundation.

IBAT’s Consumer Tips are distributed to weekly papers across the state of Texas.  As always, IBAT members are encouraged to distribute the tips to their local papers, in bank publications or in any other way you'd like. A customizable version of the release is available upon request.

Proposed Changes

The Consumer Financial Protection Bureau, last week, issued proposed changes to mortgage rules that would allow lenders a cure period to issue refunds if they discover that they have exceeded the 3% fee cap required for legal protections under Qualified Mortgage standards.  Under the proposal, lenders would have up to 120 days after closing to issue such refunds.

The proposed rule was issued in response to concerns about credit availability for those consumers close to the fee cap.  Many lenders set a lower fee cap in their own lending standards to allow for a buffer for potential mistakes.

“The Bureau understands that some creditors may not originate, and some secondary market participants may not purchase, mortgage loans that are near the QM limits on points and fees because of concern that limits may be inadvertently exceeded,” Bureau officials said. 

"The Bureau believes that a limited cure provision may promote consistent pricing within the qualified mortgage range by decreasing the market’s perceived need for higher pricing (due to compliance or secondary market repurchase risk) at the margins of the points and fees limits,” they added.

And the Award Goes to...

Many thanks go to all of our community bank members who nominated local teachers as candidates for consideration of the IBAT Teaching Excellence in Financial Literacy Awards. The 2014 class of nominees was excellent and twice the size of any other year of nominees. The judges pored over the applications and selected the following three teachers to be recognized as our 2014 Award Recipients. Each is invited to join the advisory board of the IBAT Teach the Teacher Program:

  • From First State Bank and Trust Company, Carthage (Jim Payne and Becky Eubank):
    Lisa Tate, Beckville Sunset Elementary School (3rd grade)
  • From Woodforest National Bank, The Woodlands (Ray Sanders):
    John Stephens Owens, The Woodlands College Park High School (12th grade)
  • From Extraco Banks, N.A., Temple (Beckie Johnston)
    Rebecca Larson, Temple High School (12th grade)

Following the award presentations at various local school and city council assemblies in May, summaries and photos of the award winners and their nominating bankers will be available on the IBAT Education Foundation website by May 30. Look for the past winners in the Foundation news archives.

Reg Burden Bills Moving

We are pleased to report that the House Financial Services Committee will consider (or, in legislative parlance, “markup”) a multitude of regulatory relief bills beginning on Wednesday.  Some 15 separate bills will be considered, along with a resolution to authorize the issuance of subpoenas to the Treasury and Department of Justice relating to recent settlements with large financial institutions.  For additional information, please refer to the Committee Memorandum.

Of particular interest to community banks are:

  • H.R. 2673, which confers QM status to any loan kept in-portfolio;
  • H.R. 3211, which modifies the definition of points and fees to exclude insurance and taxes held in escrow as well as fees paid to affiliated companies; 
  • H.R. 4466, which requires various regulators to assess duplicity or conflict with existing rules prior to issuance of a new rule, and also requires a review of existing regulations within 60 days of a proposed rulemaking;  and
  • H.R. 4521, which exempts creditors under $10 billion from escrow requirements on in-portfolio loans and increases the small mortgage servicer exemption to 20,000. 

Additionally, there are a number of bills addressing a variety of impediments to smaller public and private capital offerings that will likely provide some efficiencies for those seeking additional capital.

As you are aware, IBAT has been strongly pushing H.R. 1750, which contains a number of regulatory burden relief provisions.  With a number of provisions of that bill already passed through the House, the successful passage of the package described above will go a long way toward some meaningful changes to some of the more troublesome post-crisis challenges.  We are tremendously appreciative of the efforts of many to make this happen, but especially wish to thank Chairman Hensarling and his staff for bringing these important provisions to markup.

Constituents/friends of our two Democrat members of the Financial Services Committee are encouraged to contact their offices to encourage a “yes” vote on the important bills specified above.  Al Green (Gregg Orton is his banking staffer) can be reached at 202-225-7508, and Ruben Hinojosa (Holly Bullard) at 202-225-2531. 

In related news, the full House is scheduled to vote on two measures of interest to community bankers this week.  H.R. 2672  would provide a mechanism for banks to appeal the CFPB’s designation of a rural area.  H.R. 3329 would raise the threshold for small bank holding company regulatory relief from $500 million to $1 billion.

Congressional Visit Success

Community banker involvement can and does make a difference.  A hardy delegation of some 160 braved the torrential rain and normal challenges that Washington, D.C. offers to “tell the community banking story."  We very much appreciate all who took time away from their respective “day jobs” to join us for this important annual event.

We were able to meet with 34 of our 36 members of the Texas delegation, heard from a number of lawmakers in our traditional group meetings and joined ICBA and well over 1000 community bankers from across the country for a variety of events and programs, including an address by Fed Chair Janet Yellen. 

Constituents and engaged community bankers who have taken time away from the office and spent money to get to D.C. because they believe in their message and their industry is very compelling to our elected officials.  You are making a difference, and your efforts are appreciated tremendously

Baker Market Update: May 5, 2014

[Last] week’s market news might best be reviewed by Charles Dickens. Not unlike A Tale of Two Cities, this week reflected both the best of times and the worst of times. After confirming that the Bureau of Economic Analysis (BEA) had not made a typo when it reported that Q1 GDP (1st estimate) grew a miserly .1%, that got the worst news out of the way. The best news (relatively speaking) was reported this morning by the Bureau of Labor Statistics when it announced a 288k increase in Non-Farm Payrolls in April that helped bring the Unemployment Rate down to 6.3% from 6.7%. Also not a typo. In addition, we learned that previous reports were not as bad as we thought as revisions to February and March numbers increased the job creation count by 36k. Read more in the Baker Market Update.

Directory of Associate Members

The directory of IBAT Associate Members is now updated and ready to be downloaded from the IBAT website.  

IBAT's Associate Members provide a comprehensive collection of products and services to meet the needs of IBAT member banks.  With nearly 220 Associate Members, this listing will serve as a handy resource throughout the year.

Click here to download the Associate Member Directory.  Remember, too, that the Find a Supplier resource on the IBAT website is always helpful if you're seeking to search by a particular product.  


Whether or not you are joining IBAT and ICBA in Washington, D.C. this week, you can assist our efforts by providing feedback about the way that examiners have treated regulatory guidance in your recent examinations.

Bankers have long felt that examiners treat guidance and best practices as if they were enforceable regulations. In a speech last week, a representative of one of the federal bank regulators responded to banker complaints about guidance and best practices issued by her agency. The representative said that compliance with guidance is not optional, but it is not enforceable. She additionally said that, “best practices are procedures and approaches that certain banking institutions use... but performing them is not a regulatory expectation."

IBAT is interested in our bankers' thoughts about guidance and best practices issued by their federal regulators. If we can get sufficient responses to the below survey, we'd like to use the results in future meetings with the OCC, Federal Reserve and FDIC.  

Please click here to participate in the survey and have your voice heard in Washington D.C.

Financial Literacy Award

Discover Financial Services received an Excellence in Financial Literacy Education (EIFLE) Award from the Institute for Financial Literacy during the Annual Conference on Financial Education.  Discover won in the "Organization of the Year, Corporate Leadership" category for its financial education program, Pathway to Financial Success. The EIFLE Awards acknowledge the innovation, dedication and commitment of individuals and organizations that advance financial literacy education.

In addition to their own financial literacy efforts, Discover has been a great partner with the IBAT Education Foundation through its subsidiary, PULSE. Since the outset of the Foundation's Teach the Teacher Program™ in 2012, PULSE has led the way by providing financial, as well as teaching, support for the program.  

"Discover and PULSE lead by example in their commitment to financial literacy initiatives," said Mary Lange, President of the IBAT Education Foundation. "We could not ask for a better corporate partner as we pursue our mission of 'building financially literate communities' across Texas."

New Services Board Member

The Independent Bankers Association of Texas is proud to announce that Thom Canfield, president and chief executive officer of Mason Bank in Mason, Texas, was recently elected to the Board of Directors of IBAT Services Inc.   

As a member of the IBAT Services Board of Directors, Canfield joins a select group of Texas community bankers charged with recommending products and services for endorsement by IBAT.

Canfield has been with Mason Bank since 1992 and has served as president and chief executive officer since 2003.  He is an active member of First United Methodist Church and the Mason Lions Club.  Additionally, he serves as the Treasurer of the Odeon Preservation Association of Mason.

Debit Surcharge Prohibition

The impact of a prohibition on surcharges for debit card transactions made headlines last week, as various news outlets in the Brazos Valley reported on a complaint filed by a customer against local businesses in the area. Several merchants, including a donut shop and pizza restaurant, were mentioned in the complaint for charging a $.49 surcharge on all debit transactions.

Brazos Valley Merchant Services owner Charlie Benbow told Bryan/College Station news outlets that the fee should not be seen as a surcharge, but rather as an incentive to use cash. It is hard to imagine that argument will hold water with the Texas Department of Banking, which is investigating the matter.

The prohibition on debit surcharges was passed into Texas law during the 83rd Texas Legislature in 2013. Championed by IBAT, the legislation was intended to update existing prohibitions applicable to surcharges on credit card transactions.  Further, the measure was intended to prevent merchants from entering into relationships with big banks to steer consumers towards paying with their cards, rather than cards issued by community banks.

As retailers and banks alike continue to debate the appropriate pricing of interchange fees and who should bear the cost of those fees, IBAT fully expects challenges to the gains we have made thus far.  The next logical step for the 2015 session, however, is to add enforcement authority into the law.

New TX SML Commissioner

After a nationwide search, the Finance Commission of Texas announced last week the selection of Caroline C. Jones as the Texas Department of Savings and Mortgage Lending’s Commissioner, effective June 1, 2014.

The Department provides consumer protection to Texas consumers through its regulatory oversight of the state savings bank industry, which has aggregate assets of over $10 billion, and the residential mortgage industry, which currently has over 16,000 licensed individuals and companies conducting business in Texas. Ms. Jones will be the ninth person to serve as Commissioner of the Department.

“We applaud the Texas Finance Commission on their selection of Caroline Jones for this important position,” said IBAT Executive Vice President Steve Scurlock.  “We look forward to continuing an excellent and longtime working relationship with Caroline, and extend our heartfelt congratulations for this well-deserved appointment.“

Ms. Jones succeeds Mr. Douglas B. Foster as Commissioner, who after 29 years with the Department, the last seven of which he served as Commissioner, will be retiring from public service in August.

Baker Market Update: April 28, 2014

...Ernest Thayer’s famous quatrain reminds us that it’s baseball season. The beginning of baseball season should also herald the beginning of home-buying season; another favorite American pastime. Unfortunately, the news from the housing sector this week was definitely a swing-and-a-miss. New Home Sales fell 14.5% in March to an eight-month low, Existing Home Sales fell .2%, and Mortgage Applications, a weekly statistic, fell 3.3%. The inventory of unsold new homes has also risen to a level not seen since the latter part of 2010. Despite the pitcher’s count, home prices are still headed up.

Read more in the Baker Market Update.

SHAZAM/Visa Agreement

DES MOINES, Iowa (April 16, 2014) — The SHAZAM Network and Visa Inc. today announced an agreement to enable issuers to use Visa’s common debit application identifier (AID) for Visa- and SHAZAM-branded cards and transactions.

Visa offered the use of its common domestic AID and Visa Smart Debit Credit (VSDC) EMV chip application, which support U.S. debit regulations requiring the ability to route debit transactions over multiple, unaffiliated networks. By sharing this AID among all U.S. debit network participants, EMV chip adoption will meet the requirements of issuers, merchants, networks and U.S. regulation while maintaining global international acceptance.

“This agreement reflects nearly two years of industry engagement,” said SHAZAM CIO Terry Dooley. “SHAZAM is proud to have acted as a driving voice in the original SRPc chip-and-PIN working group and the Debit Network Alliance. The network has been active in the EMV Migration Forum, ATMIA, NAC and other industry forums. A collaboration that allowed for merchant and issuer routing choice for contact and contactless payments supporting PIN, no CVM, and signature was our goal, and we believe this agreement provides the terms to accomplish that goal.”

Visa’s common AID will enable point-of-sale debit transactions and domestic ATM transactions on Visa and SHAZAM-branded debit cards.

“It remains important for all U.S. debit card issuers to evaluate the business case and the industry as they begin to consider a migration to EMV,” said Dooley. “Particularly for smaller issuers, including community banks and credit unions, a cost-benefit analysis that takes into account the institution’s current and predicted fraud risk, as well as the potential return on an EMV investment, is a critical first step.”

About SHAZAM  

The SHAZAM Network was founded in 1976 and is one of the last remaining member-owned and -controlled electronic funds transfer (EFT) networks and processors in the industry. SHAZAM provides innovative EFT services to community financial institutions throughout the United States. SHAZAM is a single-source provider of the following services: core, risk management, card, ATM, marketing, merchant, mobile, and automated clearing house (ACH). To learn more, visit shazam.net.