IBAT News

Abound Resources


On July 10, Abound Resources, an IBAT endorsed service provider, announced
their acquisition of Sheshunoff Consulting + Solutions' suite of Risk
Management Software products
.

In a joint statement, President and CEO Brad Smith stated, "We are
extremely pleased to be able to acquire the leading online Enterprise
Risk Management
system (ERM) designed specifically
for the community bank and credit union market. The bRisk suite combines
compliance best practices for BSA, Fact Act, SOX, FDICIA, vendor management,
business continuity planning and internal audit with automated risk
assessments, controls and reporting to provide a comprehensive solution
for bank and credit union compliance - all at a price point that fits a
community institution compliance budget." 

Ms. Sheshunoff noted that, "Based on the fit of
our services with theirs and their track record of outstanding client service,
we felt that Abound was our best choice to ensure continued high levels of
service and the best path to a seamless transition for our bank and credit
union clients."

Congressman Hinojosa's Visit


Congressman Ruben
Hinojosa visited with veterans at The First National Bank of Hebbronville.
During the recent ICBA/IBAT visit to Washington D.C., Congressman Hinojosa
expressed an interest in meeting with the veterans in Hebbronville. Bank
President Hinojosa offered the Bank's Community Room and his staff coordinated
the luncheon. Congressman Hinojosa replaces Congressman Henry Cuellar as House
Representative for Jim Hogg County (Hebbronville) as a result of
re-districting.

Pictured with the Congressman are President/CEO Israel Hinojosa
and employees of the bank.

HCSB Merger


[Plainview, TX] Recently, the Boards of Directors of HaleCo Bancshares, Inc. and LubCo Bancshares, Inc. – the two holding companies of HCSB, a state banking association, and Citizens Bank, respectively – approved a definitive agreement to merge the two banks into one, with HCSB being the resulting bank.

Affiliated for years and sharing common ownership and directors, the two entities have entered into a ‘merger of equals’ transaction through a stock exchange as a means to expand services to customers, manage costs and operate more efficiently.

Subject to customary conditions and approval from bank regulatory authorities, the merger brings together two of the oldest and strongest community banks in the Panhandle, both very well respected and sharing a common cause and guiding principles.


The transaction is expected to close in the fourth quarter of 2012, with HCSB doing business as a wholly-owned subsidiary of HaleCo Bancshares, Inc., which also will change its name to Commerce BancShares, Inc. as a part of the proposed transaction. The resulting bank will operate under HCSB’s 1934 bank charter. Upon closing, HCSB will officially operate a total of 12 full-service banking centers and one loan production office across four key regions of Texas: the Panhandle, South Plains, Lubbock and the Hill Country.

Because of strong brand positions in the market regions the two banks currently serve independently, HCSB will continue to operate and market itself as such in the Panhandle and Hill Country, with Citizens operating and marketing itself as “Citizens Bank, a division of HCSB” in Lubbock and the South Plains. “There is no better time than the present to bring Citizens and HCSB together. Both are true community banks that believe in the power of meaningful relationships with customers and, ultimately, when merged, can remain the bank generations can count on,” comments HCSB Chairman J. David Williams.

“The coming together is truly a positive move that will allow us to bring the best to market in all our shared communities – including the expansion of trust and wealth management services and mortgage lending in Lubbock and the South Plains,” comments Citizens Bank Chairman E.W. Williams, Jr.

Executive management, corporate and bank operations, compliance, finance and credit administration for the merged organization will work out of a new facility in Lubbock, which HCSB is in the process of acquiring.

HCSB was chartered in June 1934 in Plainview, Texas and operates seven banking centers – four in West Texas (two in Plainview and one each in Hart and Tulia) and three in the Hill Country (two in Kerrville and one in Fredericksburg) – and a loan production office in Boerne. Assets as of June 30, 2012 were $397 million.

Citizens Bank was chartered in October 1932 in Slaton, Texas and operates five banking centers – one in Slaton, one in Post, one in Shamrock and two in Lubbock. Assets as of June 30, 2012 were $275 million.

Upon completion and close, it is anticipated that the combined bank will have over $700 million in assets. Characterized by consistent, conservative growth throughout their histories, HCSB and Citizens have grown into two of Texas’ most respected independent banks.

Grand Opening


American Bank, a Texas-based bank serving Austin
since 2001 and IBAT member, kicked off the July 4th holiday a day early with an
all-American celebration at their third local location, which opened early June
in the historic Sampson Building downtown.  

Banking
veteran and Austin Region President Robert Greenwood and his staff gave a warm
welcome to the community and are geared up for the ever-growing business
market. The branch offers full depository and commercial loan services, with
three commercial lending officers located there offering convenience and
commitment to Greater Austin.

PHOTO:
Left to right, Emily Ballenger, Chris Bourne, Nick Vetsch, Robert Greenwood,
Trim Traister, Melody Garrett and Richard Scanio.

IR/Liquidity Risk Disclosures


The
Financial Accounting Standards Board (FASB) is calling for comments on its
proposal to expand liquidity and interest rate risk disclosures.  

Under
the proposed rules, a financial institution would have to:

  • Disclose
    the carrying amounts of classes of financial assets and financial
    liabilities in a table, segregated by their expected maturities, including
    off-balance-sheet financial commitments and obligations;
  • Disclose
    information about its time deposit liabilities, including the cost of
    funding in a table or list during the previous four fiscal quarters;
  • Disclose
    its expected cash flow obligations in a table, segregated by their
    expected maturities, without being required to include the reporting
    organization's financial assets in that table;
  • Provide
    its available liquid funds in a table, which includes unencumbered cash,
    high-quality liquid assets, and borrowing availability;
  • Provide
    additional quantitative or narrative disclosure of the organization's
    exposure to liquidity risk, including discussion about significant changes
    in the amounts and timing in the quantitative tables and how the reporting
    organization managed those changes during the current period.

Additionally,
the rule would require disclosure of:

  • The
    carrying amounts of classes of financial assets and financial liabilities
    according to time intervals based on the contractual repricing of the
    financial instruments;
  • An
    interest rate sensitivity table that presents the effects on net income
    and shareholders' equity of hypothetical, instantaneous shifts of interest
    rate curves; and
  • Quantitative
    or narrative disclosures of the organization's exposure to interest rate
    risk, including discussion about significant changes in the amounts and
    timing in the quantitative tables and how the reporting organization
    managed those changes during the current period.

FASB has set a comment deadline of September 25, 2012.  This proposal epitomizes unnecessary
and costly regulatory burden and IBAT will be commenting accordingly.
 It
is our hope that you will do the same.  To file a comment, please follow
the instructions found here.

Cyber Fraud


If
a financial institution uses reasonable security precautions to protect
customers from cyber fraud, is the bank released from liability when fraud
occurs?  According to a decision issued by the U.S. Federal Court of
Appeals for the First Circuit, the answer is no.  

The
question originates from an August 2011 case which held that Ocean Bank was not
responsible for a $588,000 cyber crime in 2009 because it complied with
security standards issued by federal regulators.  The decision, reversed
last week by the First Circuit, effectively opens the door for business owners
victimized by online fraud to recover stolen funds by suing their bank.  

A
full breakdown of the case and copy of the decision can be found here.

To
make sure that your bank is up to speed on IT security and protection from
cyber fraud, please consider attending IBAT's IT Security Summit on August 9 in Dallas, TX.

Baker Market Update


While
the globe's top physicists have been sidetracked by the discovery of a
sub-atomic particle that will help them explain the mysteries of life, they've
missed something else that's been happening right under their Newtonian noses.
The world is slowing down. Just ask the scientists at the Bureau of Labor
Statistics. In a report released [Friday] morning, they announced that Non-Farm
Payrolls rose just 80m last month against an expectation of a 100m increase.
The Unemployment Rate remains unchanged at 8.2%, but the Underemployment Rate
(U6) rose by a .1 to 14.9%... Read more in the Baker Market Update.

Your Bank's Identity


Like most companies, banks and financial
institutions invest enormous amounts of time and money crafting what they think
is a unique identity. That identity is meant to appeal in an emotionally
engaging manner, build deeper customer relationships and positively affect
market share and profitability. It's a good idea - so good that every bank does
it... More in the Gallup Business Journal

Silver Alert: Luis Martinez


AFFECTED TEXAS
COUNTIES AND/OR NWS REGIONS:

REGIONS
DALLAS, DENTON, ELLIS, HOOD, JOHNSON, PARKER, ROCKWALL, TARRANT AND WISE
COUNTIES

THIS
IS A MISSING SENIOR ALERT ISSUED BY THE TEXAS SILVER ALERT NETWORK

The FORT WORTH POLICE DEPARTMENT is searching for LUIS
MARTINEZ, diagnosed with Alzheimer's, HISPANIC, MALE,
78 years old, DOB 02/21/1934, HEIGHT 5 FEET 4 INCHES, WEIGHT 170
lbs, BROWN Hair,
BROWN Eyes, LAST SEEN WEARING A BASEBALL HAT,
GREY SHIRT, GREY PANTS AND BLACK SHOES. REQUIRES A CANE FOR WALKING.                                                                

The senior
citizen was last seen at 2:30 AM, 07/08/2012 at ESTATES
HEALTHCARE & REHABILITATION AT 201 SYCAMORE SCHOOL ROAD, FORT WORTH,
TARRANT COUNTY, TEXAS.

Law
enforcement officials believe this senior citizen's disappearance poses a
credible threat to HIS/HER own health and safety.

If you have
any information regarding this missing senior citizen, contact the FORT WORTH PD at 817-335-4222.

News Media
Point of Contact is
FORT WORTH PD at
817-335-4222.

Summer Politics


With the delays in the primaries subsequent to hurdles with
the new redistricted election maps, we have the odd opportunity to vote in
runoffs at the end of this month.  The last round of elections prior to
November are set for July 31.  Early voting starts on the 23rd,
and will run only until the 27th  rather than the customary two
week period. 

Many of you have received emails from us seeking input on
your local races.  We did not poll every district in which there is a
runoff, but rather those where we heard from you requesting support or have had
direct communication with one or more of the candidates.  The majority of
the surveys reflected a "split" in support among our membership, which results
in neutrality for us.  We very much appreciate all of the input on these
races as we determine which, if any, of the candidates to support. 
Further, we are tremendously grateful to all of you who have supported the IBAT
PACs financially over the years.  It makes a difference!

We have engaged and made PAC contributions in several "open
seat" races based upon the overwhelming support of the members polled:
 Randy Weber (Congressional District 14); Roger Williams (Congressional
District 25);  Filemon Vela (Congressional District 34);  Greg Bonnen
(TX House 24);  and,  Bennett Ratliff (TX House 115).

Additionally, we have supported a number of incumbents who
are engaged in runoff elections:  Jeff Wentworth (TX Senate 25); Chuck
Hopson (TX House 11);  J.M. Lozano (TX House 43);  Sid Miller (TX
House 59);  and, Jim Landtroop (TX House 88).   Supreme Court
Justice David Medina also has the support of the IBAT PAC in his runoff for
Place 4. 

IBAT has endorsed and the IBAT FedPAC has contributed to Lt.
Governor David Dewhurst in his campaign for U.S. Senate.  The IBAT PAC
Committee at its meeting last week voted to provide additional financial
support for Governor Dewhurst.  We have enjoyed an excellent working
relationship with Mr. Dewhurst and his staff over the years. 

We strongly encourage you to vote in these
important elections, and encourage your circle of influence to do the
same.  Turnout will no doubt be low in this unique election cycle, which
makes your vote even more important.

NorthStar Bank of Texas


NORTHSTAR BANK OF TEXAS
Habitat for Humanity Project

July 6, 2012 - In mid-March, NORTHSTAR BANK OF TEXAS and Denton Bible Church partnered in a Habitat for Humanity Project in Denton, TX.  The three month construction project brought both organizations together with the intent of giving back to their community.

A house dedication took place on June 19th for the Nunez Family where volunteers, friends and families came together to see the finished project and to celebrate the completion.

Throughout the course of the project, NORTHSTAR BANK OF TEXAS and Denton Bible Church had close to 100 volunteers from each entity come together on Saturdays to swing hammers, sheetrock walls, paint, do landscaping, and all that goes into building a home.  Breakfast and lunch was provided on each Saturday's work schedule and much of it was donated by local businesses.

In addition, there were many construction professionals who donated their services as well.  Denton Bible found resources from Taylor Trim, Jeter 3 Company, Master Electrician Paul Strickland, Work Environmental, Elite Door and Trim, and Atlas Construction.  NORTHSTAR brought in professional help from Kent Key Construction, Quickset Concrete, CBS Mechanical, Dan's Painting and Gateway Concrete.  Habitat for Humanity has been blessed with the help of many businesses throughout the year; Woods & Floors, Whirlpool, Valspar Paint, Schneider Electric, Whitworth Engineering, K&K Landscape Services, Adam's Pest Control, Essex Woodworking, United Copper Industries, Sherwin Williams Paint, and Trinity Roofing.

Tony Clark stated at the house dedication that "this was such an awesome experience to participate in as we watched an empty lot become a family's dream home; working on this project was not only good for the community, it was a rewarding and fun experience for our employees."

As the largest community bank in Denton, and one of the largest in the Dallas / Ft. Worth area, NORTHSTAR continues to lead in the banking and mortgage industries.   Their professional staff and personalized style of banking have been the key ingredients to their success. 

Member FDIC and Equal Housing Lender

For more information please contact Michele Barber at 940-383-6211 or mbarber@nstarbank.com

Consumer Tips July 2012


"Pay
it off every month!"  That is what your
parents always told you when you first started using credit cards.  "Pay it off every month and you won't get bad
credit."  If your goal is to save money
on paying interest then this might be the ideal approach.  However, this won't keep you from getting bad
credit.  If your goal is to improve your
credit score then you may actually be hurting your credit rating by paying it
all off every month... Read more.

Fun Fact Friday


If you think you've been asked some bizarre questions at work, read on... Your IT department might win this one.

From the
category "the strangest or most unusual requests ever received":

  • "Can
    you come over and plug this cord in for me?"
  • "How
    do I remove a sesame seed from a keyboard?"
  • "How
    do I pirate software?"
  • "Can
    I turn on the coffee pot with my computer?"
  • "How
    do I clean cat hair out of my computer fan?"
  • "I
    dropped my phone in the toilet. What should I do?"

From the
category "lending a hand well outside one's job description":

  • "Can
    you recommend a good dry cleaner?"
  • "I
    can't find my packages online. Can you help me?"
  • "Can
    you help me repair a washing machine?"
  • "We
    need you to fix the microwave in the lunchroom."
  • "Can
    you help me fix my toilet?"
  • "Where
    can I find a video of Elvis Pressley online?"
  • "Can
    you help me fix my chair?"
  • "My
    car's cup holder is broken. Can you help me fix it?"
  • "Can
    you help us get money out of the vending machine?"

And lastly, from
the category of "Computer 101 questions":

  • "Will
    you show me how to use the mouse?"
  • "How
    do I send an email?"
  • "How
    do I start the Internet?"
  • "My
    computer won't turn on or off." (The computer wasn't plugged in.)
  • "How
    do I click on different files?"
  • "I'd
    like to download the entire Internet so I can take it with me."

Read the entire article on the CFO Daily News website.

CFPB Proposed Rule


On
June 28, 2012 IBAT filed a comment letter with the CFPB on the proposed rule
to Implement Ability to Repay Mortgage Standards. The letter reiterates points
made in similar comment letters filed in 2011 with the Federal Reserve. IBAT
continues to stress that the availability of credit in numerous communities is
adversely affected by the escrow requirements imposed on "higher-priced
mortgage loans" and any ambiguous "presumption of compliance"
with the ability to repay requirements will continue to erode the availability
of credit in those communities.

Innovation


As branches of the federal government wrestle with the
future of healthcare in America, others in the private sector are looking for
actual solutions to tackle burgeoning costs.  Yesterday, The Kempton Group
Administrators Inc., sister company of The Kempton Company (administrator of
the IBAT-endorsed Advantage
Health Plans Trust
), was
recognized
for doing just that.

The praise came for the company's Premier Provider
program, which identifies healthcare providers that offer transparent,
greatly-reduced, all-inclusive cash prices, often resulting in up to 70% cost
reduction for certain procedures.  Providers
allow Kempton's participants to access this pricing, because the benefit plans
are self-funded.   Reduced pricing, however, is not just a
benefit enjoyed by the self-funded benefit Plan, as
participants using a Premier Provider incur no out-of-pocket cost for
procedures.   As a result, claims are
paid at 100% and quickly.

"Most people don't realize that for many
procedures and treatments, there can be up to a 400% variance in cost between
providers of healthcare, regardless of the quality of that care," said Jay
Kempton, President & CEO of The Kempton Group Administrators. "Being
aware of these differences and consciously making better healthcare purchasing
decisions is one of the most important steps towards bending the cost
curve."

The Kempton Company's innovative solution was
recognized by the HCC
Life Insurance Company
, which highlights new trends and approaches employed
by insurance administrators to contain costs. 

Amber Alert

THIS IS A CHILD
ABDUCTION ALERT ISSUED BY THE TEXAS AMBER ALERT NETWORK

 

The SAN ANTONIO POLICE DEPARTMENT is searching for GABRIEL RIVERA, HISPANIC, MALE, 3 YEARS old, DOB 12/13/08, 3’0”, 34 LBS, BROWN HAIR, BROWN EYES. 

Police are
looking for ROBERT MEDRANO JR. AND MONICA SOTO IN HIS
abduction.

The suspects
are driving a GOLD, 2000, FORD, EXPLORER with a TX License Plate Number of 57R8454
The suspect was last heard from in SAN ANTONIO, TX

Law
enforcement officials believe this child to be in grave or immediate danger.

If you have
any information regarding this abduction, call the SAN
ANTONIO POLICE DEPARTMENT AT 210-207-7660.
  

Planning the Future


IBAT
leadership bankers from across the state gathered last week for two days of
Committee and Board meetings.  In addition to the normal reports and
discussions of IBAT activities, the Board approved the Convention Policy
Resolutions and recommendations for Bylaws amendments submitted by the Bylaws
and Nominating Committee.  These will be reviewed and voted on at the
Annual Meeting of the Membership at the IBAT Convention in October.

Rogers
Pope, Jr., President and Chief Operating Officer of Texas Bank & Trust,
Longview, was nominated as Secretary-Treasurer.  The remainder of the
proposed leadership of IBAT, to be voted on at the Annual Convention, includes
John W. Jay (Roscoe State Bank) as Vice Chairman;  Jay Gober (First State
Bank, Graham) as Chairman-Elect;  and Troy Robinson (Bank Texas, Quitman)
as Chairman.  Scott Heitkamp, the current Chairman of IBAT, will remain in
a leadership position as Immediate Past Chairman. Several new directors were
nominated as well, and will be announced when all have accepted.

The
Board also reviewed and approved the recommendations of the IBAT Legislative
Committee regarding our proactive agenda for the upcoming 83rd Texas
Legislature.  Additional information will be forthcoming, and we encourage
you to "save the date" - February 5 - for the IBAT Legislative Day in
Austin.

Baker Market Update


[Last]
week proved that the equatorial latitudes of the world's oceans are not the
only place in which summer doldrums exist. With the news-worthiest of events
taking place in other arenas, the U.S. Treasury market had little reason to
leave the lower, narrower trading range it has inhabited for the past several
weeks. After starting the week around 1.60%, the Benchmark Ten Year note
reached its low yield of the week (1.57%) [last Thursday], before [Friday]
morning's sell-off pushed that level up to around 1.65%.... Read more in the Baker Market Update.

Is your ATM a Lawsuit Risk?


You may have missed it last week.  Not long after it issued its opinion on
the Affordable Care Act, the Court announced its decision in First American
Financial v. Edwards,
the decision every banker had looked forward to as a
cure for the recent epidemic of EFTA "statutory damages" class actions.  
So, how did the court rule?  It didn't.  Rather than issuing a
decision the Supreme Court dismissed the case, effectively spitting the hook on
this important question.  And now, I have more bad news.  The same
lawyers who vigorously pursued the EFTA "class actions" for lack of a second
sign on your ATM have found a new non-compliance issue:  are your ATMs
accessible to the blind and persons with disabilities? 

These lawyers say "no" and already have started filing "class actions" seeking
injunctions and damages to enforce their position.  A check of Court
records shows that one set of firms has filed no less than ten such lawsuits in
federal courts for the Northern and Eastern District of Texas since June
13.  Experience teaches that these are the first of many such suits; it
also teaches that how our industry reacts to these first cases will have a
large impact on whether more are filed. 

The legal background for this new wave of suits comes from federal and state
statutes and regulations designed to remove architectural barriers for the
disabled.  These statutes generally track Title III of the Americans with
Disabilities Act [the "ADA"], which requires places of public accommodation, a
term defined in the ADA to include banks, to provide disabled customers with
reasonable and appropriate accommodations that enable them to partake of the
bank's services to the same extent as non-disabled customers because of their
disability.

To implement the ADA, the Department of Justice established advisory committee
to create accessibility guidelines that became known as the ADA Accessibility
Guidelines, usually referred to as ADAAG.  There are two comprehensive
sets of these ADAAG, one issued in 2004 and another issued in 2010.  The
2010 Standards, which incorporate the 2004 standards and include provisions
governing ATMs, became effective on March 15, 2012.  Under the ADAAGs, at
least one ATM at every location must meet the specific requirements in ADAAG;
the ADAAGs treat lobby ATMs and drive-up ATMs at the same facility as two
different locations; therefore, say the Plaintiffs, machines at both locations
must comply.  The issue will be particularly acute at drive-up ATMs, where
it is more difficult to provide a reasonable alternative service.

As with the EFTA cases, there are potential responses and defenses; they are
"potential" at this point because the 2010 ADAAGs have only been in effect
since March, and there is virtually no case law addressing where the main
statutory language meets the ADAAGs.  It also appears to be reasonably
probable that these cases probably will not proceed as "class actions,"
although that is relatively little solace for those who are affected:  an
injunction requiring the Bank to take action requires the same action
regardless of whether there are one or a million plaintiffs.

So what do you do?  Just as it was with the EFTA signage cases, the best
way to avoid a problem is to make sure your ATMs are compliant; if they provide
audible services for visually-impaired users, check the functionality from time
to time to make sure it works.  The response for many banks will be that
they have ordered new, compliant equipment but that the manufacturer has not
been able to deliver it yet because of high demand.  That's good as far as
it goes, but some judge will ask, "What are you doing in the meantime?" 
What are you doing in the meantime?

And if you're sued?  No one wants the publicity of being the "bad guy" in
a suit by a blind or disabled individual, but ADA and the companion Texas Act
include words like "reasonable" and "undue," which mean there are
defenses.  Those words are important but work best when you have taken
steps in advance to create accommodations for disabled customers.  It is
not improper or unreasonable to make a plaintiff prove their case and to show
that their injury is real rather than self-directed for profit.  Our work
with EFTA cases suggests it may be possible to resolve these claims early and
proactively.

The other issue is insurance.  Here, the fact that ADA does not provide a
remedy in damages may initially prompt insurers to deny coverage. 
Nonetheless, this is an issue that should be carefully considered.  To
ensure that coverage is not lost because of late notice, submit the claim
early; it may be possible to start a dialogue with the insurer that leads to
some support, just as occurred when IBAT members and IBAT Financial Services
worked with insurers to secure coverage for EFTA suits.

The Supreme Court's non-decision in First American and this new wave of
suits ultimately carry a simple, overarching message:  there aren't going
to be any "silver bullets" we can use to resolve these issues.  We will
have to roll up our sleeves, work on compliance, respond appropriately and
forcefully to litigation and work with our insurance professionals to resolve
risk management issues. 

Thomas B. Alleman is of Counsel, Cox Smith Matthews
Incorporated, 1201 Elm, Suite 3300, Dallas, Texas 75270.  Please direct
questions to the author at 214 698 7830 or talleman@coxsmith.com.  The
material discussed in this article is for general, educational purposes and
does not create an attorney-client relationship.

TAG Extension A Win-Win


If
unlimited FDIC protection for non-interest-bearing accounts is so good
for the biggest American banks, then why is the American Bankers
Association silent on the need for the program to be extended?

This is the question that came to my mind time and time again as I read "More Evidence TAG Helps Only the Big Banks" in American Banker
last week. The piece, written by Christopher Whalen, senior managing
director of Tangent Capital Partners, certainly made some interesting
points. Mr. Whalen supports his claim with the following arguments... Read more.

ICBA: Fine Points


This month 236 years ago, our Founding
Fathers set in motion our country's radically ingenious American experiment. No
other social or political revolution has done more to spread freedom,
opportunity and prosperity.

As our country continues its slow recovery
from the recent financial and economic debacle, we shouldn't lose sight of, or
forget to tell others about, how essential community banks are to sustaining America's
great economic promise. Jefferson, Madison, Hamilton and the other founders
understood that personal political freedom and individual economic liberty are
intertwined. Each helps ensure the other. That remains as true today as in
1776.

The
roots of our diversified community banking system-a dynamic system unmatched by
any other country's for its resiliency-extend back to our nation's earliest days.
By backing hard work, initiative and ingenuity, community banks remain the most
widely accessible gateways to the American economic dream. By their very missions and operational models, community banks most
efficiently and safely deploy our country's collective economic capital. Turning local
deposits into fertile funding for local small businesses and households,
community banks provide vital support to the backyard inventors and startup
entrepreneurs that fuel our nation's economy. Community banks are this nation's
primary small-business lenders, and small businesses generate more than 70
percent of all new jobs, often in new industries with bright futures.

True
freedom stems from having a viable chance to achieve one's own financial
goals, to control one's own economic destiny, to succeed based on one's own talent,
effort or ideas. Whether a dream involves a candle-making shop or a software
development firm, those opportunities remain the most accessible and alive at
community banks.

Today's sharp policy debates in Washington
and on this year's campaign trails reflect the decisions Americans face in
recalibrating the role of government in the aftermath of the Wall Street
financial crisis. In part because of your efforts and ICBA's, the dangers of
financial overconcentration and unstable too-big-to-fail institutions also
figure prominently in that debate. So, too, does the discussion of what is
appropriate and sensible regulation for community banks and small businesses.

America is listening. Most people recognize
that our country's economic recovery depends significantly on the ability of
small businesses to grow and create more jobs. As community bankers, your
firsthand work and experience as responsible stewards of our Main Street
economies have never been more relevant and important. Your views can influence
the direction and trajectory of our country's economic public policy as never
before.

Every
day community banks like yours-where direct accountability
still drives common-sense decisions-continue to fulfill America's founding
ideals of economic liberty and opportunity for all. Never forget that's what you
do, and what, together, we are working to pass along to future generations.

Happy
Independence Day!

Risk-Based Capital Rules


Last
week, the Independent Community Bankers of America (ICBA) posted a comprehensive summary of the new interagency
proposed rules on risk-based capital. The summary covers proposed capital
ratios and their phase-in schedule, prompt corrective action requirements and
asset risk weight requirements.

IBAT,
along with ICBA, is researching the various provisions proposed and is
preparing an official comment letter.   Further, we will be meeting
with senior regulatory officials in mid-July to discuss the community bank
concerns relative to the proposed rule, continuing our history of involvement
on this developing issue. 

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