TechMecca 2014 Recap

Approximately two hundred community bankers and eighty solution providers convened in Austin February 3-4 for IBAT's annual technology show - TechMecca.  

TechMecca 2014 took place against the backdrop of an improving economy in which community bankers are considering significant investments in technology to meet evolving customer demands.

At the same time, however, many banker attendees expressed concerns about walking the fine line between keeping up with the latest technology while maintaining the distinctly relational business model that distinguishes community banks from others.  

Attendees chose from twelve educational sessions offering banker perspectives and presentations from thought leaders in the areas of mobile banking, payments, marketing analytics, core technology platforms, cyber security and risk management.   

The show was capped off with seven-minute presentations from exhibiting companies, highlighting a product or service for attendees to consider for their bank.  Congratulations to PULSE and Dell Secureworks, who were voted "Best in Show" by attendees during TechMecca's interactive general sessions.

A full recap of TechMecca 2014 will be included in the March/April edition of The Texas Independent Banker magazine.

Five*Star Awards

IBAT associate members are invited to apply for the Five*Star Award between now and February 28, 2014.

Since 2002, IBAT has honored our associate members with the IBAT Five*Star Award, recognizing those companies that routinely provide not just excellent service, but innovative solutions that help community banks grow faster, enhance profits, gain efficiency and SHINE through:

  • Service excellence that provides community banks with the support they can depend upon;
  • Human relationships based upon trust, respect and strong working relationships;
  • Integrity that meets the high standards banks have a right to expect from their trusted suppliers;
  • Never-ending commitment to the success of the community banking industry; and
  • Exceptional value for the products and services provided.

Unlike past years, you do not need a banker nomination to be considered. Don't miss out on your opportunity to SHINE. View the Five*Star Award page on the IBAT website for full details and complete the application.

Baker Market Update: Feb. 7, 2014

What a week of blow-outs! Seattle blows out Denver in the Super Bowl. Arctic conditions blow out school for much of the nation, and this morning’s Unemployment Report blows out any hope that last month’s dismal report was just an unpleasant aberration that would be reversed by today’s revisions. The ennui that pervades the American labor market remains unimproved as we learned this morning from the Bureau of Labor Statistics. The .1% drop in the Unemployment Rate to 6.6% was cold comfort in light of the disappointing 113k increase in Non-Farm Payrolls (NFP). Market experts were expecting a jump of around 180k. Perhaps more disheartening was the absence of widely anticipated upward adjustments to the previous report. December’s dismal 74k NFP growth was recalculated to be... Read more in the Baker Market Update.

Breaking News

The Supreme Court of Texas denied the Texas Bankers Association's Motion for Rehearing (a motion IBAT supported with its amicus brief) in the case of The Finance Commission of Texas et al v. Valarie Norwood et al, in which several homeowners (backed by AARP, ACORN, and others) challenged some of the rules interpreting the Texas home equity constitutional provisions. In our opinion, without intending to do so, the Supreme Court's denial has effectively prohibited closing home equity loans using powers of attorney.  The Supreme Court's decision requires powers of attorney to be executed at the office of the lender, an attorney's office or at a title company. Because it will be difficult to prove the location where a power of attorney was executed, we believe most title companies will simply refuse to close home equity loans with powers of attorneys.

Additionally, the Court's supplemental opinion makes it clear that neither prepaid, per diem interest nor legitimate discount points are subject to the 3% cap.  

The Supreme Court issuance is entitled a Supplemental Opinion on Motion for Rehearing. It is very short. If your bank makes home equity loans, your compliance officer and residential lenders should read it. The current status of home equity lending will be discussed by Karen Neeley at IBAT's Lending Compliance Summit on April 17-18, 2014.

S. 1926 Update

A move to delay potentially catastrophic rate increases for flood insurance is finally gaining traction, clearing the United States Senate last week.  

S. 1926, introduced by Senators Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.) would delay rate increases for up to four years by giving the Federal Emergency Management Agency (FEMA) time to develop a plan to help property owners who cannot afford higher premiums.  It now goes to the House of Representatives for consideration.  

Hanging over the entire proceeding are ominous statements released by the White House Office of Management and Budget last week, which expressed concerns that the bill will would “further erode the financial position” of the National Flood Insurance Program and reduce FEMA’s ability to pay future claims.  Further, it is rumored that House Republicans are also working on an alternative plan and might not progress the House companion to S. 1926.

IBAT will continue to monitor House action on this measure and will likely ask community bankers to call upon members of Congress in the near future.

Baker Market Update: Jan. 31, 2014

This sure feels like one of those weeks in which things just haven’t “felt” right. If one asked the folks in the Deep South, they would probably agree that dealing with paralyzing snow and ice hasn’t felt right. Even the taciturn members of the FOMC might admit that seeing Mr. Bernanke at the head of the big, shiny table for the last time feels a little funny (not ha-ha funny). Something else that’s funny about this week, in fact this whole month, is that bonds are up and stocks are down. Now wait a minute; with news this week that Q4 GDP was probably up by 3.2% (on the heels of Q3 4.1%) and the Central Bank feeling good enough about macro-economic prospects to cut another $10B from monthly asset purchases, shouldn’t that be the other way around? And shouldn’t it be snowing in Fargo rather than Birmingham?

Read more in the Baker Market Update.

Qualified Mortgage Rules

As Consumer Financial Protection Bureau (CFPB) chief Richard Cordray appeared before the House Financial Services Committee last week, the bureau’s Qualified Mortgage rules were front and center in the conversation. In opening statements before the committee, Chairman Jeb Hensarling was quick to express concerns about the rules, citing comments made in IBAT’s recent mortgage rules survey by several bankers exiting the mortgage business .  

Congresswoman Shelly Moore Capito spoke out on the effects of the rules on low to moderate income borrowers and banks’ limited ability to determine creditworthiness of those customers.  Cordray vehemently disagreed with the characterization of the rules as limiting banker discretion, maintaining that the small creditor exemption allows community banks to continue their traditional lending practices.  

“We are an open-minded agency. We are listeners,” Cordray said when pressed on future changes to the QM rules as additional data becomes available.  

The full video of the hearing is available online.  The House FS committee also announced last week the creation of a website in which business owners can share their stories of the ways in which the CFPB has positively or negatively affected their business or customers.  That “Tell Your Story” site can be found here. IBAT members are encouraged to share their own stories and the effect that CFPB action is having on their customers.

Pressure On for Rule Changes

In late fall of 2013, the Financial Accounting Standards Board (FASB) sent shockwaves through the industry by proposing a complex and detailed new credit model for all banks in calculating the Allowance for Loan and Lease Losses (ALLL). FASB has proposed that all financial institutions abandon the current historical loss model in lieu of an "expected" loss model.

Since that time, industry trade associations including IBAT and ICBA have suggested a less complex model.  The ICBA and IBAT approach would exempt institutions below $10 billion in total consolidated assets from adopting the expected loss model outright.  Instead, these institutions would employ alternative methods that encourage simplicity to assess the adequacy of their loan loss reserves; one that would recognize credit losses based exclusively on a bank's historical loss experience for similar assets over a pre-defined loss emergence period.  This approach is superior to the model proposed by FASB because it is simple to understand, implement, manage, audit and examine while satisfying the accounting board's goal of building higher reserves to better protect against adverse economic conditions.

Deliberations are likely to wrap up soon with a final guidance being released later in 2014. A full update on this issue, as well as other accounting matters of concern to IBAT members, will be included in the March/April edition of The Texas Independent Banker magazine.

IBAT Regional Meetings

IBAT's 2014 Tour de Texas Regional Meetings get underway this week with meetings in Graham, Fort Worth, Amarillo, Lubbock, El Paso, San Angelo, Waco and San Antonio.  IBAT Chairman Jay Gober (First State Bank - Graham) will be joined by Commissioner Charles Cooper of the Texas Department of Banking and IBAT President & CEO Chris Williston to discuss the year ahead and the ongoing push towards regulatory reform.  More than 750 bankers are registered to attend this week's meetings.

"The IBAT Regional Meeting tour is one of the true highlights on the IBAT calendar each year," Williston said. "As much as we love to see bankers at various IBAT events throughout the year, there's really nothing better than being out around the state."

Round 2 of the regional meetings will be held in mid-March, with stops in Galveston, Schulenberg, Harlingen, Corpus Christi, Houston, Kilgore, Sulphur Springs and Dallas.  To learn more or to register for Round 2, click here

Week in Review: January 24, 2014

To the dismay of many Americans, we find ourselves dependent upon China for many things. From keeping the shelves of Wal-Mart fully stocked to making sure someone shows up for Treasury auctions, China has become an inveterate influence in American life. And, with this week’s dearth of domestic financial news, it was a headline out of China that caused the biggest ripples in U.S. (and non-U.S.) credit and equity markets. It seems that China’s Purchasing Managers’ Index (PMI) fell to a level that is indicative of a contracting manufacturing sector. The global implications for slowdowns in the world’s second largest economy are not positive... Read more in the Baker Market Update.