TAG Expiration

The FDIC issued a Financial Institution Letter (FIL-45-2012) entitled Notice of Expiration: Temporary Unlimited Coverage for Noninterest-Bearing Transaction Accounts on November 5, 2012.  The TAG program was designed to prevent excessive withdrawals and thus protect banks that did not fit the "too big to fail" model during the financial crisis.  The program provided unlimited deposit insurance to noninterest bearing transaction accounts (NIBTAs) while leaving coverage for other deposits held by the same person in the same ownership category at $250,000 in the aggregate.

After being extended three times, the TAG program will expire effective January 1, 2013 without Congressional action to extend the program.  ICBA, IBAT and other groups are working hard to extend this program, but there are no guarantees at this juncture. 

Without the program, non-interest-bearing transaction account balances held by the same person in the same ownership category will be aggregated with any other deposits and insured up to the standard maximum deposit insurance amount of $250,000.

In the FIL, the FDIC strongly encouraged banks to provide notice to NIBTA depositors of the expiration of unlimited deposit insurance.  Model language for both a separate written notice and a shorter notice for account statements was provided by the FDIC.  IBAT General Counsel Karen Neeley recommends banks use the model language for providing notice to noninterest bearing transaction accountholders impacted by the change.

Other action steps that should be taken include:

  • Remove the "Notice of Changes in Temporary FDIC Insurance Coverage for Transaction Accounts" signage on December 31, 2012;
  • Review deposit account agreements and new account packages for information about the TAG program and ensure the information accurately reflects the change in coverage as of January 1, 2013 (remove any reference to the TAG program);
  • Stress test the loss of TAG funds based upon several scenarios.  You will want to document the impact and how you will manage the potential outflows;
  • Encourage depositors who may be affected to contact their bank officer as soon as possible to explore ways to maximize insurance coverage.  Even better - proactively contact those customers who may be affected by this change.  Don't forget about using the FDIC's Electronic Deposit Insurance Estimator (EDIE) to help depositors understand levels of coverage; and
  • Use this event as an opportunity to train your staff and educate your depositors on the basics of FDIC Insurance.  There is a Deposit Insurance FAQ on the FDIC web site that provides very helpful information.

Happy Thanksgiving!

Despite the many challenges we face as an
industry and as a nation, we pause to give thanks this week for our many
blessings this Holiday Season... blessings of family, friends, country and
community, and the freedoms afforded to us by so many who serve or have served.

We give special thanks for the opportunity to work in such a good and honorable
profession; an industry that has withstood the test of time for over 200 years
and provides local communities and families with resources to enhance quality
of life and keep the hope and spirits of millions of citizens alive.

Your IBAT family of dedicated volunteers and staff thank you for your continued
support and wish you and yours a Happy Thanksgiving!

that our offices will be closed from 12:00p.m. on Wednesday, November 21
until 8:00a.m. on Monday, November 26.

Capitol Comments

November 2012 edition of Capitol Comments is now
available on the IBAT website.

in this issue include:

  • Agencies
    delay regulatory capital rulemakings;
  • FDIC:
    TAG is done on December 31;
  • CFPB
    gives additional time for banks to provide certain new disclosures;
  • Video:
    CFPB Consumer Advisory Board meeting;
  • OCC
    guidance on stress tests of banks larger than $10 billion;
  • FDIC
    revised standards or creditworthiness for investment securities;
  • CFPB
    partners with companies who are "alternatives to traditional
  • OCC
    adjusting civil money penalties;
  • FHFA
    and CFPB develop National Mortgage Database;
    guidance for supervising technology service providers;
  • CFPB
    now accepting credit reporting complaints;
  • FinCEN
    advisory on filing SARs on Payment Processors;
  • OCC:
    Community bank stress testing;
  • CFPB:
    MLO's must provide details on disciplinary actions and convictions;
  • FFIEC:
    Impact of drought conditions on financial institutions;
  • CFPB:
    Annual report on student loans;
  • Paper
    check processing moves to Atlanta on December 31, 2012;
  • Fed
    Governor Elizabeth Duke speaks about community banks;
  • CFPB
    report on servicemembers' student loan debt;
  • Fed's
    2013 fee schedule;
  • Comptroller
    Curry speaks on risk management;
  • CFPB
    issues Supervisory Highlights: Fall 2012; and
  • CFPB
    proposes easier way for non-working spouse to get credit cards.

Amber Alert









Kids' Christmas Card Contest

IBAT invites your children and
grandchildren to join in the holiday spirit by submitting an original color
drawing for the 2nd Annual IBAT Children's Christmas Card contest. The three
winning entries will receive a $250
gift card

year's contest theme is Holiday
Time in Texas
. Each young artist whose artwork is selected will
be featured on three card designs that we will send to our IBAT family and
friends this holiday season.

Click here for full entry rules.

Membership News

PARK, Texas, November 6, 2012 -
Innovation. Imagination. Integration. IBT,
a leading innovator of best of breed solutions of cost effective, enterprise
wide technology for financial institutions, today announced
that Roscoe State Bank
has selected to incorporate additional services into an already expansive
relationship with IBT.                                                        

Roscoe is utilizing IBT's comprehensive suite of products that includes Core
processing, Image Teller, and a host of other products within IBT's robust
suite. Roscoe State Bank extensively researched other organizations for over a
year before decidedly signing with IBT and adding new integrated channel
services such as internet banking with real-time alerts and bill pay.

began our relationship with IBT in 2009 after they acquired the core and
WinTeller division from Goldleaf and quickly began to expand from there. IBT,
just like our Bank, is growing as a company and is always looking for ways to
improve. They've done a great job with expanding their product line delivering
a state of the art integrated technology platform for the bank," stated Jared
Monday, Assistant VP & IT Officer.

decision point finally came down to the fact that, as a customer focused bank,
we felt more comfortable with an innovative organization where we can call the
owner on his cell phone to discuss and resolve any issue. For us, IBT's
willingness to expand and move quickly to improve their products helps us keep
up with the market's technology demands. We spent almost two years analyzing
options and we have never regretted our decision to choose IBT," said Mark Sheffield, Executive Vice President.

excellence and personal relationships with our customers is at the heart of
what we refer to as the IBT Difference." said President Mike Golebiowski,

About Roscoe State Bank

For over a century, the Roscoe State
Bank has remained an independently owned community bank providing the highest
level of customer service.  Founded in 1906 in Roscoe, Texas, they have
enjoyed significant growth driven by their unique culture and marketing
strategy as evidenced by an average ANNUAL growth rate of over 15% since 2004.
They believe in convenience banking and working harder than the competition.

For more information, visit: www.roscoestatebank.com


in Cedar Park, Texas, IBT specializes in providing complete enterprise
automation for financial institutions with products such as core processing,
Check 21 proof automation, mobile banking, internet banking, document imaging
and Personal Financial Management applications complete with 24/7 support
services. The company focus is to push the innovation envelope to improve
process and deliver reliable real time information across all delivery
channels. The IBT suite of products delivers robust functionality and
flexibility with product creation making the cost of ownership affordable while
dramatically improving customer experience.

Discover "The IBT
Privately Held, Personal
Relationships and Total Commitment to our customers.

more information, visit www.IBTapps.com


American Express and Walmart recently announced the nationwide launch of the Bluebird prepaid debit card. The Bluebird card touts itself as "Your Checking & Debit Alternative" and make no mistake this product is targeting your customers!

The Bluebird costs $5 and can be purchased at any Walmart. It has no monthly maintenance fee, has no fee for online purchases and there is no cash reload fee if done at any Walmart. There is a $2 fee for using an American Express MoneyPass Network ATM that's waived if the cardholder signs up for direct deposit.

One of the most important aspects of this card is the fact that funds loaded are NOT FDIC insured. Users of the card are relying on the faith and stability of American Express to have their money when they need it. That's very important to stress - especially to those customers who are motivated by the security of FDIC insurance.

Another important fact to stress is that in the Bluebird FAQs it states that money transferred to the card from a bank  "...will generally be available within 5 business days." For most account holders even 1 or 2 days is a significant delay in funds availability.

For this or any other product you want to compete with, it's critical you understand the fine print.

New products are going to come and go and the Bluebird is no different.  Use this challenge as an opportunity to review your bank's fees and charges and see how your debit card program stacks up! A little reading will give you an understanding of your bank's features and benefits and help you fight back.

Can you sell your own programs' features and benefits?

Make sure your staff understands the features and benefits of both your debit card program (and your prepaid card program if you offer that product as well) and those of the Bluebird. Stress the fact that funds you hold in an account are FDIC-insured. Also stress that funds deposited at your bank are generally available the next business day and accessible on a branded debit card at that time.

Use this or any other product challenge to build on the relationships you already have and to develop new opportunities. The best defense is a good offense.

For more information please contact Kelly Goulart at kgoulart@ibat.org or 512-275-2231

Silver Alerts

Shreveport, Fort Worth


The Tyler Police Department is searching for Hazel Louisa Bryan, diagnosed with Dementia, white, female, 83 years old, DOB 3/30/1929, 5’ 5”, 93 lbs, gray/brown Hair, hazel Eyes, wearing glasses, maroon shirt, black pants, gray fleece jacket and medic alert bracelet.
The senior citizen was last seen at 10:15 am, 11/15/12 at 3430 Iberville, Tyler, TX, on foot.

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 Tyler Police Department at 903-531-1000.

News Media Point of Contact is Tyler Police Department at 903-521-1744.

Glimmers of Hope

Last week
brought two separate "glimmers of hope" to the community banking
industry.  First, a joint statement issued by the Fed, FDIC and OCC
delayed the implementation of the Basel III capital proposal, originally
scheduled to take effect January 1, 2013.  No timeframe was provided.

conversations with senior regulatory officials and ongoing media commentary
over the past months indicate that the agencies are seriously considering over
2000 comment letters, many from community banks, critical of the proposal.
 Further, the Senate Banking Committee is holding an oversight hearing on
the Basel proposal today, with the House Financial Services Committee planning
a similar hearing later this month.  

We are
obviously pleased that efforts by the industry have had an impact, and
appreciate all of you who have weighed in on this unacceptable proposal.

Federal Reserve Board Governor Elizabeth Duke called for two-tiered regulation
of mortgage lending in a speech last Friday in Chicago.  IBAT and
others have been sounding the alarm regarding Congressional and regulatory
overreaction to the mortgage crisis, and the deleterious impact on traditional
"in-portfolio" mortgage lending by community banks.

specifically mentioned limitations on balloon notes and escrow requirements as
"understandable" restrictions on sub prime mortgage originators that
have negatively impacted community banks, who "should not be penalized for
others' abuses."

appreciates and applauds Governor Duke for her common sense approach to this
serious issue, and we are hopeful that this is a significant first step toward
a true bifurcated regulatory approach in the banking industry.  

First American Payment Systems

IBAT is proud to announce the endorsement of Fort Worth-based First American Payment Systems (First American). First American is a merchant services provider that offers competitive transaction processing rates and supports the latest point-of-sale equipment, software and VARs on networks that process billions of dollars in transactions each year for more than 140,000 merchants nationwide.

"There are numerous companies that offer merchant services," Chris Williston, president and chief executive officer of IBAT, said. "IBAT was looking for the right fit for Texas community banks, a provider that not only focuses on exemplary customer service and security, but also offers strong marketing resources and support. First American exceeded our expectations all around."

First American is one of the few processors to own and operate all of its core products and services, which include credit, debit, EBT, ACH, gift card and check processing, and remote deposit capture. Additionally, First American's FirstView® online reporting tool offers merchants real-time secure access to a detailed account of their processing activity, down to the transaction.

"Texas community banks use a people-based business model, and IBAT is endorsing First American because we believe it shares the same values as IBAT member banks," Curt Nelson, president of IBAT Services, said.

Be on the lookout over the next several days for an informational webinar in early December about IBAT's newest endorsed service provider and how you can deepen your relationship with your merchant customers.  

Post Election Forecast


Following billions of dollars in campaign spending, the American political landscape looks largely the same after last Tuesday’s elections.  Defying most of the political analysts, President Obama won re-election, in part, by winning every "battleground state" except North Carolina (and he lost there by less than 100,000 votes).  But the Republicans retain control of the House of Representatives- albeit a slightly narrower majority- and Democrats retain control of the Senate, having gained one Senate seat and one Independent seat (Angus King of Maine, who is expected to caucus with the Democrats).  There are a handful of House seats that are still too close to call.  Despite these small shifts, the power dynamic in Congress remains essentially status quo. The more things change, the more they stay the same.

One of the conclusions that can be drawn is that voters do not want widespread changes; they just want results.  Congress and the President return to Washington in November with a message to work together to seriously consider issues dealing with the economy and jobs.  Exactly what can be accomplished during this Lame Duck session of Congress is now the subject of great speculation, but one thing is clear – unless agreements are reached prior to the end of 2012, the “Fiscal Cliff” that looms could severely cripple any chance for economic recovery.

Lame-Duck Session

Congress returns on November 13th to a crowded to-do list.   Among those issues that must be dealt with ahead of the holiday recess is the Fiscal Cliff, which refers to the pending impact of mandatory government cuts through sequestration and the expiration of the “Bush Tax Cuts”.  The impact of these dual policies will be the biggest- and perhaps the only- issue that the Lame Duck Congress considers.
Other issues, including the Farm Bill, the Defense Authorization bill, even consideration of Hurricane Sandy Supplemental Relief legislation will take a back seat to resolution of the "Fiscal Cliff."

Sequestration is the result of the Budget Control Act of 2011 that raised the debt ceiling and mandated cuts in spending equal to 1.2 trillion over ten years.  While some programs and entitlements are spared, most agencies will see across-the-board cuts to their programs equal to 8.2%.  However, 50% of the program cuts would come from the Defense budget, a possibility that both sides of the aisle want to avoid.  These spending cuts, especially in defense, would have a deleterious impact on a number of industries with concentrations of government contracts. The other 50% of cuts would come from non-defense discretionary spending, and although Medicaid and some other vital programs aimed at low-income Americans are spared, many anti-poverty programs are not immune and would be dramatically impacted by the sequester.

Bush Era Tax Cuts
The other element of the Fiscal Cliff is the package of tax provisions that are set to expire on December 31st or have already expired. These include the Bush Tax Cuts of 2001 and 2003, the 2% payroll tax cut, the AMT patch, tax cuts expanding EITC and new education credits included in the stimulus package, and a group of mostly small business and energy tax provisions known collectively as the “tax extenders”. Should all of the tax provisions be allowed to expire, federal tax collections will increase by more than 20% in 2013 (a potential $2,000 tax increase on average for middle-income earners), leading to a contraction in gross domestic product and a creating a challenge for continued economic recovery.

Gridlock or Compromise?
Both parties in the Congress and President Obama have signaled their determination to avoid both sequestration and the fiscal cliff- with caveats.  While the President has stated that he will veto any legislation that extends the Bush era tax cuts to top earners, he also declared in one of the presidential debates that the sequester would not go into effect, somewhat reducing his leverage in negotiating by taking the threat of the sequester off the table.  The President reiterated his views in a press conference on November 9th regarding his priorities for the lame duck session of Congress.

While some members seem publicly optimistic about a “grand bargain” being worked out in the lame duck session, expectations that Congress will pass some smaller piece of legislation to get through the next three or six months, dominate.  While no one really knows what the term and scope of a Lame Duck session will mean, the fact that this Congress is one of the least productive in American history would argue for reduced expectations.  It would not surprise many analysts if Congress were to delay the impact of the Fiscal Cliff by passing extenders on both sequestration and the sunset date of the tax cuts.  However, we anticipate that some agreements would need to be achieved to attain that outcome, including a possible AMT patch, payroll reduction extension, and physician Medicare reimbursement solution in the Lame Duck.  An additional factor is the reality that the debt ceiling limits will need to be addressed in the 1st Quarter of 2013, the same dynamic that created the sequestration policy in 2011.

Another possible scenario for the Lame Duck could be the consideration of a number of “must-pass” bills while Congressional negotiators hammer out the framework of a grand bargain that would be enacted early in 2013.  It could be expected that among the bills that would be considered in this environment would be the Farm Bill, the Defense Authorization Bill, a Cyber Security Bill and the FEMA Supplemental legislation.

House Committees

While Republican leadership positions are expected to remain the same, there will be a significant movement taking place in House committees.  As a result of term limits, senior Republican members will be shifting chairman positions.  Congressman Paul Ryan is likely the only Chairman who will be granted a waiver to continue on in his role as Budget Committee Chairman for the next two years.

Committee Chairs Expected to Remain the Same:

  • Agriculture: Frank Lucas (R-OK)
  • Appropriations: Harold Rogers (R-KY)
  • Armed Services: Buck McKeon (R-CA)
  • Education & the Workforce: John Kline (R-MN)
  • Energy & Commerce: Fred Upton (R-MI)
  • Oversight & Government Reform: Darrell Issa (R-CA)
  • Veterans’ Affairs: Jeff Miller (R-FL)
  • Ways & Means: Rep. Dave Camp (R-MI)

Committee Chairs that will Change:

  • Budget: Rep. Paul Ryan is termed-out, but is likely to seek and receive a waiver to keep his post chairing this committee.  If Ryan is not granted the waiver, Rep. Scott Garrett (R-NJ) is most senior behind him, but may have competition from Tom Price (R-GA) and RSC Chairman Jim Jordan (R-OH).
  • Financial Services: Current Chairman Spencer Bachus (R-AL) is termed-out and his likely successor is Rep. Jeb Hensarling (R-TX) who, although not the most senior on the committee, is a high profile, rising star in the Republican Party.
  • Foreign Affairs: Also termed-out is Foreign Affairs Chairwoman Ileana Ros-Lehtinen (R-FL). She has endorsed Rep. Ed Royce (R-CA), but he is likely to be challenged by another subcommittee Chairman, Rep. Chris Smith (R-NJ).
  • Homeland Security: Rep. Candice Miller (R-MI), Rep. Mike Rogers (R-AL), and Rep. Michael McCaul (R-TX) are all vying for the top spot to replace term-limited Rep. Steve King (R-IA).  Rep. Miller is thought to have the inside track.
  • Judiciary: Rep. Bob Goodlatte (R-VA) is the front-runner to replace termed-out Rep. Lamar Smith (R-TX).
  • Natural Resources: Current Committee Chairman Doc Hastings is hoping to assume the Chairmanship of the House Rules Committee from retiring current Chairman David Dreier. If he is successful, Rep. Rob Bishop (R-UT) is a likely successor for the top post at Natural Resources.
  • Rules: Rep. Pete Sessions is vying for the position at the top of the Rules Committee, but will be challenged by Rep. Doc Hastings (R-WA).
  • Science and Technology: Current Chairman Rep. Ralph Hall (R-TX) is term-limited and two potential candidates for the post are Rep. James Sensenbrenner (R-WI) and Rep. Lamar Smith (R-TX).
  • Transportation: Rep. Bill Shuster (R-PA) is the all-but-certain candidate to replace term-limited John Mica atop the Transportation & Infrastructure Committee.

Senate Committees

As a result of Democrats retaining the majority in the Senate, leadership positions are anticipated to stay the same. Some shuffling will occur at the top of several committees because of retirements.

Committee Chairs Expected to Stay the Same:

  • Agriculture, Nutrition and Forestry: Debbie Stabenow (D-NI)
  • Appropriations: Daniel Inouye (D-HI)
  • Armed Services: Carl Levin (D-MI)
  • Banking, Housing and Urban Affairs: Tim Johnson (D-SD)
  • Commerce, Science and Transportation: Jay Rockefeller (D-WV)
  • Environment and Public Works: Barbara Boxer (D-CA)
  • Finance: Max Baucus (D-MT)
  • Health, Education, Labor, and Pensions: Tom Harkin (D-IA)
  • Judiciary: Patrick Leahy (D-VT)
  • Rules: Chuck Schumer (D-NY)
  • Small Business and Entrepreneurship: Mary Landrieu (D-LA)

Committee Chairs that will Change:

  • Budget: Patty Murray (D-WA) is next in line to assume the chairmanship from retiring Kent Conrad (D-ND).  Murray is currently the chair of the Veterans’ Affairs Committee, a position she sought and a policy area about which she is passionate. There is some speculation she may try to hold on to that position, but we believe she will assume the chairmanship of the Budget Committee.
  • Energy & Natural Resources: Ron Wyden (D-OR) is in line to succeed retiring Chairman Jeff Bingaman (D-NM).
  • Foreign Relations: Senator John Kerry, who is considered the potential successor for Hillary Clinton as Secretary of State, currently chairs the committee.  Should the chairmanship be vacated, New Jersey Senator Bob Menendez is most senior on the Committee.
  • Homeland Security and Governmental Affairs: Retiring Senator Joe Lieberman clears the path for Tom Carper (D-DE).
  • Veterans’ Affairs:  Should Murray become Chair of the Budget Committee, Senators Bernie Sanders (I-VT) and Sherrod Brown (D-OH) are possible contenders for the position at the top of the VA Committee.  While Sanders has slightly more seniority, the policy area is closer to Brown’s priorities.
  • Indian Affairs: With the retirement of Senator Daniel Akaka (D-HI), Maria Cantwell (D-WA) is next in line for the chairmanship, having been passed over two years ago.  However, Jon Tester (D-MT) may also be a contender, coming from a state where Native Americans comprise more than 6% of the population.

Cabinet Changes

It is pro forma after every election- regardless of whether the incumbent survives or not- for the members of the President’s cabinet to submit letters of resignation, allowing the President to accept the resignation or to ask the Secretary to stay on.  There are major changes expected in the cabinet for President Obama’s second term. Our thoughts on who might be leaving and their likely successors are outlined below.

Secretary of State:
It is widely known that Sec. of State Hilary Clinton would not stay on for an Obama second term. Wide speculation puts Senator John Kerry as the top prospect to assume the post.  This would create a vacancy in the Senate and the need for a special election in Massachusetts or Governor appointment of a Senator.  Recently defeated Senator Scott Brown (R-MA) would have a good chance of success in a special election. Because of that possible dynamic, outgoing Senator Richard Lugar of Indiana has been mentioned as a possible successor.  Also on the short list: U.N. Ambassador Susan Rice and National Security Advisor Tom Donilon.

Secretary of the Treasury:
Current Secretary Tim Geithner has said that he would step down after Obama’s current term. Erskine Bowles- former Clinton Chief of Staff and co-chair of the deficit reduction panel- has been floated as a top contender.  Jacob Lew, current White House Chief of Staff and former Director of the Office of Management and Budget is also considered a top contender.

Secretary of Defense:
Leon Panetta has signaled his desire to retire and leave his post as Secretary of Defense. Possible top contenders for the cabinet position include former Defense Undersecretary Michele Flournoy and Ashton Carter, current Deputy Defense Secretary. 

Secretary of Transportation:
Ray LaHood has not ruled out another term as Secretary of Transportation, but has not indicated a desire to stay in his current post.  Should LaHood step down, Los Angeles Mayor Antonio Villaraigosa is seen as the front-runner, but other top contenders could be former Pennsylvania Governor Ed Rendell and Rep. Steve LaTourette (R-OH).

Secretary of Energy:
Current Secretary Steven Chu has indicated a desire to step down, but given the difficulty the President may face in Senate confirmation of a new nominee, he may be encouraged to stay on. Possible contenders for the post, should Chu resign, are former Senator Byron Dorgan (D-ND), and Dan Reicher, Clinton’s Assistant Secretary of Energy Efficiency and Renewable Energy.

Office of the Attorney General:
Attorney General Eric Holder is likely on his way out, clearing the way for his likely successor, current Secretary of Homeland Security Janet Napolitano. The list of potential successors for Secretary Napolitano at Homeland Security is too broad for even speculation.
Secretary of Commerce:

President Obama hasn’t had a commerce secretary since June, when John Bryson was involved in a car crash.  A number of administration officials might be interested in the post, including Ron Kirk, President Obama’s U.S. trade representative since early 2009; Fred Hochberg, president of the Export-Import Bank; and Karen Mills, the administrator of the Small Business Administration, a post that President Obama elevated to Cabinet-level status earlier this year.