IBAT News

Insuring the Texas Coast


Just as progress is being made at the federal level to address dramatically increasing flood insurance premiums, IBAT has entered into the debate of how to deal with insuring against catastrophic losses from wind damage, especially along the Texas coast. In a letter written in response to a recently-proposed informal rule to address the funding of the Texas Windstorm Insurance Association (TWIA), IBAT President and CEO Chris Williston expressed a number of concerns that community bankers share regarding the future of property casualty coverage in Texas's coastal counties.  

"The economic viability of the Texas Coast is important to all Texans," Williston said. "A stable and affordable insurance market is critical to provide not only continued economic activity in this region, but also to ensure an efficient conduit for consumer and industrial products coming through our ports, as well as petrochemical products we all use and rely upon."

In his letter, Williston referenced efforts in Congress to fix the fallout of the Biggert-Waters Flood Insurance Reform Act, which has resulted in unprecedented rate increases and many concerns for coastal lenders. A bipartisan coalition of lawmakers in the House and Senate emerged last week with a deal to delay those increases. The fix, known as the Homeowner Flood Insurance Affordability Act, would delay the increases for four years, allowing the Federal Emergency Management Agency (FEMA) enough time to develop an affordability framework for flood insurance.

We will continue our involvement in this important area, and will provide additional information as becomes it available. 

Silver Alert 11.4.13


AFFECTED TEXAS COUNTIES AND/OR NWS REGIONS: 

NWS: NORMAN, FORT WORTH, SHREVEPORT, HOUSTON, AUSTIN/SAN ANTONIO, SAN ANGELO

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

THE RED OAK POLICE DEPARTMENT IS SEARCHING FOR ROBERT RAYMOND GIBSON, DIAGNOSED WITH A COGNITIVE IMPAIRMENT, BLACK, MALE, 74 YEARS OLD, DOB 02/21/1939, HEIGHT 5’ 7”, WEIGHT 168 LBS, BLACK/GREY HAIR, BROWN EYES, LAST SEEN WEARING A TURTLENECK, JEANS AND WHITE SHOES. THE SENIOR CITIZEN WAS LAST SEEN AT 1000, 11/01/2013 IN THE CITY OF RED OAK, DRIVING A WHITE, 2005 CHEVROLET TRAILBLAZER WITH TX LICENSE PLATE DH7G899.

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 IS RED OAK POLICE DEPARTMENT AT 972-617-7632.

NEWS MEDIA POINT OF CONTACT IS RED OAK POLICE DEPARTMENT AT 972-617-7632.

A Truly American Banking System


In remarks delivered at the Ninth Annual Community Bankers Symposium hosted by the Federal Reserve Bank of Chicago last week, CSBS President and CEO John Ryan spoke passionately and convincingly about the important role of community banks in the American economy and what must be done to ensure their survival.  

Ryan described the U.S. financial system as a "truly American system... [that] reflects core American values, such as checks and balances, dispersion of power, and a balance of national interests with local control."

"If we want a more sustainable banking system that promotes real economic growth, we may need to spend a little less time worrying about the ability of U.S. banks to compete with European banks, and a little more time focused on how to empower local banks to serve their customers," he said.

Further, Ryan praised regulators' recent efforts to better understand community banks, and urged them to preserve the small bank role in the American economy. "I challenge us regulators to ensure that regulation is not the reason that a $35 million bank sells or self-liquidates.  If we can't differentiate between business models, if we must accept centralized, complex and intrusive regulation as necessary for all to respond to the risks posed by the largest banks, then I believe we need to go back to the drawing board."

In sum, Ryan said, "Community bankers... base their business decision on data and analysis combined with a healthy dose of judgment.  Policymakers and regulators should do the same."

IBAT President and CEO Chris Williston praised Ryan's comments. "John Ryan's comments are in lock step with IBAT's continued advocacy for a two tiered regulatory system; a system that recognizes that community financial institution business models are different and should be regulated accordingly."

Week in Review: November 1, 2013


If these were normal times, whatever those might be, the first Friday of every month would mean the ritualistic dissection of the latest unemployment report from the BLS. Well, these are not normal times and the recent partial shutdown of some governmental functions is still causing delays with the gathering and reporting of much economic data. Thus, the Jobs Report autopsy is postponed until next Friday. In the meantime, we'll have to be content with dissecting how the Red Sox beat the Cardinals.

While confidence might have been soaring for baseball fans in Boston, we learned from the Conference Board on Tuesday that the same cannot be said for the rest of us. That entity's measure of Consumer Confidence plunged to 71.2 from last month’s upwardly revised level of 80.2... Read more in the Baker Market Update.

Happy 100th Anniversary!


IBAT would like to congratulate The First State Bank in Columbus for celebrating 100 years of community banking this year! IBAT’s Curt Nelson attended the celebration on October 29th and presented the bank with a resolution on behalf of the IBAT Board of Directors.  The bank takes pride in “remaining a people-to-people bank with the safety of our depositors & funds our first priority.” Visit the First State’s Bank website to learn more about this True Texas Community Bank!

QM Guidance


In response to lender concerns that making non-Qualified Mortgages would open them up to liability under the disparate impact doctrine of the Equal Credit Opportunity Act and Regulation B, regulatory agencies (CFPB, OCC, FRB, FDIC and NCUA) issued a joint statement last week, addressing the risks of offering only Qualified Mortgages.  In the statement, the agencies said they "do not anticipate that a creditor's decision to offer only Qualified Mortgages would, absent other factors, elevate a supervised institution's fair lending risk."

The statement goes on to say that lenders need to continue their current evaluation processes for fair lending risk as they would for any other product and that each case will be evaluated on its merits.

This isn't the unequivocal statement lenders may have hoped for, but there is some degree of solace in knowing that the regulators do not consider the mere act of making only Qualified Mortgages a fair lending risk.

CFPB eRegulations


The CFPB has released a new online tool dubbed eRegulations, a central resource to allow users to find answers to questions about regulations.

The new rules on international money transfers, which took effect on October 28, 2013, are the first rules the CFPB rolled out on eRegulations. The CFPB is seeking comments and suggestions via email to further enhance the resource. IBAT has already suggested that the CFPB include an option to view an entire regulation at once. The CFPB responded promptly to that suggestion stating that they don't currently have a method for viewing a regulation in its entirety, but are working on it.

Diversity Standards Proposed


IBAT members are encouraged to comment on proposed joint standards for assessing diversity policies and practices, put forward by regulators last week.

The Dodd-Frank Act requires each of the federal financial regulatory agencies to have an Office of Minority and Women Inclusion to address the agency's diversity policies and practices and to develop standards for assessing diversity policies and practices in their regulated entities.  Although the proposal takes into account individual entities' circumstances, including asset size, number of employees, and number of customers, the standards in the proposal appear to suggest that entities that are exempt from Affirmative Action adopt standards that are very similar to Affirmative Action. Implementing these standards at small community banks, where management struggles to hire and retain qualified staff, will be difficult.  IBAT will file a comment letter on this proposal and will provide it when it becomes available.

When drafting your comment letter, please refer to the specific inquiries made by the agencies, which begin on page 21 of the document linked above.

Week in Review: October 25, 2013


There has been much [last] week for credit markets to digest; old news, new news, good news, not-so-good news, and even some non-healthcare website related bad news. Starting on Monday, the regularly scheduled release of Existing Home Sales disappointed many with a decline of 1.9% for the month. Some see this as anecdotal evidence that higher mortgage rates are dampening demand, particularly investor demand. Tuesday's big news was the delayed release of the previously postponed September Unemployment Report. We learned, retroactively, that the Unemployment Rate fell by .1 to 7.2%... Read more in the Baker Market Update.

2014 TechMecca


Richard Bowen, often described as the "Citigroup Whistleblower," who repeatedly warned executive management about risky business practices and potential losses related to mortgage lending, has been booked to keynote TechMecca 2014. Bowen will speak on the topic, "Ethics in Business and Today’s Financial Crisis."

Bowen, former Business Chief Underwriter for Citigroup, monitored its credit quality over a business unit that involved the purchase and sale of $90 billion annually of residential mortgage loans. 

Bowen not only warned the board of directors, but also requested an outside investigation of his business unit. Eventually he testified before the Financial Crisis Inquiry Commission about his Citigroup business chief underwriting experiences.

Exhibitor and attendee registration for TechMecca are now open.

Electronic Transactions

In the past three issues of IBAT's Bottom Line, IBAT's Regulatory Compliance Manager, Kelly Goulart, published a three-part white paper series, Electronic Payment Liability and Regulation E. All three white papers are available in the Featured Resources section of the IBAT website.

The three white papers provide information regarding:

  1. Consumer Liability for Unauthorized Transfers;
  2. Regulation E - Error Investigations / Resolutions; and
  3. Liability for Unauthorized Transactions - Branded Cards.

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