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Commission. Basically, email messages should include a GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. As a result COMMUNITY BANK
“from” line that identifies the business as the sender and of the savings and loan crisis, Congress imposed Gen-
a “subject” line that accurately describes the message. erally Accepted Accounting Principles on banks and EXPERIENCE
There should be an “opt-out” mechanism, including an eliminated regulatory accounting. Thus, the Financial
email address, physical address or other mechanism so Accounting Standards Board (FASB) effectively has the CORRESPONDENT
that the recipient can opt out of future marketing emails. power to “regulate” through its promulgation of ac-
Then, of course, the sender should be sure to honor such counting standards. One example is FAS 166/ASC 860, BANK EXPERTISE
opt-out requests within 10 days. which deals with whether a transaction is a true sale of
There are special rules for “forward-to-a-friend” an interest in a loan. Get it wrong in your participation
programs. The application of the rules will depend on documents and you can have a lending-limit violation.
how the logistics are set up and whether the business is Unfortunately, FASB sometimes develops rules that Fixed Income Securities Sales
compensating the forwarder in some manner. may make sense with regard to publicly traded com- •
panies but just don’t fit community bank products and Bond Accounting & Safekeeping
FAIR LABOR STANDARDS ACT. These Depression-era laws ap- activities. My “favorite” recent accounting rule is the
ply to all employers and categorize employees as exempt or change in Allowance for Loan and Lease Losses using •
non-exempt, with the latter entitled to overtime for work the Current Expected Credit Loss (CECL) methodology. Loan Hedging (ARC Program)
in excess of 40 hours in a work week. In addition, non-ex- Although FASB is a private, independent organiza-
empt employees must keep time records, but not necessar- tion, with its authority to set standards, it is effectively a •
ily punching a time clock. The exemptions include execu- regulator with great power. Commercial & Industrial Credits
tive, administrative, professional and outside sales. •
The Department of Labor writes the rules and in- anking regulators simply aren’t the only agencies
terpretations for the FLSA. The requirements for var- with the ability to set rules and requirements for International Services
ious exemptions have differed from administration to B banks. IBAT keeps an eye out for these other laws •
administration. One of the first actions taken by the and rules and comments and reports on them. If we miss Clearing/Cash Management
DOL under the Trump administration was to pull back one, let us know! H
a significant change to the compensation requirements •
for the “administrative” exemption. However, rulings as Karen M. Neeley, in the Austin office of Kennedy Sutherland Asset/Liability Management Reporting
to whether or not a mortgage loan originator is exempt LLP, is widely recognized throughout the Texas financial
have yo-yo’d between the Bush and Obama administra- institution community for her expertise in the areas of regulatory
tions with no action—yet—from Trump’s DOL. and compliance law. Contact her at [email protected].
IBAT 512.681.4452 800.848.8573
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