85th Texas Legislature

An already crowded and busy Austin is about to get even more “weird.” The 85thTexas Legislature is back in town on January 10, 2017 and your IBAT government relations team has been busy dealing with any number of issues impacting community banking and your customers.

The first issue of our Legislative Insider newsletter for the upcoming session should have hit your inbox yesterday afternoon. We have focused on our proactive agenda as well as a variety of issues we have been dealing with over the interim, including:

  • Home Equity Reform,
  • Card Fraud/Cyber Security Concerns,
  • Lien Issues, and
  • Multi-party account types and disclosures, among others.

We hope you will take a few minutes to read this recap, and encourage you to let us know your thoughts on these or any other issues important to your bank.

And don’t forget to mark your calendars for IBAT’s Community Banking Day at the Capitol on April 4 and 5, 2017. Registration will open soon, and we hope you will seriously consider joining us in Austin to “tell the community banking story.”

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-474-6889

Webinars on Sale

Planning your staff’s education for the next 12 months? IBAT’s 2017 webinar series are online and on sale. Members receive six webinars for the price of five by purchasing an entire content series for the year ahead. Click the links below to see full details:

Don’t see the bundled series you want? You can create your own bundle of up to 10 training sessions. Our new bundled online education offerings come with a customized bank training page that can be placed on your internal network, including specific education offerings pushed to each employee or department. To learn more, click here or contact Julie Courtney.

Staff contact: Julie Courtney, jcourtney@ibat.org, 512-275-2227

IBAT Winter Summit

Registration is open for IBAT's popular Winter Summit program, January 16-18, 2017 at the beautiful Westin Riverfront Resort & Spa at Beaver Creek Mountain in Avon, Colorado. The resort, with “walk-out-the-door” access to the expansive Beaver Creek ski area, received glowing reviews from last year’s attendees.

Program speakers include Texas banking regulators and attorneys discussing current issues and challenges in an intimate setting. There will also be a session on economic conditions and investment strategies. The program is designed to encourage a high level of interaction with the speakers and participants, as well as ample opportunity to take advantage of the wide array of recreational activities in the Vail Valley.

Registration, accommodations and additional information can be found here, or feel free to contact Jessica Hernandez with any questions. We look forward to seeing you in Colorado!

Staff contact: Jessica Hernandez, jhernandez@ibat.org, 512-275-2207

Baker Market Update: Dec. 4, 2016

Expectations for improving economic fortunes continue to grow, and those expectations continue to fuel a Turmp jump that has pushed the Dow to an all-time high. Everybody likes that. The same Trump Jump has pushed pries on Treasury bonds to new lows for the year. Not everybody likes that. The Organization of Petroleum Exporting Countries agreed this week to cut production, making sellers of curde oil happy. Buyers of fossil fuel may be less happy as a barrel of West Texas Intermediate (the best kind of intermediate) now costs something north of $51. South of here, Fidel Castro has gone the way of Ricky Ricardo. Lucy, you got some 'splainin' to do.

Read More in the Baker Market Update

Cyber Week

Dell's Cyber Week specials for IBAT member banks, bank employees and customers are now online! Don't miss out - click here to enjoy the following special savings and get a head-start on your holiday shopping list. If you'd like to share these with your employees and customers, download the flyer and post it in your bank.

Special offers include:

Stack 15% off OptiPlex/Latitude/XPS (Coupon Code: TRIPLEDISCOUNT)
Coupon offer valid 11/21/2016 - 12/5/2016 at 7AM CST. For Dell Professional Associations only. Save an additional 15% off select OptiPlex/Latitude/XPS PCs. Coupon is valid with select other offers but not with other coupons. Limit of 5 promotional items per customer. Not valid for resellers and/or online auctions. Dell reserves the right to cancel orders arising from pricing or other errors.

Stack 6% off Inspiron PC’s (Coupon Code: TRIPLEINSPIRON)
Coupon offer valid 11/21/2016 - 12/5/2016 at 7AM CST. For Dell Professional Associations only. Save an additional 6% off select Inspiron PCs. Coupon is valid with select other offers but not with other coupons. Limit of 5 promotional items per customer. Not valid for resellers and/or online auctions. Dell reserves the right to cancel orders arising from pricing or other errors.

These deals will be available through December 5, 2016. 

Ordering is easy! 
Visit Dell's website or contact Bryan Horten, IBAT’s Strategic Account Manager, at 512-942-9120 to order. As a reminder, whenever ordering Dell equipment please be sure to include the unique Dell/IBAT link number GS126658178.

IBAT Webinars

Did you know? IBAT, in conjunction with Financial Education, Inc., hosts close to 150 webinars a year. Webinars are a very economical way to train your staff for one low price. Everyone can sit in on the program with the use of a speakerphone and a computer, or access archived webinars on-demand.

Topics are broken up by category or by date and include:

  • Auditing & Accounting
  • Collection
  • Compliance
  • Directors
  • Frontline and New Accounts
  • Human Resources
  • IT
  • IRA
  • Lending
  • Operations
  • Security & Fraud
  • Senior Management

You can access a complete listing of upcoming webinars and archived webinars here.

BLI Recap

IBAT hosted its Bank Lending Institute (BLI) at the AT&T Conference Center on the University of Texas campus from November 13-18, 2016. The program, now in its third year, had both level I and level II classes.

Forty community bank lenders from across the state attended the program, which provides attendees with the tools and skills necessary to serve their customers while effectively managing risk, enhancing profitability and building a lending portfolio.

Congratulations to the Level II top students: Michael Colin O’Rourke, TIB – The Independent BankersBank, Dallas and Chad Moss, First State Bank, Ennis.

Also, congratulations to all class officers.

Level I:

  • President - Kristopher Kelley, First State Bank, Rice
  • Vice President - Brad Davis, State Bank of DeKalb and
  • Secretary - Antonio Delgado, First State Bank of Odem

Level II:

  • President - Michael O’Rourke from TIB-The Independent BankersBank in Dallas,
  • Secretary - Marcus Armstrong from Community National Bank & Trust in Red Oak

Learn more about BLI here, and contact us if you’re interested in the 2017 program.

Staff contact: Julie Courtney, jcourtney@ibat.org, 512-275-2227

Legal Ease

Compliance is full of traps for the unwary. Unfortunately, it is also full of traps for the wary. Although we thought we'd fully researched and vetted the answer to our last Legal Ease Q&A (November 15), astute Compliance Officer Alta Manstch pointed out that we missed a subsection of an interpretation to the constitutional provisions related to whether additional proceeds advanced during a refinance of a homestead secured loan must be closed as a home equity loan or reverse mortgage. 

We've published over 600 Legal Ease Q&As and retracted only one. We regret any inconvenience and promise to try to do better during the next 600 questions!  Here's the corrected Q&A. Again, thanks, Alta!

Health Insurance Rake Hikes

Our membership has been reaching out to us to discuss the incredibly high rate increases they are receiving for their upcoming health plan renewals. There are many reasons for these large increases, including the heavy losses on the ACA exchanges. This, combined with losses in their small group market, is causing the fully insured carriers to pass along larger than average rate increases to all of their clients. Our members are reporting average rate increases between 25% and 50%+!

We want to remind you that Advantage Health Plans Trust (AHPT) is an IBAT Endorsed Service Provider and it is not a typical insurance product. Instead, it is a banker-owned solution and alternative to the volatility of the insurance marketplace. When you join AHPT, you become a member and co-owner of the Plan with your fellow community banks. Becoming a co-owner with your peer bankers changes the dynamic of how employee benefits are viewed and managed, as a long term commitment to your bank, your employees, and your banking community.

Have you received a large increase or would like to see how you can change the way your bank manages benefits? Call Advantage Health Plans at 800-521-1711 to learn more about taking control of your benefits by becoming a member owner of your plan.

Staff contact: Curt Nelson, cnelson@ibat.org, 512-275-2240

Save the Date

The 44th Annual Texas Tech School of Banking will be held August 13-18, 2017. This two-year intermediate level program educates tomorrow’s community banking leaders and provides practical, real-world insight that can be used immediately by graduates in their current roles. Instruction is presented in a group-live format and many of the assignments are completed in small groups.

Held at the prestigious Rawls College of Business at Texas Tech, those attending stay at the historic Overton Hotel and Conference Center in Lubbock. For additional information on attending the 44th Annual Texas Tech School of Banking, click here.

IBAT is a proud sponsor of the 44th Annual Texas Tech School of Banking.

Staff contact: Kelly Goulart, kgoulart@ibat.org, 512-275-2231

ADA Website Guidance

IBAT submitted a letter to the United States Department of Justice (DOJ) asking for expedited rulemaking on accessibility standards for private websites. The request was issued after many IBAT members have reported receiving threatening letters from a plaintiff’s law firm, alleging to represent a non-customer tester. 

The DOJ has previously indicated that it does not intend to engage in rulemaking on website accessibility standards until 2018. 

“With this threat hanging over community banks…it is critical that DOJ formally adopt interim guidelines with a rational, achievable time frame for compliance and then proceed with final rules to govern this important area,” said IBAT President and CEO Chris Williston. “Regulation by ad hoc lawsuits is contrary to basic principles of fairness and due process,” he added.

In an effort to stay on top of the scope of this issue, IBAT is asking member banks who receive threatening letters to notify Shannon Phillips, IBAT Deputy General Counsel.

Staff contact: Shannon Phillips, sphillips@ibat.org, 512-275-2221

Overtime Rules Stopped

A United States District Court has put a halt on new overtime pay rules which were slated to take effect this week. The rule would have significantly expanded the number of people eligible to receive overtime pay by nearly doubling the minimum salary requirements for exemption. 

In his decision, U.S. District Judge Amos L. Mazzant III maintained that in requiring employers to pay overtime wages based on salary, rather than employees’ duties, the Labor Department had exceeded its authority under the Fair Labor Standards Act and disregarded Congress’s intent. 

“If Congress intended the salary requirement to supplant the duties test, then Congress and not the department should make that change,” Mazzant said. With the injunction, the current salary test of $455/week remains in effect, along with the duties test for exemption.

For your convenience, IBAT General Counsel Karen Neeley of Kennedy Sutherland, LLP has prepared a memo outlining next steps that community bankers can take in response to the injunction.

Staff contact: Shannon Phillips, sphillips@ibat.org, 512-275-2221

HE Lending Updates

The Finance Commission of Texas and the Texas Credit Union Commission ("commissions") adopted amendments to these home equity lending interpretations:

  • §153.5, concerning three percent fee limitation;
  • §153.8, concerning security of the Equity Loan;
  • §153.13, concerning preclosing disclosures;
  • §153.14, concerning one-year prohibition; and
  • §153.17, concerning authorized lenders.

The primary reason for the amendments was to implement changes resulting from the commissions’ review of chapter 153. The amendments relate to delivery of consumer disclosures, the types of lenders authorized to make home equity loans, and technical corrections. The amendments were effective on November 24, 2016, but will not cause any of your current practices to change.

IBAT incorporated the amendments into its PDF version of the interpretations found on our website. You can also access the interpretations on the Secretary of State’s website. When researching the interpretations, we prefer using our PDF version because it is easily searchable. You can find the interpretations and other home equity lending resources on our Bankers’ Resources page.

Staff contact: Shannon Phillips, sphillips@ibat.org, 512-275-2221

Dine and Demo Webinar

The last IBAT Dine and Demo webinar of 2016 is scheduled to take place on December 13. Dine and Demo is a successful series that kicked off earlier this year. If you’ve missed the past few programs, but have been wanting to find out what it’s all about, now is the perfect opportunity to register.

In case you’re wondering, what is Dine and Demo? The IBAT Dine and Demo series is a quarterly lunchtime webinar, noon-1 p.m., in which up to seven companies provide product demonstrations in seven minutes or less. There is no cost for bankers to attend so order in lunch, gather your team around the conference room table and see the best that industry providers have to offer from the comfort of your own bank.

We’ve heard from bankers about the lack of time to meet with providers – Dine and Demo is the solution. We highly encourage you to participate in this free program.

Additionally, we have space available for demonstrating companies. If you’re interested, please secure your spot today.

Overtime Pay Rule Update

On November 22, 2016, Judge Mazzant from the Eastern District of Texas, issued a preliminary injunction, stopping the December 1 application of a huge increase in the salary test for FLSA exemptions for executive, administrative, and professional employees. Here is the rest of the story.

Background. Both business interests (through Plano Chamber of Commerce and others) as well as a number of state AGs (including Texas) sued the Department of Labor (DOL) to enjoin the revised rules relating to executive, administrative, and professional (EAP) exemptions in the Fair Labor Standards Act (FLSA). The cases were combined by Judge Mazzant, who has issued a preliminary nationwide injunction, stopping the December 1 implementation of the significantly increased salary test. The next step will be a determination as to whether or not the FLSA supports the use of a salary test at all. A change in leadership at the DOL and US Attorney General could result in a decision to not defend the regulation.

The Memorandum Opinion and Order by Mazzant notes that the FLSA delegates to DOL the authority to define the terms "bona fide executive, administrative, or professional capacity." However, he has concluded that this exemption can and should be defined by referencing duties without also imposing a minimum salary level. The ultimate result may be that the rule will be amended as a result of the judicial determination that only a duties test is authorized under FLSA with no minimum salary requirement to be imposed.

By the way, a minimum salary test has been in the rules since 1949! By bumping up the minimum salary so significantly (almost doubling) without a phase-in, DOL virtually guaranteed push back.

So, this still leaves you with the question of what do in response to this order.  My hunch is that in January with a new administration, the salary test issue could be resolved with a decision to NOT DEFEND the rule. But that is only a hunch.  Here is a possible response:

Restore prior treatment of EAP. For many employers, the major issue is keeping these individuals on a salary basis rather than hourly. Also, the record keeping rules do not apply to exempt employees. Many previously exempt employees are unhappy with this perceived "demotion" as well as the need to punch a clock (figuratively) and keep time records. Employers may wish to indefinitely defer changes with the understanding that these may need to be made in the future. However, if you have already increased salaries, you may not be able to put that genii back in the bottle.

No change to MLOs. But please note that this case is about the salary part of the EAP rule.  That would not affect the prior rules relating to the duties test for mortgage loan officers (MLOs). According to DOL, MLOs don't meet either the administrative or the outside sales exemptions in the FLSA based on an analysis of their duties.

For more information contact: 

Karen M. Neeley

Baker Market Update: Nov. 28, 2016

Consumption across America was on full, holiday display [last Thursday] as households across America celebrated Thanksgiving. A traditional time for families and friends to come together and eat too much, argue too much, and watch too much football; if that’s even possible. Always festive and always looked forward to, this year’s holiday season may have a little different vibe. The University of Michigan’s Index of Consumer Sentiment told us on Thanksgiving Eve that we’re all feeling better. A lot better. With all due deference to the Buckeyes, the Wolverine Index unexpectedly leaped to 93.8 from 91.6 in November. Khaki pants are on sale for Black Friday.

And New Homes are on sale everyday. In October, however, that wasn’t enough to prevent a 1.9% decline in the volume of those sales compared to the previous month. All the while, Existing Home Sales rose by 2.0%. The Federal Housing Finance Agency (FHFA) reported that, in September, home prices rose by a widely expected 0.6%. None of these housing related numbers reflect the post-election world of significantly higher mortgage rates.

Read more in the Baker Market Update.

Thanking You

There is no greater time of the year to stop and reflect on the many blessings we enjoy each and every day. Your IBAT family is grateful to represent an industry which does such good throughout Texas communities and throughout the world.

We are especially thankful for your support and friendship and the opportunities you afford us to work together.

This Thanksgiving, we wish you and your loved ones a day full of splendor and merriment, and continued blessings in the days ahead.