Legal Ease: May 04, 2017

Our bank has been served with a subpoena to appear and testify on bank records in a criminal trial in another state. The DA said he will pay our travel expenses. Must we appear?

Learn the answer here.

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

Legal Ease is chosen from questions received through the IBAT Compliance Adviser Helpline, available to IBAT members free of charge at 1-800-749-4228 or kgoulart@ibat.org. IBAT members can also read and/or initiate discussions with other community bankers in the IBAT Compliance Forum. The Legal Ease archives are also available on IBAT2GO, the official IBAT mobile app.


Reprinted from CSBS Examiner

CSBS announced today it has filed a complaint in the United States District Court for the District of Columbia against the OCC. The complaint seeks to prevent the agency from moving forward with an unlawful attempt to create a national nonbank charter that will harm markets, innovation and consumers.

“The OCC’s action is an unprecedented, unlawful expansion of the chartering authority given to it by Congress for national banks. If Congress had intended it to be used for another purpose, it would have explicitly authorized the OCC to do so,” said John W. Ryan, CSBS President and CEO. “If the OCC is allowed to proceed with the creation of a special purpose nonbank charter, it will set a dangerous precedent that any federal agency can act beyond the legal limits of its authority. We are confident that we will prevail on the merits.”

The complaint asserts that by creating a national bank charter for nonbank companies, the OCC has gone far beyond the limited authority granted to it by Congress under the National Bank Act and other federal banking laws. Those laws authorize the OCC to only charter institutions that engage in the “business of banking,” which under the federal banking laws requires an institution, at minimum, to receive deposits. Yet the OCC is attempting to create a new special purpose charter for nonbank companies that do not take deposits, without express statutory authorization. The OCC does not have the authority to create a special purpose charter for nonbanks without specific congressional approval.

“The OCC’s proposed action ignores Congress, seeks to preempt state consumer protection laws, harms markets and innovation, and puts taxpayers at risk of inevitable fintech failures. This is a dangerous combination and one the court should decisively halt,” said Ryan. “To protect consumers and taxpayers, to promote innovation, and to ensure fair and open competition, CSBS was forced to take legal action against the OCC charter.”

“State regulators already supervise a vibrant financial services marketplace that includes non-banks and banks. Tens of thousands of mortgage, money transmission, debt collection and consumer finance companies—not to mention over 75 percent of this nation's banks—already operate under the state system,” said Ryan. “That regulatory structure has produced a robust platform for innovation. Moving forward, state regulators will continue to streamline regulation and automate licensing across state lines, ensuring the system will work even better for state-licensed companies and consumers while protecting taxpayers.”

The CSBS filing is available here. Attached exhibits sent with the complaint are available here.

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-275-2226

Upcoming Leadership Conference

This year’s IBAT Leadership Conference, June 22-24 at the Horseshoe Bay Resort, will play host to world-class speakers, including Super Bowl Champion tight end Ben Utecht. Utecht will share his talk, “The Champion’s Way: What it Takes to be a World Champion Leader On and Off the Field.” Here’s how Utecht describes his session:

On February 7, 2007, I stepped onto the Super Bowl field and into a Hall of Fame huddle with my teammates, including Peyton Manning and our head coach Tony Dungy. We became a world-class offense by creating a culture of champion leadership and dynamic communication. This culture was fueled by four foundational principles that together allowed each player to reach his greatest potential for the benefit of the team in a highly stressful and competitive environment.

After football, I began to realize these championship principles were the backbone for off-the-field success as well. “The 4 Ls” – listening, learning, language and love – are foundational in both life and business. The culture our team created around these principles earned us the greatest reward in the game of football: a Super Bowl championship. Like the 2006-2007 Colts, you too can realize your greatest success potential, in life and business, through the perfect practice of “The 4 Ls.”

Don’t miss this session and much more at IBAT’s 32nd Annual Leadership Conference. See the full agenda and register now by clicking here.

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


House Subcommittee on Financial Institutions and Consumer Credit Chairman Blaine Luetkemeyer last week introduced legislation advancing comprehensive regulatory relief for community banks. One of the main goals of the Community Lending Enhancement and Regulatory Relief (CLEARR) Act is to help consumers once again access affordable credit. Similar legislation was introduced in the 113th and 114th Congresses.

Rep. Luetkemeyer’s office shared the following information about the CLEARR Act and its purpose:

"This legislation seeks to ease the burdens facing local financial institutions by providing them with targeted regulatory relief from an onslaught of federal red-tape that has made it increasingly difficult for them to serve their customers and communities. Included in the legislation are provisions to provide relief from costly escrow requirements, increase regulatory due process for financial institutions, limit the authorities of the Consumer Financial Protection Bureau, curtail Operation Choke Point, and increase consumer access to mortgages and other banking products."

IBAT fully supports the CLEARR Act and appreciates Rep. Luetkemeyer’s efforts to provide meaningful and comprehensive regulatory relief for community banks across the country.

Staff contact: Chris Williston, cwilliston@ibat.org, 512-474-6889

Trump Tax

The Trump administration laid out its much-anticipated tax reform proposal last Wednesday, taking the first steps toward lowering and simplifying taxes for American individuals and companies.

Under the proposal, individual tax brackets would be reduced to three (from the current seven) with rates at 10 percent, 25 percent and 35 percent. The administration also seeks to eliminate unspecified loopholes, which “mainly benefit the wealthiest taxpayers,” and repeal the death tax, the alternative minimum tax and the 3.8 percent Obamacare tax on small business and investment income.

Corporate taxation would also see drastic changes under the proposal with tax rates slashed to 15 percent for all corporations, including pass-through entities like partnerships and corporations organized under subchapter S of the Internal Revenue Code (like the 235 Sub S banks in Texas).

Congress has its own plan for tax reform, which it will need to reconcile with the President’s proposal under the guidance of Texas Congressman Kevin Brady, Chairman of the Ways and Means Committee. Check future issues of the Bottom Line for updates and information on the effect of tax reform on Texas community banks.

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-275-2226

State Legislature

With deadlines looming, the pace of activity in committees and on the floor is entering the “frantic” phase as is typical at this juncture of the session. We are pleased to report that the bulk of our proactive agenda is moving forward in the process, and the bills that concern us appear to be stalling out. 

As we believe you have plenty to read daily, we plan to provide a full update in next week’s Legislative Insider. In the meantime, please mark your calendar for IBAT’s popular end-of-session webinar that we are planning for Tuesday, June 27 at 10 a.m. Save the date!

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-275-2226


While it seemed all eyes were on Congressional negotiations to avoid a government shutdown last week, the work of regulatory reform was quietly getting under way as the House Financial Services Committee held its first hearing on Chairman Jeb Hensarling’s CHOICE Act.

Markup of the CHOICE Act will take place this week, and Democrats on the committee are expected to oppose provisions of the bill they perceive to be big-bank friendly. 

Meanwhile, Treasury Secretary Steve Mnuchin signaled his support for the CHOICE Act, praising Hensarling and stating the Department’s commitment to stimulating the economy and further preventing taxpayer-funded bailouts in the future.

“I applaud the steady commitment and leadership that Chairman Hensarling and his colleagues have provided on these issues, and welcome the reintroduction of the CHOICE Act,” Mnuchin said.

IBAT members and community bankers from around the country will gather in Washington, D.C. this week for the ICBA Capital Summit, at which both Hensarling and Mnuchin are scheduled to speak. 

Check back next week for more information on the path towards regulatory reform and a recap of IBAT’s Congressional Visit.

Staff contact: Chris Williston, cwilliston@ibat.org, 512-474-6889

Baker Market Update: May 1, 2017

Baseball fans of a certain age may recall these wise words from the legendary Casey Stengel: “The key to successful managing is to keep the five guys who hate you away from the four guys who haven’t made up their minds.” President Trump may want to keep that anecdote in mind as he attempts to rewrite the nation’s tax code. Nothing happens without legislative cooperation and, at present anyway, markets are less than convinced that he’s going to be the beneficiary of any such cooperation.With this week’s announcement of a proposed major-league tax cut, the Trump reflation trade should have reflated.  It didn’t and it hasn’t, at least not so far. And until Congress gets on board, it won’t.

Read More in the Baker Market Update

2017 Main Street Tour

As previously reported in the Bottom Line newsletter, IBAT sponsored last week’s First Lady's Texas Main Street Program (TMSP) Tour for the 23rd year. During events in Buda and Linden, both cities officially become designated Main Street communities. IBAT’s Chris Williston spoke on behalf of the association at these events.

“Everyone should, just once, experience the dedication of Main Street cities across Texas,” said IBAT President and CEO Chris Williston. “Last week I had the pleasure of welcoming Buda and Linden to Texas Historical Commission's Main Street Program with Texas First Lady Cecilia Abbott. It was truly a Norman Rockwell moment.”

Texas First Lady Cecilia Abbott and Chris Williston speak during the induction of
Buda, TX as a designated Main Street community.


Staff contact: Lindsey Gehrig, lgehrig@ibat.org, 512-275-2215

Top Webinars

Legal Ease: April 27, 2017

What sort of garnishments, levies or freezes are subject to protection for certain federal benefit payments? And can we charge a fee for handling garnishment – even for those accounts that receive a federal benefit payment?

Learn the answer here.

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

Legal Ease is chosen from questions received through the IBAT Compliance Adviser Helpline, available to IBAT members free of charge at 1-800-749-4228 or kgoulart@ibat.org. IBAT members can also read and/or initiate discussions with other community bankers in the IBAT Compliance Forum. The Legal Ease archives are also available on IBAT2GO, the official IBAT mobile app.

IBAT Legislative Insider

We are pleased to report that several of our proactive initiatives are moving through the process, and last week reflected significant incremental progress. A full report is provided in the latest issue of the IBAT Legislative Insiderwhich hit your inbox yesterday afternoon. We appreciate all of those who joined us in Austin several weeks ago – your involvement and meetings with your legislators obviously made a difference!

Issues ranging from public funds collateral, home equity, ability of a merchant to deny a transaction at point of sale and new account opening disclosure requirements all moved in a positive manner.

The next few weeks will be a frenzy of activity at the Capitol, as the 85th Session winds down at the end of May. Deadlines are looming, and the normal end of session stress level is palpable. Your IBAT legislative team will continue to do everything possible to move positive legislation forward and make sure the bad ideas remain just ideas. 

Please feel free to contact Steve or Meredyth if you have any questions or concerns.

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-275-2226

FinTech Showcase a Success

More than 100 community bankers from across the state attended 30-plus demo company presentations, 12 breakout sessions and various networking opportunities during IBAT’s FinTech Showcase, held April 12-13 at the Worthington Renaissance Hotel in Fort Worth. Formerly TechMecca, FinTech Showcase is designed specifically for community bankers to help meet technology, customer service and marketing needs.

In addition to the keynote session led by Tony Brigmon, Southwest Airlines’ former “Ambassador of Fun,” and the opportunity to explore Diebold Nixdorf’s Big Rig Experience Truck, attendees enjoyed the nontraditional demo format for a second year. Instead of the usual trade show exhibition hall, exhibiting companies each provided a seven-minute main stage presentation on a product or service. Below are links to half of the company demos:


Stay tuned for next week’s Bottom Line newsletter, and we’ll share the rest of the demos from FinTech Showcase.

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


Last week, IBAT registered its official support for the Financial CHOICE Act 2.0, introduced by Chairman Jeb Hensarling. As reported in last week’s Bottom Line, the legislation is an aggressive plan to overhaul some of the most damaging provisions of Dodd-Frank. 

In a letter sent to Chairman Hensarling, IBAT President and CEO Chris Williston stated IBAT members’ appreciation for his work on the bill, saying it “offers sensible regulatory relief for qualifying institutions, protects the American taxpayer and consumer from another Wall Street meltdown, and holds federal financial regulatory agencies accountable.”

“We strongly feel the passage of the CHOICE Act will help ensure that community banks throughout Texas – and the country – continue to not only survive but also thrive, in turn promoting economic growth throughout our great state,” Williston said. 

A hearing on the Financial CHOICE Act is scheduled for April 26.  

Staff contact: Chris Williston, cwilliston@ibat.org, 512-474-6889

Welcome Janie to IBAT

IBAT is pleased to welcome its new Regulatory Compliance Officer, Janie Stratton, to the team. She began this week and brings nearly 30 years of banking experience. Stratton, who recently moved to Austin from Weatherford, spent the last 10 years focused on lending compliance at First National Bank of Weatherford.

Her main responsibility is to provide a variety of compliance services and support for IBAT members, including assisting with the Compliance Forum, Legal/Compliance Hotline, Legal Ease Q&A and Capitol Comments. She will work closely with IBAT’s Regulatory Compliance Manager Kelly Goulart and General Counsel Karen Neeley.

Stratton attended Weatherford College and Tarleton State University. She has earned the Certified Community Bank Compliance Officer designation and is certified in Understanding Appraisals for Lenders.

Please feel free to email her to say welcome or ask any compliance-related questions. 

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

Baker Market Update: April 24, 2017

Mnuchin minutiae. Markets got a little excited yesterday when Treasury Secretary Steve Mnuchin said that the administration would “soon” release an ambitious tax overhaul plan that would not turn upon the dismantling of the Affordable Care Act. But investors didn’t get a lot excited because everyone’s heard similar promises before. Excitement may not be the most desirable emotional condition at present as the world digests a potentially game-changing election in France, civil disobedience in Venezuela, provocations from North Korea and Russia, disconcerting rhetoric over Iran, and a new kind of frappuccino from Starbucks.

Read More in the Baker Market Update

The Texas Independent Banker

The March/April 2017 digital edition of IBAT’s magazine, The Texas Independent Banker, is now available online. Click here to view the full table of contents or link directly to specific content below:

As always, if you have suggestions for future content to be featured in The Texas Independent Banker magazine, please contact Bonnie Kankel. We welcome your thoughts and ideas.

Staff contact: Bonnie Kankel, bkankel@ibat.org, 512-474-6889