What Now?

Thoughts from Karen Neeley
IBAT General Counsel and Senior Attorney with Kennedy Sutherland, LLP.

Unless you have been in a coma, you are aware that the federal government ran out of funding and now significant agencies are shut down.  However, the federal banking regulators are funded outside of the budget process and should be operating as normal.  On the other hand, SBA is shuttered as is USDA.  This impacts lending activities through them.  The SEC will have to furlough employees.  IRS and FinCEN are affected, although the OCC (another part of Treasury) is not.  Tax transcripts will not be available from IRS.  Here is a link to a helpful letter for Sellers from Fannie Mae. The Social Security Administration is affected, but social security and disability checks will still go out and Medicare will be paid.

Bank customers who are furloughed federal employees will not be paid.  Essential personnel will continue to work (to protect our borders and as prison guards as well as other critical functions), but they aren’t being paid.  In past shutdowns, Congress has authorized back pay.  However, there is no guarantee that this will be the case this time.  Meanwhile, banks have customers with loan payments and living expenses that won’t wait.  Consider setting up a small loan program to assist during this period as well as a loan modification procedure.

Flood Insurance Update - "As of this evening, all NFIP insurers have been directed to resume normal operations immediately and advised that the program will be considered operational since December 21, 2018, without interruption," FEMA said in a statement posted to the agency's website.

Thankful for You

We’re counting our blessings this Thanksgiving – for family, friends, freedom and the opportunity to work for an industry that makes such a positive impact throughout Texas. Your IBAT family is proud of the work you do and grateful for your support and friendship.

In today’s busy world, we want to take a moment to stop and reflect on the many blessing we enjoy each day. We wish you and yours a Happy Thanksgiving! May your week be filled with quality time with the people closest to you and a little bit of rest from the incredible work you do.

The IBAT office will close at noon on Wednesday, November 21 and will remain closed through Friday, November 23. Normal business hours will resume on Monday, November 26.


One of the most well-worn phrases every two years is, “This election cycle is unique.” For a variety of reasons, this particular election cycle is indeed one of the more interesting ones in quite some time. Your vote matters, and much is at stake.

Early voting for the November 6 general election begins on Monday, October 22 and runs through Friday, November 2. Polling place and other important information can be found on your respective County Clerks’ websites. The Texas Secretary of State’s website is also a great source for information regarding the upcoming elections.

As is customary, we have listed those candidates to whom the IBAT PAC or IBAT FedPAC have contributed in this cycle. Please note that we have excluded those who opted not to run for whatever reason or were defeated in the primary.

Additionally, questions regarding judicial elections around the state are asked frequently. The Texas Civil Justice League's (TCJL) endorsements for a variety of judicial races can be found here. IBAT is a member of, and works closely with, TCJL.

Finally, IBAT is a corporate sponsor of the Texas Tribune (The Trib). One of the more interesting election coverage offerings from The Trib is the “Hotlist,” which lists some of the more competitive races to watch. The list will be updated on a weekly basis between now and election day. If you are so inclined, feel free to take a look.

Thank you for your engagement in this important process, and your ongoing support of IBAT and our Political Action Committees.

Merger News

Fourth Quarter 2018 is expected to bring about the merger of ABA Insurance Services by the holding company of Great American Insurance Group. No reductions in coverage are expected and personnel will remain and operate as usual.

The ABA endorsement will continue and dividends for ABA Members are to continue when they’re declared. For more information click here or feel free to call Carol, Connie or Valarie with the IBAT Financial Services team at 512-474-6889.


October is National Cybersecurity Awareness Month (NCSAM), a collaborative effort between the U.S. Department of Homeland Security (DHS) and its public and private partners, including the National Cyber Security Alliance, to raise awareness about the importance of cybersecurity and individual cyber hygiene.

Community bankers are certainly aware of the risks posed by cybersecurity and can take an active role in educating consumers about those risks. To assist you in this effort, DHS has prepared the following resources:

To learn more about NCSAM and access more resources, you can also view the Department of Homeland Security’s homepage and download the NCSAM General Toolkit.


At this year’s annual convention, IBAT President and CEO Chris Williston addressed IBAT members, friends and family for the final time. If you were not present at IBAT’s convention, you’re in luck – Chris’s speech is available to view online. Get the tissues out!

Additionally, general session speaker Inquoris “Inky” Johnson spoke to a jam-packed room and no doubt motivated IBAT members with his message of determination, leadership, teamwork and perseverance. Hear his inspiring message here.

Salary Survey

The IBAT 2018 Texas Community Bank Salary and Compensation Survey report is now available. If you participated in the survey, log in to the IBAT Salary Survey homepage and click the “access reports” tab at the top to download the comprehensive results report. Participants can also access the custom reporting tool that sorts by asset size, geographic region and more—at no charge. Thanks to the nearly 100 banks that participated in this year’s survey, ensuring the data is comprised of a robust set of banks of various sizes and geographic disparity.

If you didn’t participate in the survey but want to know if your employees’ salaries and benefits are competitive with similar banks, the report can be purchased by IBAT members for $450. Contact Lindsey Gehrig if you have any questions or to purchase.


The Senate Banking Committee met last week to hear from the heads of the federal regulatory agencies on their progress in implementing the provisions of The Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155). This exhaustive process is clearly a priority for the agencies and progress continues, according to the witnesses at the hearing and corroborated by our discussions with the various regulators.

Progress to date has been made in the mortgage area, 18-month exam cycle and other provisions of S. 2155. Proposed rules implementing an important capital provision, allowing for a minimum leverage ratio in lieu of compliance with complex Basel risk-based capital requirements, are expected prior to yearend. Further, the short-form call report proposal is anticipated over the next several weeks.

IBAT will continue to provide input on the implementation of these – and other – provisions of the regulatory burden relief legislation and will encourage your comments when appropriate and necessary.

Baker Market Update: 10.09.18

Most avid sports fans are familiar with a concept known as the announcer’s curse. The moment a play-byplay commentator remarks that a quarterback hasn’t thrown an interception all season or that a golfer hasn’t missed a three- foot putt in two years, well, you know what happens next. On Tuesday of this week, Fed Chairman Jerome Powell told the National Association for Business Economics (NABE) the following: “There’s no reason to think that the probability of a recession in the next year or two is at all elevated.” And not only that, Jerome hasn’t missed a three-foot putt in two years

Read More in the Baker Market Update

2018 Convention

As promised, photos of the Annual Convention are now available on our Facebook page. Make sure to check them out and tag people you know—plus like, like, like away! Thank you to all who attended the event. If you weren’t able to join us, we hope to see you next year in Galveston.

Director Training

The 2018 Certified Community Bank Director’s (CCBD®) Program is once again coming to Dallas to address all areas of bank directorship—from duties and responsibilities to the essentials of bank finance. IBAT has worked with the Southwestern Graduate School of Banking (SWGSB) Foundation for several years to offer bank directors a two-year certification opportunity that covers not only the regulatory and fiduciary responsibilities of bank directors, but also board structures and processes.

In addition, the program focuses on what makes boards and directors effective as well as what is expected of them by regulators, examiners and shareholders. Click here for more information, requirement list and to register. We highly recommend this program.


As of September 21, 2018, a provision of S. 2155 that requires credit reporting agencies to freeze consumer accounts at no charge took effect. A requested freeze must be granted within a day, and consumers may also place year-long fraud alerts.

Consumer information and guidance about credit card freezes can be found here, here and here.

Mark Your Calendar

IBAT and ProBank Austin are partnering to bring you and your officers one-, two- and three-day seminars covering topics that are essential to your business today. Industry experts who are devoted to your success lead the seminars, which cover a wide range of subjects pertinent to bank regulations, operational procedures, marketplace trends and latest technology. Below are the upcoming topics and locations for the remainder of 2018:

Baker Market Update: 10.01.18

President Trump took the week off from castigating the Chinese over trade policy, and instead, switched to upbraiding them for meddling in America’s upcoming mid-term elections. He even intimated that Chinese President Xi may not be his friend anymore. Happily, the members of the FOMC are still buddies. The Friendly Open Market Committee got together this week and, to the surprise of no one, gleefully consummated its eighth rate- hike on this merry road to monetary normalcy

Read More in the Baker Market Update

IBAT's Convention Recap

On Tuesday morning Chris Williston took the stage for one last time as president and CEO of IBAT, providing reflections on 30 years at the helm of the organization and casting a vision for the future.

In his prepared remarks, Williston recounted the state of IBAT when he began and recognized many individuals who had contributed to the success of the organization along the way. “IBAT is the largest and most successful state community banking organization in the nation,” Williston said, “and that is a testament to the volunteers, advocates and staff who have given so much.”

In turning to the future, Williston urged those in attendance at IBAT’s Annual Convention to ignore the naysayers “who say that the only path to survival is an eventual merger of associations.” “Once you give up your independence, you can never get it back,” Williston continued.

Williston will retain the role of IBAT president and CEO until December 31, 2018. As previously announced by the IBAT board, his son, Christopher L. Williston VI, will be his successor in the role. After stepping down from the role as president and CEO, Chris will remain a part of the IBAT team until mid-2019, assuming the role of membership ambassador.

The full text of Chris’s remarks will be available in the November/December issue of the IBAT magazine.


Challenging the NCUA

As Independent Community Bankers of America (ICBA) Immediate Past Chairman Scott Heitkamp of ValueBank Texas in Corpus Christi discussed earlier this week at IBAT’s convention, one of ICBA’s priorities continues to be leveling the playing field with credit unions. ICBA President and CEO Rebeca Romero Rainey recently tackled this topic in an American Banker BankThink piece, titled “End the free ride for tax-exempt credit unions.” We recommend taking a few minutes to read this and thank Romero Rainey for continuing to draw attention to this important topic.

Both IBAT and ICBA have long sought to ensure credit unions stay within their original purpose while keeping their tax-advantaged status over tax-paying community banks. Both groups are also actively challenging the National Credit Union Administration as it fights to expand geographically, further straying from its original purpose.

Legal Ease

For customers who have not ‘opted-in’ regarding transactions subject to Regulation E §1005.17(a), we do not charge a per transaction overdraft fee. However, can we impose a ‘negative balance charge’ at the end of the statement cycle, even if the only items overdrawing the account are debit card or ATM transactions?

For this week's Legal Ease in a printable PDF, click here.

Contact Kelly Goulart (512-275-2231) or Janie Daniel (512-275-2221) if you have further questions or need clarification on the topic above.

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.

Bank Lending Institute

The hotel deadline for IBAT’s 5th Annual Bank Lending Institute (BLI) is October 22, 2018. This two-year banking program is designed to provide practical bank management and strategies necessary for community bank lenders. Bankers, industry consultants, regulators and other community bank industry experts are heavily involved in the creation of the curriculum.

BLI offers strategic insight into both the present and future of banking technology, best practices, administrative processes and project management. This year’s program will take place at San Antonio’s Hotel Contessa, the only luxury all-suite property on the Riverwalk. Register here.

Baker Market Update: 9.24.18

Many of those with an opinion about such things seem to be of the opinion that China’s muted retaliation to Mr. Trump’s tariffs is proof that Chinese President Xi was the first to “blink” in the SinoAmerican trade skirmish. There are those, however, that see things a little differently. They think the “blink” was really a “wink.” As in the “I know something you don’t” kind of wink. Many have concluded, perhaps prematurely, that America’s chief executive has all the leverage when it comes to dictating international trading terms, but, China’s leadership doesn’t have to worry about the outcome of midterm elections or Supreme Court nominations or Robert Mueller. And besides, the Chinese finished their wall about 400 years ago, while Mr. Trump is still trying to get his started. And, therein lies the real rub and the true motivation behind the President’s trade policy. Wall envy.

Read More in the Baker Market Update

Better Business Bureau

An investigative study conducted by the Better Business Bureau found that while consumers write fewer checks today, fake check scams are on the rise. “Don’t Cash That Check: Better Business Bureau Study Shows How Fake Check Scams Bait Consumers” looks at how fake checks deceive consumers. Fake checks are used in a variety of frauds, including employment scams and prize/sweepstakes fraud. In all cases, victims deposit the check and send money back to scammers. Highlights of the study include:

  • Fake check scam complaints to regulatory agencies and consumer watchdog groups have doubled over the last three years;
  • Data suggests there may have been more than 500,000 victims of counterfeit checks in 2017;
  • Check fraud affects victims of all ages and income levels, with consumers ages 20-29 victimized more than any other age group; and

Nigerian gangs are behind most fake check frauds.

IBAT's Magazine

The September/October 2018 issue of IBAT’s magazine, The Texas Independent Banker, is now available online. This month’s cover feature takes an in-depth look at how to attract talented employees who are out there but not always easy to locate. Other articles include:

As always, we welcome your suggestions for content to be featured in future issues. Please feel free to contact Neil Ferguson with ideas.