Senate Reg Relief Likely

In a hearing of the Senate Banking Committee last week, Chairman Richard Shelby laid out his plans to advance regulatory reform legislation for the benefit of community banks and their customers. Shelby said that the Senate was “long overdue” in revisiting certain aspects of Dodd-Frank and mentioned that “there are many on both sides of the aisle that believe improvements can and should be made.” Ranking Member Sherrod Brown echoed Shelby’s sentiment but cautioned against attaching regulatory reform legislation to “must-pass” bills or pairing them with “goodies” for Wall Street.

With Shelby’s comments and Brown’s support, the smart money is on some regulatory reform legislation being introduced in the Senate before the end of February. What will make it into the Senate bill, however, is still anyone’s guess.

As mentioned earlier in the Bottom Line, IBAT is optimistic that a regulatory relief bill incorporating many of the provisions of the ICBA-produced and IBAT-endorsed Plan for Prosperity will move quickly in the first six months of this Congress. For that reason, IBAT members are encouraged to stay tuned in to the legislative process by signing up for legislative text alerts. You can do so by texting “IBAT Alerts” to 40404 from your mobile device. Additionally, please consider participating in IBAT’s 23rd Annual Congressional Visit in late April. This will provide an opportunity for you to meet with lawmakers to directly impact the progress of legislation.

Regional Meetings

IBAT is coming to your town - or a town near you - for round 2 of the 2015 “Tour de Texas” Regional Meetings, which begin Tuesday, February 24. We invite you to join IBAT Chairman John Jay and President and CEO Chris Williston for a legislative and regulatory update, as well as a big-picture overview of the year ahead for IBAT. Registration and other information can be found on our website.

Dates and towns for round 2:

  • February 24 - Galveston, Schulenburg, Weslaco
  • February 25 - Corpus Christi, Houston, Kilgore
  • February 26 - Mount Pleasant, Dallas

We look forward to seeing you soon, and we welcome your input beforehand on issues you’d like to hear discussed.

Baker Market Update: Feb. 17, 2015

For some, the arrival of Friday the 13th brings with it ominous fears of misfortune and malady. Those suffering from such misgivings need to remember one thing; it’s bad luck to be superstitious. We learned this morning that some consumers out there may have run into a little bit of bad luck as the University of Michigan’s Index of Consumer Sentiment fell from its 11 year high of 98.1 to 93.6. A big surprise, and not a good one. Maybe, however, it should not have been a surprise since earlier in the week a harbinger of falling spirits arrived in the form of the National Federation of Independent Businesses (NFIB) Optimism Index. That measure of commercial hopefulness darkened significantly to 97.9 from 100.4. Are these the results of a perception at odds with rhetorical expectations or a reflection of a feared relapse into the gloaming?

Read more in the Baker Market Update.

Presidents' Day

In observance of Presidents' Day, the IBAT office will be closed on Monday, February 16, 2015. We will resume to regular business hours on Tuesday, February 17.

Fed Proposes New Rule

Late last month, the Federal Reserve proposed a rule that would expand the regulatory relief provided by its small bank holding company policy statement. While the legislation was passed by Congress in December, the proposed rule would raise the statement’s asset threshold from $500 million to $1 billion as well as extend coverage to savings and loan holding companies. Comments are due by March 4.

American Banker Presents...

We here at IBAT and American Banker have put our heads together to leverage our relationship and we are pleased to provide a special offer for you to attend the 2015 Retail Banking Conference. Since the event is in Austin this year, American Banker has set up an opportunity for local IBAT members to join us for the first time.

Join us at Retail Banking 2015, March 9-11 in Austin, Texas!

IBAT has secured a special member rate of only $795. That’s an $800 savings!  Give me a call today at 212-803-6072 or email me at glen.vandusen@sourcemedia.com. Make sure to mention the code IBAT for your member rate.

Attend up to 4 of our tracks at the conference:

SW Graduate School of Banking

The 58th annual session of the SW Graduate School of Banking (SWGSB) will be held May 25 – June 5, 2015 at Southern Methodist University's Cox School of Business. For bank officers looking to take their career to the next level, this is an ideal option. One of the nation's leading graduate banking schools, SWGSB is a three-year program that meets for two-week sessions. The first year covers banking essentials, the second year focuses on leadership development and the third year tackles strategic vision and thinking.

Program highlights include curriculum created by industry experts, the ability to tailor the program through a choice of electives and a continuous focus on leadership and team building.

Pushing Back Against the Burden

The second Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) Outreach Meeting was held at the Dallas Fed on February 4, 2015. The purpose was to receive information on regulatory burden, and the regulators got an earful from community bankers participating in the panels. Washington was well represented with FDIC Chairman Martin Gruenberg, Fed Governor Jerome Powell and OCC Senior Deputy Comptroller Toney Bland (filling in for Comptroller Curry who was snowed in). Texas Banking Commissioner Cooper and Deputy Comptroller Barker completed the regulatory side of the program.

The rules under review are divided into groups with separate panels tasked with commenting on specific sections. IBAT was well represented in Panel One with past Chairs Pat Hickman, Robert Hulsey and David Williams as well as Director Jeff Wilkinson. Panel Two included representatives from six consumer and community affairs organizations, including CDFIs. A number of community bankers served on the panels with representation from large and small institutions as well as bankers from urban and rural areas. Click here for the agenda and panelists.

Although the EGRPRA review doesn't include consumer rules under the CFPB's control, that didn't stop the panelists from observing that the rigid Dodd-Frank Act requirements are driving many community bankers out of residential mortgage lending. Specific issues raised in other areas included extending the exam cycle to two years, simplifying the call report, amending the Reg D limits on auto transfers for savings/MMDA accounts, adjusting size standards for community banks in various rules, revisiting CRA requirements, bringing decisions back from D.C. to the local regions, increasing the size requirement on certified appraisals, simplifying ALLL for community banks, adjusting the monetary instrument and CTR thresholds for BSA/AML rules, increasing thresholds on Reg O for board approval of loans and executive officer loan caps, revisiting capital rules (particularly the HVCRE requirements), improving ombudsman/appeals process and stopping the trickle down of "Best Practices" in mega banks as requirements for community banks. This is only a quick review as there were many more excellent recommendations.

IBAT commented on the first round of rules for review and will follow up with additional comments. As of the hearing, only 44 comments had been filed. IBAT encourages members to take time to comment on the rules currently under review. You can do so electronically through the FFIEC website.

TechMecca 2015 Recap

TechMecca 2015 drew 400 community bankers and industry supporters to Dallas last week to consider the future of community banking and the technology that will drive that future. The show, which included two days of education for bankers as well as 75 exhibiting companies, is the largest bank technology trade show in the Southwest.

One issue that was front and center at TechMecca 2015 was the advent of new technology that is driving customer experiences in the branch setting. In a survey of more than 100 TechMecca attendees, 44% identified "enhanced customer experience" as their top objective for 2015.

Speaking directly on the issue of disruptive technology was Brett King, author of "Bank 3.0," who joined the TechMecca audience virtually on Monday. King rejected the idea that inserting new technology in the branch setting will cause a resurgence in branch traffic. "People are not visiting the branch because they don't need to as much as they used to," King said, citing that the average bank customer will only visit a branch two times this year. "Branches are going to be with us for some time but you can no longer rely on branches for revenue or relationships going forward. They will become just another part of the overall bank strategy."

King challenged bankers to think beyond the four walls of the physical branch to build a diverse presence to drive revenue and future transactions. "No industry has successfully defended its business model from technological disruption," King said. "Banks have to understand the shift that's happening from physical communities to digital communities."

TechMecca also afforded the IBAT family an opportunity to honor Robert and Riter Hulsey of American National Bank of Texas, who were welcomed onto the Wall of Heroes and Legends of Texas Community Banking. More information on the recognition will be featured in an upcoming issue of The Texas Independent Banker magazine. All of the photos from TechMecca 2015 can be found here.

Committees Named in Texas House

As anticipated, Speaker Joe Straus released committee assignments for the Texas House last week. The vast majority of legislative activity of concern to IBAT members will occur in two committees - Investments and Financial Services (IFS) and Business and Industry (B&I). The IFS Committee will be chaired by Tan Parker with returning member Oscar Longoria named Vice Chair. The B&I Committee will once again have Rene Oliveira as Chair with Ron Simmons serving as Vice Chair. There are a number of new members on each committee. We look forward to working with the leadership and members of these and several other committees as the real work of the 84th Texas Legislature now begins.

There are several resources that you can access to help you stay active in the legislative process. Take a moment to:

  1. Review IBAT’s proactive legislative agenda,
  2. Sign up to receive legislative text alerts by texting “IBAT alerts” to 40404 and
  3. Register for Community Banking Day at the Capitol, April 7-8, 2015 in Austin.

Finally, if you are interested in seeing which committee assignments your lawmaker received, you can view a full list of committee appointments by member.

Baker Market Update: Feb. 9, 2015

For many, the first week of February has been a little rocky. Seahawk fans will forever second-guess an ill-fated play call that managed to snatch defeat from the jaws of victory. Add to that, the Groundhog noticed that his shadow was showing, and Tiger Woods has again demonstrated that he is a shadow of his former self. Any bright spots? You betcha! Most observers will probably conclude that [Friday] morning’s news of 257k new jobs created last month belongs in that category. Upward revisions to October and November reports bring the three-month job creation average to 336k and that is a big bright spot. The fact that the Unemployment Rate rose to 5.7% from 5.6% is not particularly worrisome as the Participation Rate rose to 62.9% from 62.7%. Paradoxically, the return of previously discouraged workers to the labor force could exert upward pressure on the unemployment rate, even as job creation numbers grow.

Read more in the Baker Market Update.

Ann Worthy Retires from Dallas Fed

IBAT was pleased to have the opportunity to attend a reception last week honoring Ann Worthy upon her retirement from the Federal Reserve Bank of Dallas. The IBAT Board expressed its appreciation to Ann in aresolution presented at the event.

“Ann Worthy has done an amazing job as the head of bank supervision for the Dallas Fed,” said Steve Scurlock, IBAT Executive Vice President. “She has been accessible, willing to deal candidly on a variety of issues and has unfailingly accepted our multiple invitations to speak at IBAT programs. I have very much appreciated the relationship we’ve all enjoyed with this exemplary public servant and wish her the very best in retirement.”

ICBA Community Banker Survey

According to a survey recently released by ICBA, community bankers find new rules and requirements to be the biggest barrier to making residential mortgage loans. The survey found that 9% of banks are considering an exit from this line of lending based on these obstacles. Other findings show that nearly 80% of respondents have increased the number of staff dedicated to lending compliance during the past five years.

IBAT conducted a mortgage survey last year that found similar results - more than 8% of respondents stopped making residential mortgage loans while nearly 50% limited the types of residential mortgages loans they make.