Community Banker for a Day

We’ve all heard of “Take Your Child to Work Day.” ICBA recently launched a campaign that is an interesting and exciting spin on that concept. As we get closer to the summer recess in Congress, beginning August 3, 2015, ICBA encourages you to invite your congressman and senator to be a community banker for a day.

ICBA’s “Main Street Matters – Community Banker for a Day” campaign leverages the Congressional recess as an opportunity to invite your D.C. lawmaker to visit your bank while home, experience a day in the life of a community banker and understand firsthand why support is critical for community bank regulatory relief legislation.

ICBA offers invitation templates and other materials to prepare your staff for your VIP visitor. Please consider participating in this important campaign.

S. 1711

IBAT supports a recently introduced U.S. Senate bill (S. 1711) that directs the CFPB to allow a hold-harmless compliance period through the end of 2015 for lenders who attempt to comply in good faith with the new TRID requirements, which are effective October 3, 2015.

This bill follows a companion bill filed in the U.S. House of Representatives (H.R. 2213) that provides lenders with a temporary safe harbor from enforcement of the rule integrating mortgage disclosures under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).

These bi-partisan measures would protect lenders from private lawsuits and regulatory enforcement actions through December 31, 2015. IBAT will closely follow and report the progress of both pieces of legislation.

New CSBS Chair-Elect

Congratulations to Texas Banking Commissioner Charles Cooper for being elected Chairman-Elect of the Conference of State Bank Supervisors (CSBS) Board of Directors for 2015-2016. He also serves on the CSBS Executive Committee.

Commissioner Cooper held the position of CSBS Board Vice Chair in 2014-2015. Additionally, he currently serves as Chairman of the CSBS Finance, Compensation and Benefits Committee as well as being an active member on the CSBS Audit Committee, Legislative Committee, Regulatory Committee, Emerging Payments Task Force and Community Bank Steering Group.

The Commissioner’s banking career spans more than 40 years and includes senior-level positions in public and private sectors.

Regulation Reform

IBAT staff is back on the ground in Washington, D.C. this week, advocating for the advancement of critical regulatory relief legislation on Capitol Hill.  

“As an industry, we must keep up the heat,” said IBAT President and CEO Chris Williston. “We saw good progress in the first half of the year,” Williston added, “but we need to make sure that community bank issues stay top of mind for lawmakers as we progress through the doldrums of summer.”     

In recent weeks, much attention has turned to the critical need for a delay in implementation of the TILA-RESPA integrated disclosures. With a two-month delay now in place and legislation introduced in both chambers to institute a hold-harmless period for lenders, attention is turning back to the broader regulatory relief agenda.

“As reported to IBAT members during our Tour de Texas earlier this year, it’s essential that we get something done by this fall,” Williston said. “We need to continue to reinforce our message for comprehensive regulatory relief now, and we’re calling upon Texas community bankers to do the same, to ensure we cross the finish line before Presidential politics steal all of the attention in D.C.”

Baker Market Update: July 13, 2015

Accepting the responsibility to carry on for the irreplaceable and irrepressible Lester, I have volunteered to write this week’s LWL. After reading this, Lester may be cutting his vacation short and coming back to resurrect his reputation, but this week’s major news events are going to make this easier to accomplish.
The referendum in Greece was voted down, leaving the European Union with past due debts. Normally that would be a tough situation for a borrower, but Greece feels confident Europe will alter their terms for repayment by the July 12 deadline. And German Chancellor Angela Merkel is doubtful Greece can “deliver a credible plan and is willing to accept a Greek exit”. The Germans are faced with a tough choice: let Greece leave the Euro and deal with the unknown consequences to come or cut a deal and forgive some of their debts which opens the door for Portugal/Spain/Italy to do the same. Wait and see, but this is probably going to get worse before it gets better.

Register Today

Registration is open for IBAT’s 41st Annual Convention. For the first time in more than 30 years, the event will take place at the Galveston Island Convention Center, September 19-22. A detailed brochure about this event will be in your mailbox in the coming days. In the meantime, you may download a PDF here.

This year’s Convention is packed with educational and networking opportunities, including:

  • Chairman’s tailgate party;
  • State and national bank regulator roundtables;
  • Ten concurrent sessions addressing a variety of challenges you face every day;
  • Songwriters’ late show; and
  • Fishing tournament.

And don’t forget about the Annual Auction and Dream Vacation Sweepstakes, both benefitting the IBAT PAC. You may donate or purchase an item in the Auction or enter the Dream Vacation for a chance to win a $5,000 gift card. Detailed information will be included in next week’s edition of the Bottom Line.

Workers Compensation

Texas community banks usually don’t experience a problem with frequency of workers compensation claims. However, there may be an issue of severity when they have a claim. Since many banks are working with a lean staff, every staff member is key to accomplishing the necessary tasks each and every day.

Returning an injured employee to work as quickly as possible is important. Our colleagues at Berkley FinSecure offer a discussion of return-to-work benefits that make any added costs for accommodations minimal in the overall picture. For more information, click here or contact either Carol Troyor Valarie Ure at IBAT Financial Services.

.BANK is Here, Now What?

fTLD Registry Services, the .BANK registry operator, recently released theGuide to Leveraging .BANK to help educate bankers on the new domain’s enhanced security features. The guide also provides assistance to help banks with their communication plan surrounding the announcement of their .BANK domain. Click here to request the guide.

Due to high demand, .BANK domain verifications will take months instead of weeks as originally anticipated. However, domain names are reserved for applicants during the verification process. If you haven’t already begun this process for your bank, EnCirca (in partnership with ICBA) offers a pre-screening service for community banks, available here.

Insurance News

The insurance community received big news last week as ACE Ltd announced that it would acquire Chubb in a deal expected to close in early 2016. Chubb is IBAT Financial Services’ lead carrier for community bank business, and we’ve enjoyed a solid relationship with Chubb since 2008 when the IBAT Bond Trust business was largely transitioned to Chubb.

We’re excited about the news and believe that the resulting company, to retain the name of Chubb, will continue to be a strong partner for IBAT and IBAT FS.

84th Legislative Session

For those unable to participate in last week’s end-of-session webinar, the audio presentation is available here. Additionally, the accompanying slide presentation can be accessed here. A special thanks to Texas Banking Commissioner Charles Cooper and IBAT General Counsel Karen Neeley for their participation. We encourage anyone who hasn’t already reviewed this information to take a few minutes to do so. The webinar covered a variety of issues and bills from the 84th Texas Legislature that may impact your bank.

Lastly, Karen Neeley’s legislative white paper is now available. This is a comprehensive overview of all things legislative that could affect you, your bank and your customers. Please note the majority of bills passed this session go into effect on September 1, 2015.

Cybersecurity Assessment Tool

The Federal Financial Institutions Examination Council (FFIEC) issued a cybersecurity assessment tool to help financial institutions evaluate their risks and cybersecurity preparedness. Office of the Comptroller of the Currency (OCC) examiners will begin to incorporate this tool into examinations for banks of all sizes to benchmark and assess bank cybersecurity efforts.

This new tool will help both banks and examiners determine a bank’s inherent risk profile and level of cybersecurity preparedness. Results will be used to determine if a bank’s cybersecurity maturity level aligns with its inherent risk profile.

Additional information about this cybersecurity assessment tool can be found here. Mark your calendar for Financial Education's and IBAT’s webinar on how to use the newly released FFIEC cybersecurity assessment tool on July 20, 2015, or you can register to receive the archived webinar. Register and find additional webinar information

Baker Market Update: July 6, 2015

It looks like the Bureau of Labor Statistics is taking a page out of the Treasury Department’s playbook. If the Treasury can arbitrarily change whose face is on the ten-dollar bill, the BLS has apparently decided it can make the first Friday of July fall on a Thursday. What’s happened to this nation’s time-honored traditions!? Well, the BLS gets a pass on this one since Independence Day is this Saturday and markets are closed tomorrow, so their first-Friday-of-the-month jobs report hit the newsstands this morning. Taking a hit right off the bat was last month’s report.

The originally reported 280k new jobs created in May actually turned out to only be 254k. This morning’s report tells us that 223k new jobs were created in June, but the market was expecting more. So how is it that the Unemployment Rate fell by .2% to a new, low 5.3%? Well, because the Labor Force Participation Rate fell by even more. The new rate of 62.6% was 62.9% a month ago. That’s one way to get the Unemployment Rate down.

Read more in the Baker Market Update.

Flood Rule

In a joint rule, the regulatory agencies implemented provisions of the Homeowners Flood Insurance Affordability Act of 2014 (HFIAA) related to requiring escrow for flood insurance payments and exempting certain detached structures from the mandatory flood insurance purchase requirements.

Lenders with assets of $1 billion or more are required to escrow both flood insurance premiums and fees for loans secured by residential improved real estate or mobile homes and that are made, increased, extended or renewed on or after January 1, 2016. They also must provide borrowers with covered loans outstanding as of January 1, 2016 the option to escrow flood insurance premiums and fees. The final rule includes new and revised sample notice forms and clauses regarding the escrow requirement and option to escrow.

Structures that are part of a residential property but are detached from the primary residence and do not serve as a residence are exempt from the flood insurance requirement. The rule clarified that “serve as a residence” is based upon a good faith determination that the structure is intended for use or is actually used as a residence. However, under HFIAA, lenders may require flood insurance on the detached structures to protect collateral.

The rule also implements provisions of Biggert-Watters Flood Insurance Reform Act of 2012 about the force placement of flood insurance when homeowners’ policies lapse or are insufficient. The force-placement provisions clarify that lenders have authority to charge a borrower for the cost of force-placed flood insurance coverage beginning on the date that the borrower’s coverage lapses or becomes insufficient and stipulates the circumstances under which a lender must terminate force-placed flood insurance and refund payments to the borrower.

IBAT Career Center

Are you looking to add new members to your team? Between today and July 31, enjoy 20% off the posting of job openings in the IBAT Career Center. To receive the discount, log in to the Career Center and enter discount code “SUMMER20” at checkout. 

In addition to receiving 20% off, we’ll highlight your job posting in the month ahead. When open positions at IBAT member banks are posted in the IBAT Career Center, they will be featured in the Bottom Line


In a case involving the allocation of housing tax credits in predominantly black and predominantly white neighborhoods by the Texas Department of Housing and Community Affairs, the United States Supreme Court held that “disparate-impact claims are cognizable under the Fair Housing Act.” Although this case didn’t involve fair lending, it would be difficult to distinguish the court’s ratification of disparate-impact theory of liability in fair housing cases from its current use by regulators in fair lending.

“It has been a long road to a Supreme Court opinion on the disparate-impact theory,” said IBAT President and CEO Chris Williston. “We thank Texas Attorney General Ken Paxton and his predecessor Greg Abbott for recognizing the importance of this issue and taking it to the highest court in the land. Although the court approved the use of disparate-impact, it didn’t approve the regulators’ flawed statistical analyses and application of the theory on community banks. IBAT will continue to fight for appropriate fair use of this theory on the community banks of Texas.”

Tax Bills Summary

IBAT has historically engaged an outside lobbyist to keep up with the abundant tax bills and actions at each session of the Texas Legislature. This session, we engaged James LeBas, a tax expert and one of the architects of the margins tax.

For those of you who have an interest, James has provided a detailed summary of all of the tax bills passed this session for your review.

Our customary Legislative White Paper is in final edit and will be made available to the membership in electronic format very soon.