Comment Letter Filed

In its comment letter to the FCC, IBAT supported the American Bankers Association’s petition by requesting that the FCC exempt four categories of messages sent by financial institutions from the Telephone Consumer Protection Act of 1991 that autodialed messages, text messages and prerecorded messages placed on landline phones be sent with prior consent.

Briefly, the four categories are:

  1. fraud/identity theft,
  2. security breaches,
  3. steps to prevent or remedy security breaches, and
  4. actions needed to arrange for receipt pending money transfers.

As explained in the letter, exempting banks from these four categories will reduce burdens on banks, increase consumer protections and reduce privacy and security risks.

IBAT Career Center

Are you looking to add to your team in late 2014 or early 2015?  Consider posting in the IBAT Career Center between now and the end of 2014 and save 25% on your job posting with use of the coupon code “YEAREND14.”  Jobs posted in the IBAT Career Center are open for viewing from all Texas financial institutions as well as employees of IBAT’s 200+ Associate Members. 

In addition to the discount, IBAT staff is planning significant promotion of the Career Center between now and 2015 so traffic should be even higher than usual.   If you have questions about the Career Center or need assistance in purchasing your posting, please contact Christopher Williston at 512-275-2208 or clwilliston@ibat.org.

Baker Market Update: Dec. 8, 2014

Help me remember. Is it “slack” in the labor force that so worries Janet Yellen, or “slackers” in the labor force? Well, either way, she’s got a bit less to worry about after the release of this morning’s jobs report from the Bureau of Labor Statistics. Market participants learned this morning that employers added 321k to Non-Farm Payrolls last month along with an upward revision of the prior month’s total to 243k from 214k. Last month’s job growth, the largest since January 2012, came as an early Christmas present to experts expecting to only see 230k new jobs. Despite the unexpectedly high level of job creation, the 5.8% Unemployment Rate and the 62.8% Labor Force Participation Rate remained unchanged. Nearly unchanged, unfortunately, were earnings. Average Hourly Earnings rose by a miserly .37% for the month, and 2.1% year-over-year. That’s the kind of slack that is still troubling to Ms. Yellen.

Read more in the Baker Market Update.

TX Leadership in D.C.

Texans are playing an increasingly significant role in shaping policy for our industry and our nation. Senior Senator John Cornyn was recently named Majority Whip, the number two most powerful position in the Senate.

In addition to the reappointment of Congressman Jeb Hensarling as Chairman of the Financial Services Committee, several other Texans will head up important committees for the upcoming 114th Congress. Retaining their chairs are Michael McCaul (Homeland Security), Pete Sessions (Rules) and Lamar Smith (Science, Space and Technology). Newly appointed Chairmen include Mike Conaway (Agriculture) and Mac Thornberry (Armed Services).

“Texas members continue to make a significant impact in Washington, D.C., and we are obviously pleased that such qualified and dedicated Texans have earned these positions,” said Chris Williston, IBAT President and CEO. “We extend our hearty congratulations to each of these impressive individuals, and look forward to working with them and their colleagues to move meaningful community bank regulatory reform forward on a timely basis."

De Novo News

After years of stagnation in new bank charters due in part to stringent requirements set by the Federal Deposit Insurance Corporation (FDIC), the regulator softened expectations in a recent document clarifying chartering policy.

The document, which was released at the FDIC’s advisory committee on community banking, clarified that:

  • New charters must retain an 8% tier 1 leverage ratio for the first three years of operation, not seven years. This applies to applications displaying a “traditional risk profile” and the FDIC could seek a higher level of capital for proposals with heightened risk and complexity. 
  • Applicants are required to detail their business plan for the first three years of operation, not seven years.

According to reporting by American Banker, officials at the meeting “also highlighted a change eliminating the requirement for FDIC-supervised state banks to seek approval to engage in activities through limited liability companies.”

The document said the FDIC also “strongly encourages” meetings between regulators and potential applicants before formal filings, in the interest of setting regulatory expectations and “promot[ing] open communication.”

Comment Letter

Last week IBAT filed comment on the Department of Defense’s proposed changes to the Military Lending Act (MLA), which would extend the protections of the Act to a broader range of closed-end and open-end credit products including consumer installment loans, unsecured open-end lines of credit and credit cards.

In the letter, IBAT President and CEO Chris Williston expressed concern that the proposed rule will simply reduce credit products offered by insured banks and will have the unintended consequence of affecting a number of products that are not of concern to the Department. For this reason, IBAT proposed exempting insured depository institutions completely from newly proposed limitations of the MLA.

Williston outlined concerns in proposed restrictions on refinancing and modifications, on access to bank accounts for payment or security, and on the ability for interest rates to be changed – even if they are being lowered. He also articulated IBAT’s belief that compliance with the changes would result in unnecessary regulatory burden with which many community banks simply cannot comply, thus resulting in further limits of credit availability.

The comment period closed on November 28, 2014.

Card Wars

Late last week, PULSE filed suit in a Houston federal court against Visa, citing many antitrust violations including monopolization of the debit network services market.

The PULSE suit is based on Visa's actions since the enactment of the Durbin amendment as part of the Dodd-Frank legislation in 2010. Besides restricting bank interchange fees, Durbin was intended to enhance competition among debit networks. PULSE maintains that Visa launched several anti-competitive initiatives in response including the establishment of a fixed-acquirer network fee and a PIN-authenticated Visa debit mandate. As a result, network fees paid by merchants have risen and competition has been thwarted.

"PULSE does not resort to litigation lightly," said PULSE President and CEO David Schneider. "Through this lawsuit, PULSE hopes to restore competition to the market."

Schneider assured PULSE participants that the lawsuit will not impact PULSE's day-to-day business with Visa.


Baker Market Update: Dec. 1, 2014

Once again, Black Friday is upon us and everything is on sale. Everything! That’s right, Uncle Jed, even Black Gold. Despite the Thanksgiving holiday for America’s financial markets, the rest of the world was open for business. And for those in the oil business, not many were thankful for OPEC’s decision yesterday to maintain current production levels. The cartel’s decision not to support the crude oil market by curtailing output sent crude oil prices tumbling yesterday. The plunge in domestic prices to below $70/barrel is a reprise of market levels not seen in over four years. The good news for consumers is that the less they are required to spend on energy, the more they’ll have available to spend on video games. Thank you OPEC!

Read more in the Baker Market Update

Cybersecurity Seminar

Texas community bank CEOs, directors and other officers are encouraged to participate in "Executive Leadership of Cybersecurity (ELOC) – Taking the Fear Out of Cyber Threats." This event is designed for CEOs and directors who have focused their careers on the non-cyber aspects of banking to help them manage one of today’s most challenging aspects of bank risk management. Too often cybersecurity is fully delegated to operations personnel, but the changing world requires that everyone at a CEO and board level take a proactive role in understanding and managing cyber risk.

IBAT, TBA, SWACHA, law enforcement, and both federal and state banking regulators have partnered to bring this overview of cyber threats to the banking industry on December 3, at the Hilton Austin Airport Hotel. The deadline to secure the discounted hotel rate ($139/night) is November 5. A full brochure, registration information and other details can be found here. Seven hours of continuing education with the Texas Board of Public Accountancy will be given to attendees. 

Happy Thanksgiving!

Thanksgiving is a time to reflect on our many blessings. Your IBAT team considers it a great privilege to work to advance a great industry that does so much for so many. We are blessed with your continued support and friendship.

On behalf of the officers, directors and staff of IBAT, we wish you and your family a very safe and happy Thanksgiving surrounded by family and friends.

Your IBAT offices will be closed on Thursday, November 27 and Friday, November 28 and will resume normal business hours on Monday, December 1.

Compliance Video

The FDIC released the first in a series of videos to help banks comply with CFPB mortgage rules. The initial video - divided into nine segments - addresses Ability-to-Repay and Qualified Mortgage Rule. The video is aimed at compliance officers and bank staff and addresses determination of ability to repay, QM presumptions, establishing QM status, charges counting toward QM points and fees cap, non-QM and QM supervisory expectations, and building an ATR/QM compliance management system. The individual segments, which can be watched separately, vary in length from just under 3 minutes to nearly 14 minutes and total about 65 minutes.

Two additional videos focusing on the rules concerning mortgage servicing and loan originator compensation will be released in the upcoming months.

And don’t forget that IBAT has created a webpage devoted to the CFPB mortgage rules and has several Legal Ease Q&As dealing with CFPB mortgage rules (enter CFPB in the search box).

Texans in Key Roles

As expected, Texas Congressman Jeb Hensarling will continue to serve as Chairman of the House Financial Services Committee. Additionally, Chairman Hensarling has named Texas Congressman Randy Neugebauer to serve as Chairman of the critically important Financial Institutions and Consumer Credit Subcommittee. Finally, Texas Congressman Roger Williams was appointed to the Financial Services Committee.

“We are so pleased to have Texans in these key roles on the jurisdictional committee dealing with the vast majority of community banking issues,” said Chris Williston, IBAT President and CEO. “All of these gentlemen ‘get it.' They understand the importance of community banking as well as the challenges we face. We look forward to working with these members and a multitude of others to effect meaningful - and long overdue - changes as quickly as possible in the new Congress.”

ICBA Webinar Recording

By now, you’ve most likely seen the abundance of research about millennials and their banking preferences. Hint: the majority distrust big banks and value a personal relationship at a locally owned bank. Check out Reaching Millennials and Reaching Gen Y as a refresher.

To help community banks capitalize on the opportunity to win the millennial generation - which currently encompasses 80 million Americans and will represent approximately $200 billion in buying power by 2017 - ICBA hosted the “Must-Know Millennials Research for Community Banks” webinar last week. If you would like a better understanding of this new generation of community bank customers, including how to win over potential customers, a recording of the webinar is available for free here.

Week in Review: Nov. 24, 2014

With all the talk about executive actions these days, the nation’s makers of monetary policy might want to consider how such an approach could fit into a macro-economic application. It seems that patience is growing a bit thin among those clamoring for more inflation. Unprecedented efforts by the central bankers to ignite aggregate demand have not, in the eyes of many, been successful. Clearly, the system is broken. There are lots of observers out there that think that inflation has had plenty of time to get to the 2% level desired by the FOMC and the time for waiting is over. The Fed should just order the inflation rate to rise. While such a step might seem heavy-handed to some, others maintain that it would be well within the scope of Chairwoman Janet Yellen’s power.

Read more in the Baker Market Update.