Bitter Frosting on a Poisonous Cake

Last week, the National Retail Federation and other retail groups filed a petition asking the United States Supreme Court to take up the ongoing case regarding the Federal Reserve’s rule implementing the Durbin interchange amendment of the Dodd-Frank Act. 

You’ll recall that the Fed’s rule was struck down in a July 2013 ruling, which determined that the agency set the cap on debit card transaction fees too high by taking into consideration factors outside of the statutory guidelines.  In March, a D.C. Circuit Court of Appeals overturned that decision, siding with the Fed.

“While fully anticipated, IBAT is disappointed that this ‘attorney annuity’ continues to be litigated,” said Chris Williston, IBAT President and CEO. “The Durbin Amendment is bitter frosting on the poisonous cake that is Dodd-Frank.  We are hopeful that reason will prevail if and when the Supreme Court reviews this matter, but would very much prefer for Congress to address and correct this and other damaging sections of Dodd-Frank in an expeditious manner.”

Call to Action

As reported earlier in the month, IBAT President and CEO Chris Williston has put out a call to action to all community bank employees, directors and shareholders to sign an ICBA-initiated petition calling for a simplification of the quarterly call report. Specifically, the petition requests the regulators consider allowing well capitalized community banks to submit the call report short form at the end of March and September. More than 10,000 community bank supporters across the country have stepped up to participate in the petition thus far, but further participation is needed.

“Federal regulators are under the false assumption that the banks’ core processing systems automatically prepare the call report,” Williston said. “They are astounded when they learn that it is taking community bank personnel hundreds of hours to complete the work each year.”

Williston noted that the standard call report for credit unions is only 25 pages long, while the bank call report has swelled to 80 pages, requiring a 600 page set of instructions to complete.

IBAT thanks all those who have already signed the petition. We especially thank H.L. “Buddy” Baker and the board of directors of the First National Bank of Lake Jackson, for their resolution in support of the IBAT and ICBA petition.

Baker Market Update: Aug. 25, 2014

Late summer is upon us, the kids are heading back to school, and the baseball pennant races are heating up. There are two sets of protagonists in particular that are headed for a major showdown, and it’s got nothing to do with Milwaukee vs. St. Louis. The clash between the Yellen Doves and the Plosser Hawks in the Central Bank League is shaping up to be a classic confrontation that may make all the other rivalries look tame. The release [last] week of the most recent FOMC minutes shows that oddsmakers can no longer ignore the growing momentum of the surging Hawks as they point to improving economic performance and growing threats of asset bubbles as reasons to dethrone the Doves and Ms. Yellen’s easy-money style. While still outnumbered, the scrappy Hawks seem to be slowly bringing in a few converts off the bench.

Read more in the Baker Market Update.

TAG Conference

We're very excited that The Advisory Group (TAG) is bringing their annual conference to San Antonio September 14-17, 2014!

There is much excitement surrounding this year’s conference, especially the speakers who have signed up to run the education sessions. Many of the presenters will lead discussions around branch transformation, managing operational complexity and successful technology deployment and implementation. One of IBAT’s own members, Gene Erwin, SVP Retail Banking from Guaranty Bank & Trust, will host a branch transformation session, A New Approach to Customer Service.

The conference is a great opportunity to preview the latest industry technologies, get up to speed on industry trends and network with your peers and Diebold team members.

Learn more about the conference and register today!


In a recent advisory, the Financial Crimes Enforcement Network (FinCEN) provided instruction to U.S. financial institutions on promoting a culture of BSA/AML compliance. The suggestions stemmed from recent enforcement actions, from which FinCEN gleaned recurring themes for banks’ consideration, and included:

  • Involve bank leadership: Create tailored BSA training for the institution’s leaders and ensure they set the right tone by supporting BSA/AML training for all employees.
  • Don’t compromise compliance for revenue: Make sure your compliance staff have sufficient authority and autonomy to do what’s right for the institution.
  • Share information throughout the organization: There is information in various departments of a financial institution that may be useful and should be shared with compliance staff.
  • Invest in compliance: Leadership should invest in the human and technological resources necessary to support BSA/AML compliance.
  • Test your program: Subject your program to testing by an independent and competent party.
  • Understand how BSA reports are used: Better understanding enables better reporting.

Click here to download the full advisory article. To see IBAT's schedule of upcoming BSA/AML cluster programs, click here.

Clay Shoot Events

IBAT Leadership Division Regions 10 and 2 are hosting sporting clay events on August 27 and August 28, respectively. These events are organized to help community bankers network at the local level and to help raise funds for IBAT's Legislative Fund in order to continue the fight in Washington.  

Both events are open to bank employees, directors and sponsors. If you are not interested in attending the clay shooting part of the events, you are welcome to attend the networking and dinner portions of the day.

We hope you can join us in Region 10, Region 2, or both!

The New FICO Score 9

Earlier this month FICO announced that the new FICO® Score 9 introduces a more nuanced way to assess consumer collection information, bypassing paid collection agency accounts and offering a sophisticated treatment differentiating medical from non-medical collection agency accounts. The intent is to ensure that medical collections have a lower impact on the score, commensurate with the credit risk they represent. FICO’s press release says that these enhancements help lenders because they result in greater precision.

"Unfortunately, the release of a new FICO scoring model does not automatically result in a change of credit scores for the consumer when they go for a loan. The lender must also use the new FICO model,” said Eddie Johansson, President of Credit Security Group and instructor in IBAT’s Teach the Teacher Program™ and Teach the Lender Program™.

"The only scoring model that matters to the borrower is the one their lender is using. And most lenders are not using the latest FICO model now. In the mortgage loan industry, the major factor is the model Fannie Mae and Freddie Mac use. Both currently use models that are ten years old or older - several generations behind FICO's most recent release,” Johansson added.

New Leadership at TDSML

New leadership was ushered in last week at the Texas Department of Savings and Mortgage Lending (TDSML). Nearly 150 savings executives and industry practitioners gathered in Austin to celebrate the tenure and service of retiring TDSML Commissioner Doug Foster and to welcome new Commissioner Caroline Jones.

The Independent Bankers Association of Texas (IBAT), Texas Bankers Association (TBA) and the Texas Mortgage Bankers Association (TMBA) jointly sponsored a reception in their honor at the Austin Club. Foster was presented with a quilt embroidered with all the names of the state savings banks as well as a resolution commending him for his public service. “IBAT has enjoyed working with Commissioner Foster and we congratulate Ms. Jones on her appointment,” said IBAT President and CEO Chris Williston. “Commissioner Jones will be an asset to the regulatory system in Texas,” he added.

Jones will make her first formal appearance and introduction to the IBAT membership at IBAT’s 40th Annual Convention in Fort Worth in late September, as part of the State Bankers Regulatory Roundtable.

Baker Market Update: Aug. 18, 2014

Slack in the labor market? Well it didn’t take long to fill that little civil service posting in Iraq. In fact, that Prime Minister position got filled before it was even vacant. Job seekers, however, need not despair just because that plum job is no longer available. We learned this week that job openings in the U.S. as measured by the BLS have risen to their highest level since 2001. The Job Openings and Labor Turnover (JOLTs) report revealed this week that the number of job openings rise to 4,671k in June, up from 4,577k in May. Job openings tend to increase when economic performance is stout and expectations are high. Okay.

Read more in the Baker Market Update.

IT Security Summit

The 2014 IT Security Summit is coming up on August 21 in Dallas. IBAT’s IT Security Summit is designed for CEOs, COOs, security officers and anyone responsible for risk management of a community bank’s information technology department.  Speakers will cover the hot topics facing community banks’ IT departments from a banker viewpoint and the regulatory issues of the IT exam.

Summit topics include:

  • Cybercriminals Targeting Community Banks - Who, How And Why;
  • Are Your Business Continuity and Disaster Recovery Programs Behind the Times?; and

Addressing Security Challenges with M&A Activity and Your Supply Chain.

The Texas Independent Banker

IBAT is pleased to announce a development in the life of our landmark publication, The Texas Independent Banker magazine.

Earlier this year, IBAT engaged Naylor, LLC, to publish the magazine beginning with the January/February issue next year. Naylor will assist us in re-envisioning a print publication for the twenty-first century Texas community banking industry, while maintaining the right balance between informative resource articles and reporting on the activities of IBAT and its members. Naylor will also take responsibility for the sale of advertising in the publication.

We believe you’ll find the publication consistent with IBAT’s full slate of member communications and we look forward to sharing our work with you in early 2015. Stay tuned for more in the weeks ahead.

40th Annual Convention

IBAT's 40th Annual Convention will be underway next month. If you haven't already registered, now is the best time to do so - the early bird deadline is coming up this Friday, August 15th

This year in Fort Worth, September 27-30, you can expect great educational sessions, fabulous keynote speakers and a variety of opportunities to contribute to the IBAT PAC, all while celebrating IBAT's 40 years of existence.

Register online here. To learn more, download the Convention brochure.