Around the Industry 2016

Wheels of Joy—Every year employees at Grand River Bank in Grandville, Mich., led by its president, Liz Bracken, supports a campaign to provide a new bicycle to every child in a chosen neighborhood for the Christmas holiday season. The nonprofit Elves & More West Michigan campaign, for which Bracken serves as president, has given away more than 12,000 bicycles. Last year more than 300 volunteers helped assemble and deliver about 1,800 bicycles, which included help from local police and fire officials.

Wheels of Joy—Every year employees at Grand River Bank in Grandville, Mich., led by its president, Liz Bracken, supports a campaign to provide a new bicycle to every child in a chosen neighborhood for the Christmas holiday season. The nonprofit Elves & More West Michigan campaign, for which Bracken serves as president, has given away more than 12,000 bicycles. Last year more than 300 volunteers helped assemble and deliver about 1,800 bicycles, which included help from local police and fire officials.

Strap in for ICBA’s Convention Keynote Speakers

High-adrenaline keynote speakers are gearing up for Community Banking LIVE in San Antonio, from March 15–19.

Twin brothers Mark and Scott Kelly will talk about their remarkable parallel careers with NASA and the U.S. Navy, including their involvement in groundbreaking experiments about how space affects the human body that are important to the future of space travel and exploration. Also, Carey Lohrenz, the first female F-14 Tomcat fighter pilot in the U.S. Navy, will discuss what she has learned while flying fast-paced military missions, where the mastery of fundamentals and consistent execution are essential.

Both presentations will offer invaluable insights on extraordinary leadership, teamwork and accomplishment.

For the latest on the convention, visit www.icba.org/convention2017.

OCC to Open an Office of Innovation

The Office of the Comptroller of the Currency is establishing an office to address responsible innovation and implement a formal framework to improve the agency’s ability to identify, understand and respond to financial innovation affecting the federal banking system.

The new Office of Innovation will be a clearinghouse for requests and information about innovation. It will help community banks with their third-party due diligence and monitoring of FinTech partners. The OCC expects the office to begin operations early next year.

USDA Launches Streamlined Guaranteed Loans

The USDA launched a streamlined version of its guaranteed loan program for smaller-scale farms and urban producers. The EZ Guarantee Loans program uses a simplified application process to help beginning, small, underserved and family farmers and ranchers apply for loans of up to $100,000 from USDA-approved lenders.

ICBA supports streamlined loan programs to reduce lender paperwork. For more information, visit www.fsa.usda.gov/farmloans.

Service with Smiles—ICBA Bancard staff members celebrate National Customer Service Week in Washington, D.C.

Service with Smiles—ICBA Bancard staff members celebrate National Customer Service Week in Washington, D.C.

ICBA Bancard & TCM Bank Join National Customer Service Week

“Excellent customer service has always been a hallmark of community banking,” said Tina Giorgio, president and CEO of ICBA Bancard, ICBA’s payments service corporation for community banks. As a former community banker, Giorgio would know.

For nearly 20 years, she worked at Sandy Spring Bank in Maryland, where she most recently oversaw deposit operations and digital delivery. Attention to customer care was always a priority at the $4.7 billion-asset community bank, as was the bank’s tradition of participating in National Customer Service Week to celebrate the work of its frontline staff.

When Giorgio joined ICBA Bancard this year, she wanted to continue the activity. So from Oct. 3 to 7, for the first time, ICBA Bancard and its wholly owned subsidiary, TCM Bank, participated in the nationwide event.

ICBA Bancard kicked off the celebration by passing out bags stuffed with treats for staff members who serve the credit, debit and electronic payment needs of community banks nationwide. Throughout the week, employees received notes of appreciation acknowledging their hard work, and they capped off the week with a pizza party.

ICBA members were also invited to join the fun. Community bankers were encouraged to email ICBA Bancard or send tweets to the @ICBA handle, with descriptions and pictures of their activities, for the chance to win a pizza party for their staff.

ICBA received submissions across the country, but M&P Bank, headquartered in Newport, Ark., was named the winner thanks to its creativity, focus on the tenets of excellent customer service and its use of social media.

Tara Salinas, vice president of marketing and business development for M&P Bank, says this year was the first time M&P has participated in National Customer Service Week. “We typically have an annual employee appreciation week where we recognize each other’s strengths, but we’d never focused specifically on customer service,” she said. “Since this skill is so vital to the success of our organization, it made sense to spend a week applauding the folks who support our customers.

“We will absolutely make celebrating National Customer Service Week an annual tradition.”

For more information about National Customer Service Week, including how to participate next year, visit the International Customer Service Association’s website at www.nationalcustomerserviceweek.org.

Fine Among ‘Most Influential’ Advocates—Again

For the eighth year in a row, The Hill newspaper named ICBA President and CEO Camden Fine one of the most influential industry advocates working in Washington, D.C. Serving as ICBA’s chief executive since 2004, Fine, a former community banker, has been recognized with the honor every year since 2008.


Giving Their Time—A public service campaign conducted by the state of Iowa honored First Citizens Bank in Mason City, Iowa, and its employees for donating more volunteer hours than any other medium-size business in the Hawkeye State. During a two-month period this year, the bank’s employees provided more than 1,420 volunteer hours to communities in northern Iowa, making the bank a statewide winner of the 2016 Give Back Iowa Volunteer Challenge. Above, Iowa Governor Terry Branstad and Iowa Lieutenant Governor Kim Reynolds help present a certificate of recognition to several of the bank’s executives and staff members.

Giving Their Time—A public service campaign conducted by the state of Iowa honored First Citizens Bank in Mason City, Iowa, and its employees for donating more volunteer hours than any other medium-size business in the Hawkeye State. During a two-month period this year, the bank’s employees provided more than 1,420 volunteer hours to communities in northern Iowa, making the bank a statewide winner of the 2016 Give Back Iowa Volunteer Challenge. Above, Iowa Governor Terry Branstad and Iowa Lieutenant Governor Kim Reynolds help present a certificate of recognition to several of the bank’s executives and staff members.

ICBA Taps Northeast Region Representative

Loughlin Cleary has joined ICBA as a vice president of member relations for the Northeast region. He will serve the membership needs of community banks in Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.

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Cleary brings more than 20 years of financial services experience to ICBA. He most recently served as a strategic account manager for the technology services firm FIS Global in Jacksonville, Fla., where he assisted community banks. He also worked more than 15 years at the Federal Home Loan Bank of Boston, where he helped community banks increase revenue and manage interest-rate risk.

Federal Reserve Reviews Faster-Payment Operational Models

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Two national task forces formed by the Federal Reserve have started evaluating 19 specific operational models proposed by organizations across the payments industry to speed payments in the United States.

One task force is focused on faster payment capabilities, while the other is working to enhance payment system security, the Federal Reserve reported. The task forces, which include several ICBA leadership community bankers as participants, plan to release a report discussing those special proposals, including recommendations on possibly implementing them, by next June.

Court Finds CFPB Structure Unconstitutional

A federal appeals court ruled that the Consumer Financial Protection Bureau’s single-director structure is unconstitutional. The court also gave the president more responsibility to directly oversee the agency’s actions.

In the case PHH v. CFPB, the U.S. Court of Appeals for the D.C. Circuit, affirming a policy position ICBA has long held, said the CFPB’s structure concentrates “enormous executive power” in a director who cannot be removed except “for cause.” Consequently, the court struck a provision in the Dodd-Frank Act to allow the president to dismiss the CFPB director at will.

The ruling by a three-judge panel involved nonbank mortgage lender PHH’s appeal a decision by CFPB Director Richard Cordray in June 2015. Cordray increased a $6 million fine against PHH to $109 million. An administrative law judge set the original fine for a violation of the Real Estate Settlement Procedures Act.

The court also determined that the CFPB violated PHH’s due process rights by retroactively applying a new regulatory interpretation.

The ruling does not invalidate past CFPB decisions. The bureau is expected to appeal the court’s decision. ICBA supported PHH’s case in court in a 2015 joint amicus brief.

ICBA has long advocated replacing the CFPB’s single-director governance with a five-member commission, a provision included in the association’s Plan for Prosperity legislative platform that has passed the House of Representatives. Even with the court’s ruling, ICBA said the legislation is still needed to establish a CFPB commission to foster more effective and non-partisan consumer regulation.

Notable Quotes

On Wells Fargo’s account-opening scandal …
“Community bankers have seen time and time again how the consequences of megabank misdeeds rain down hardest not on the perpetrators, but on us! No, no, no—not again. We will not get dragged into this mess! Community banks are NOT Wells Fargo!”
—Cam Fine, ICBA president and CEO

“Fraud is fraud and theft is theft. What happened at Wells Fargo over the course of many years cannot be described any other way. In fact, a whole host of federal laws were potentially violated, including the Truth in Savings Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Electronic Fund Transfer Act, the Securities Act of 1933, the Securities and Exchange Act of 1934, and the Sarbanes-Oxley Act of 2002. …  And let me be clear: Today’s hearing is just the beginning of our investigation, not the end.”
—Rep. Jeb Hensarling (R-Texas), U.S. House Financial Services Committee chairman

“But you squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket. This is about accountability. You should resign, you should give back the money you took while this scam was going on, and you should be criminally investigated.”
—Sen. Elizabeth Warren (D-Mass.), U.S. Senate Banking Committee member


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Defense Department Clarifies Military Lending Act Rules

The U.S. Defense Department has issued an interpretative rule providing answers to certain compliance questions regarding Military Lending Act regulations. The interpretation addresses several topics, including consumer-scheduled payments and providing generic oral disclosure of covered borrowers’ payment obligations.

ICBA has long encouraged the department to clarify several aspects of the rule.

Beginning Oct. 3, financial institutions should determine the military status of all of their applicants for many forms of consumer credit as a requirement under the Military Lending Act’s regulations. Financial institutions that check the military service backgrounds of borrowers by using the government’s Defense Manpower Data Center database or by obtaining military-status information from one of the three national credit-reporting agencies will receive a regulatory safe harbor protection.

On Compliance Watch

Is your community bank ready for the Oct. 3 implementation of the revised Military Lending Act rules?

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Source: ICBA NewsWatch Today poll, September 2016

Few Entities Are Satisfied with CFPB Review Panels

The Consumer Financial Protection Bureau is meeting its obligations to consult small entities during its rulemaking process, but a sampling of these representatives shows few are satisfied with the bureau’s final rules.

The CFPB is required to convene small-business review panels to receive input on rulemakings that are expected to have a significant economic impact on a substantial number of small entities.

However, in interviews with 57 “small entity representatives,” including community bankers, who participated in CFPB panel discussions, the Government Accountability Office found that just seven were satisfied with the agency’s final rules.

According to the GAO’s analysis, 13 respondents said they felt the CFPB treated the review process as a formality, 15 indicated the bureau did not appear to consider their input in the rulemaking process, and one-third suggested that devoting more time to the process would improve it. Respondents also expressed concerns that the CFPB is not sufficiently knowledgeable about the industries it is regulating and that the panel discussions were too brief to discuss all of the participants’ potential concerns.

ICBA staff members were interviewed for the study and echoed community banker concerns that the panels seemed to be check-the-box exercises and that the bureau generally did not make any meaningful changes in its proposed rules based on input provided by the panels.

Talking with the Chiefs

Community bankers serving on ICBA’s Regulation Review Subcommittee gathered in Washington, D.C., last month to discuss current regulatory issues and concerns with federal agency officials, including the state of the examination environment. Right, the ICBA leaders meet with FDIC Chairman Martin Gruenberg (far right) at ICBA’s headquarters. The committee members also visited with Federal Reserve Board representatives and Comptroller of the Currency Thomas Curry.

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Supporting Fitness and Fun—Treynor State Bank in Treynor, Iowa, donated $100,000 toward the construction of a local community sports complex. The bank gave away the funds to celebrate its earning of the highest-ranked return on average equity and return on average assets of any Subchapter C corporation community bank in Iowa for the past seven years in a row.

Above, from left, are Travis Castle, Scott Reelfs, Norm Collins and Doug Wehring, volunteer leaders of the Vision Treynor Group, a local community nonprofit group overseeing the construction of the sports complex, as well as Mick Guttau, chairman of Treynor State Bank’s holding company.

ICBA Events

Oct. 23–28
Certification: Commercial Lending Institute
Phoenix

Nov. 9
Webinar: Unique Issues to Mutual Community Banks

Nov. 14–15
seminar: Community Bank Chairman’s Forum
Napa, Calif.

Nov. 15
Webinar: The Dark Web: Managing Cyber Risks and Preventing Incidents

Nov. 16
Webinar: Innovation: How to Create an Innovative Culture and Environment

Nov. 22
Webinar: How to Craft an Effective Commercial
Loan Write-Up


Happy Meals—The First National Bank of Wynne recently hosted several “Breakfasts with Bankers” appreciation events throughout the Arkansas communities the community bank serves. Part community social occasions and part recognitions, the breakfast events have been hosted for local teachers, police officers and firefighters. Above, First National Bank employees share a meal and visit with youth involved in a mentoring program through the local Boys and Girls Clubs of Cross County.

Happy Meals—The First National Bank of Wynne recently hosted several “Breakfasts with Bankers” appreciation events throughout the Arkansas communities the community bank serves. Part community social occasions and part recognitions, the breakfast events have been hosted for local teachers, police officers and firefighters. Above, First National Bank employees share a meal and visit with youth involved in a mentoring program through the local Boys and Girls Clubs of Cross County.

Federal Reserve’s Expanded Same-Day Schedule Starts

The Federal Reserve Board’s policy changes to its same-day ACH posting of credits and debits take effect this month. The Fed’s new second posting time for forward same-day ACH transactions starts Sept. 23, occurring at 1 p.m. (Eastern time) and adding to the agency’s current 5 p.m. posting time.

The schedule changes were made to accommodate enhancements made to same-day ACH services implemented by the Fed’s regional reserve banks.

All returns of future-dated and same-day ACH transactions will post at the next available posting time or following the settlement of associated forward transactions. The adopted posting times at the Fed will be 8:30 a.m., 1 p.m., 5 p.m. and 5:30 p.m., depending on when an item is received by the reserve banks.

ICBA Bancard elected two new board members. Samuel Vallandingham, president and CEO of First State Bank in Barboursville, W.Va., and Matthew Ruge, executive director of the Missouri Independent Bankers Association, now each serve as directors of the ICBA member payments services corporation.

ICBA Bancard also tapped former community banker Chrystina Giorgio as its president and CEO, replacing longtime executive Linda Echard, who recently retired.

ICBA Securities elected three new board members. Scott Heitkamp, ICBA chairman-elect and president and CEO of ValueBank Texas in Corpus Christi, Texas; Mark Holmes, president and CEP of Cornerstone Bank in Wilson, N.C.; and John Witkowski, president and CEO of the Independent Bankers Association of New York State now each serve as directors of the ICBA institutional portfolio investment management services corporation for community banks.

Hurting Over Health Care

How has the Affordable Care Act affected your community bank’s ability to provide health-care benefits to your employees?

Source: ICBA NewsWatch Today member poll, August 2016

Source: ICBA NewsWatch Today member poll, August 2016

Notable Quote

On Fixing Failed Interchange Price Controls …
“Rolling back debit interchange price controls while bolstering lax
merchant security standards will correct previous policy mistakes while ensuring a safer payments system for American consumers.”

—Cam Fine, ICBA president and CEO

ICBA Events

Sept. 22
Webinar: Capital

Oct. 11–12
Seminar: Advanced IT Strategies Summit
Minneapolis

Oct. 13–15
Conference: Annual Directors Conference
Nashville, Tenn.

Oct. 24–25
Seminar: Call Report Preparation Seminar
Dallas

Oct. 23–28
Certification: Commercial Lending Institute
Phoenix

Oct. 26–27
Conference: Retail Delivery & Branching Strategies Summit
Dallas

Nov. 7–9
Certification: BSA/AML Institute
Dallas


Respect for Everyone—Employees at Clinton National Bank in Clinton, Iowa, recently signed a petition pledging to stand against racism and discrimination wherever it may appear. The petition was part of a recent campaign by the local chapter of the Young Women’s Christian Association, a frequent community service partner with the bank. Many Clinton National officers have served on the YWCA’s board of directors, and the bank makes significant contributions to the nonprofit organization’s annual fundraising efforts.

Respect for Everyone—Employees at Clinton National Bank in Clinton, Iowa, recently signed a petition pledging to stand against racism and discrimination wherever it may appear. The petition was part of a recent campaign by the local chapter of the Young Women’s Christian Association, a frequent community service partner with the bank. Many Clinton National officers have served on the YWCA’s board of directors, and the bank makes significant contributions to the nonprofit organization’s annual fundraising efforts.

CECL Questions Answered
ICBA posted answers to frequently asked questions about the Financial Accounting Standards Board’s new loan-loss standard. The FAQs on the Current Expected Credit Loss standard cover key changes to allowances for credit losses, measurement requirements for loss projections, effective dates and more. To learn more, visit www.icba.org/advocacy.

ICBA Events

Sept. 7
Webinar: Deposit Compliance Update

Sept. 11–14
Conference: LEAD FWD Summit
Denver

Sept. 11–14
Seminar: Bank Security Institute
Minneapolis

Sept. 18–21
Certification: Consumer Lending Institute
Minneapolis

Sept. 22
Conference: Community Bank Marketing Strategies Summit
Minneapolis

Sept. 25–30
Certification: Compliance Institute
Denver

Oct. 11–12
Seminar: Executive Development—The Making of Bank Leaders
Minneapolis

 


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ICBA Events

July 22
Webinar: Introduction to Consumer Lending

Aug. 1–3
Certification: BSA/AML Institute
Denver

Aug. 3
Webinar: Effective Internal Audit and Board Reporting

Aug. 8–12
Seminar: Community Bank IT Institute Minneapolis

Sept. 7
Webinar: Deposit Compliance Update

Sept. 11–14
Conference: LEAD FWD Summit
Denver

Sept. 12–26
Certification: Audit Institute (Week 1)
Minneapolis

Sept. 19–23
Certification: Audit Institute (Week 2)
Minneapolis

Healthy Family Fun—An emergency fire and medical rescue officer with the River Falls Fire Department races with local children during a recent annual family wellness event hosted by First National Bank in River Falls, Wis. For the seventh consecutive year, the bank’s employees—after giving more than 3,000 hours of their time and talents to various community causes and events last year—planned, promoted and ran the wellness event. The event also raised $9,000, which was donated to two local fire departments.

Notable Quote

On Megabank and Community Bank Differences …
“While representatives of the largest financial institutions portray their firms as indispensable to the nation’s banking system, many community banks view the proliferation of these massive firms as a distortion of our market-based economy. The consequences of the 2008 bailout persist years later.

“Allowing the megabanks to keep their profits during the good times while enjoying a federal backstop in times of trouble—a system of privatized gains and socialized losses—incentivizes risky behavior and provides outsized competitive advantages to these institutions.”
—Cam Fine, ICBA president and CEO


Pictured left to right: John Gill, president of Citizens Alliance Bank; Philip Forstrom, chairman of Citizens Alliance Bank; Mark Paulson, administrator of the Chippewa County—Montevideo Hospital; ribbon-cutting-event guests Alvina Munneke, Joan Gaebe and Paul Gaebe; and Gordy Woltjer, superintendent of Chester Construction.

Pictured left to right: John Gill, president of Citizens Alliance Bank; Philip Forstrom, chairman of Citizens Alliance Bank; Mark Paulson, administrator of the Chippewa County—Montevideo Hospital; ribbon-cutting-event guests Alvina Munneke, Joan Gaebe and Paul Gaebe; and Gordy Woltjer, superintendent of Chester Construction.

A Healthier Community—Citizens Alliance Bank in Clara City, Minn., provided the financing for a 3,100-square-foot medical clinic now located within its new headquarters building. The new clinic, operated by Chippewa County—Montevideo Hospital, replaces a community medical clinic that shut down three years ago due to building problems. The new clinic will serve more than 1,360 local residents. “This clinic represents an essential and vital service to the residents of Clara City and serves to enhance the very community that our customers, employees and their families work, live and play,” says John Gill, president of Citizens Alliance Bank.

ICBA Events

June 21–23
Leadership Academy Forum
Memphis, Tenn.

Aug. 1–3
BSA/AML Institute
Denver

Aug. 8–12
Community Bank
IT Institute
Minneapolis

Sept. 11–14
LEAD FWD Summit
Denver

Oct. 4–7
Annual Current Issues/Certification Conference
Minneapolis

Agency Actions
CFPB Plans to Clarify TRID Rule
Consumer Financial Protection Bureau officials are planning to begin a formal process next month to amend certain parts of the TILA-RESPA Integrated Disclosure rule. In a letter to ICBA and other industry trade groups, CFPB officials acknowledged that certain parts of the TRID rule are unclear and they hope to resolve the uncertainties.

The CFPB suggested it would incorporate some of its informal guidance—from webinars, compliance guides and elsewhere—into the regulation text and commentary.

ICBA has long pressed the CFPB to make adjustments and offer clarity on the TRID rule. The bureau’s officials have pledged to meet with ICBA staff and others before amending the rule.

Mobile Services Guidance
The Federal Financial Institutions Examination Council released a new appendix to its Retail Payment Systems booklet on mobile financial services. The booklet contains guidance on determining risks of mobile devices and the adequacy of mobile services controls at banks and third parties. Visit www.ffiec.gov.

Risk Appetite Statement
The Office of the Comptroller of the Currency has released a Risk Appetite Statement setting boundaries of acceptable risk in key areas of agency operations. The agency says its management and employees will use the statement to evaluate their decisions and actions in overseeing national banks and thrifts. Visit www.occ.treas.gov.

Boosting New Banks
The FDIC, following years of ICBA advocacy, reduced from seven years to three years the period of heightened supervisory monitoring of newly formed banks. Do you think this will contribute to more de novo charters?

  • 53% – Somewhat, but the impact will be limited without additional regulatory relief
  • 41% – No, we won’t see a resurgence without further economic improvement/li>
  • 5% – Don’t know
  • 1% – Yes, less stringent oversight will give a needed boost to de novo banks

Source: ICBA NewsWatch Today, April 2016

ICBA Issues Cyber Insurance White Paper
ICBA has published a white paper that provides an overview of cyber insurance for community banks. The white paper, titled “Cyber Insurance and Community Banks: An Introduction,” outlines what it is and is not, how to prepare for the underwriting process, and the types of coverages that may be available to community banks.

Find the white paper on the Cyber and Data Security Resources page under the “Advocacy” section of ICBA’s website, www.icba.org.

IB Distinguished for Excellence
The award-winning Independent Banker just received another publishing recognition for excellence. The magazine is a finalist with 11 other publications, along with Harper’s Bazaar and AARP Magazine, for overall editorial excellence in the prestigious min’s Magazine Media Awards.

The top winner among the finalists for overall editorial excellence will be selected this month.

Notable Quote

On FASB’s changes to CECL accounting standard …
“They’ve made a lot of concessions, and the decisions from the board meeting show that. All these changes will make the new rule scalable for community banks.”
—James Kendrick, ICBA Accounting Policy Expert


This year’s ICBPAC annual auction fundraiser raised a record $536,446!

This year’s ICBPAC annual auction fundraiser raised a record $536,446!

Revisiting ICBA’s National Convention in New Orleans
More than 3,100 community bankers, industry leaders and financial experts gathered together last March at ICBA’s national convention, ICBA Community Banking LIVE®, in New Orleans. Here are a few memories captured in photos.

For recaps of speeches, more images, videos of general session speeches and recordings for sale of workshops at Community Banking LIVE 2016, visit www.independentbanker.org/convention2016.

ICBA Immediate Past Chairman Jack Hartings of Ohio, and ICBA Chairman Rebeca Romero Rainey of New Mexico.

ICBA Immediate Past Chairman Jack Hartings of Ohio, and ICBA Chairman Rebeca Romero Rainey of New Mexico.

Peer-to-peer discussions and networking events abound at the convention.

Peer-to-peer discussions and networking events abound at the convention.

The Expo trade show had 263 companies exhibiting state-of-the-art technology and products.

The Expo trade show had 263 companies exhibiting state-of-the-art technology and products.

This year’s convention offered more than 65 educational workshops and networking events.

This year’s convention offered more than 65 educational workshops and networking events.


From left to right: The Murray Bank representatives Chad Stubblefield, Tony Ryan, Andy Graham and Tim Stark; Jason Lovett, chairman of the Murray-Calloway County Park Board; Ellie Christopher, a Murray-Calloway Park Board member; Jerry Don Smith, The Murray Bank board member; Jean Bennett, a Murray-Calloway Park Board member; Darren Jones, The Murray Bank employee; and Bill Marcum, a Murray-Calloway Park Board member.

From left to right: The Murray Bank representatives Chad Stubblefield, Tony Ryan, Andy Graham and Tim Stark; Jason Lovett, chairman of the Murray-Calloway County Park Board; Ellie Christopher, a Murray-Calloway Park Board member; Jerry Don Smith, The Murray Bank board member; Jean Bennett, a Murray-Calloway Park Board member; Darren Jones, The Murray Bank employee; and Bill Marcum, a Murray-Calloway Park Board member.

Active In The Community
Supporting Local Recreation
The Murray Bank in Murray, Ky., recently pledged to donate $25,000 to help restore baseball fields in the community’s public parks. The donation will pay for new playing turf and fencing, handicap-accessible seating for spectators, a field drainage system and other improvements. Many of the bank’s employees also volunteer their time to coach various local baseball teams.

Member Poll
Lending Lift Ahead?
Loan balances increased by more than 6 percent in 2015, according to the FDIC. Do you expect 2016 loan growth to be higher or lower than 6 percent?

  • 49% – Lower
  • 44% – Higher
  • 7% – Don’t know

Source: ICBA NewsWatch Today poll, February 2016

Member Program
Community Banks Share $3 Million Dividend
More than 1,280 member community banks will share a policyholder dividend totaling more than $3 million for their participation in the Travelers SelectOne ICBA insurance program. The dividend payment, for banks that participated in the program during 2014, marks the 14th consecutive dividend provided to community banks through the member program.

Providing a variety of insurance coverages, the ICBA-Travelers program has generated more than $48 million in policyholder dividends for community banks over the past 30 years.

For more information, visit www.icba.org/psp.

In Washington
ICBA Tells Congress to Stop Unwarranted Credit Union Expansion
When the nation’s community bankers gather for the Washington Policy Summit this month, ICBA will continue to call on members of Congress to oppose credit union efforts to further expand business-lending and field-of-membership restrictions on the tax-exempt industry.

In a message to Congress that coincided with an earlier credit union industry lobbying blitz on Capitol Hill, ICBA reminded lawmakers how the National Credit Union Administration recently skirted the intent of Congress by issuing a regulation considerably expanding the commercial lending powers of credit unions. In its message to lawmakers, ICBA noted that the NCUA rule ignores the ongoing policy debate at the same time the regulator is advancing a plan to essentially eliminate any credit union field-of-membership limitations.

During the policy summit, ICBA and community bankers also will point out to lawmakers how another recent NCUA proposal would virtually eviscerate field-of-membership limitations for federal credit unions.

After the NCUA recently approved a final rule that sidestepped Congress to expand credit union business-lending powers, the industry is advocating legislation (H.R. 1188/S. 2028) that would further raise the congressional cap on credit union member business loans, to more than double the current limit.

This month and every month, ICBA will continue to strongly oppose expanded powers for credit unions as long as they remain exempt from taxation and regulations such as the Community Reinvestment Act.

Notable Quote

Comments on NCUA proposal to bypass credit union field-of-membership restrictions
“NCUA, as a regulator, must examine credit union practices against the requirements established by Congress—not use rulemaking as a means to circumvent the plain language of the Credit Union Membership Access Act or the Federal Credit Union Act.”
—Jennifer Jakel, AbbyBank in Abbotsford, Wis.

“Such a broad expansion of authorities as proposed greatly undercuts congressional-mandated limits on field of membership and will lead to broad expansion of the credit union industry’s tax subsidy, already valued at $26.75 billion over the next 10 years.”
—Jennifer N. Weidner, Canandaigua National Bank & Trust in Canandaigua, N.Y.

“This proposal goes beyond any reasonable definition of local and well defined. Take for example Genco Credit Union, which started in Waco years ago and now has branches in Lufkin, Texas, over 150 miles from Waco.”
—David Lacy, Community Bank & Trust in Waco, Texas

“I do not understand this emphasis at a time when our government is looking for ways to finance multiple programs for lower income working-class citizens.”
—Russ Leix, Community Bank in Newton, Iowa

“The outrageous expansion of credit unions is another example of the unnecessary nationalization of yet another industry in the United States.”
—David Nicholson, Marlborough Savings Bank in Marlborough, Mass.

“The NCUA has been criticized for being a ‘cheerleader’ for the credit union industry rather than a regulator. Actions like this proposal show why the NCUA has earned that reputation.”
—Heidi R. Gesell, BankCherokee in St. Paul, Minn.


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ICBA Events

April 13–14
Fighting Fraud Seminar
Minneapolis

April 19–20
Call Report Preparation Seminar
Minneapolis

April 24–27
Washington Policy Summit
Washington, D.C.

May 4–5
Advanced IT Strategies
Nashville, Tenn.

May 10–12
Real Estate Lending
Seminar
Minneapolis

Anniversary Celebration
A Year of Good Deeds
The employees at Timberland Bank in Hoquiam, Wash., last year launched a 100 Good Deeds volunteer campaign to celebrate the bank’s 100-year anniversary. During the yearlong campaign the bank’s staff completed 185 volunteer charity projects, from holding free document-shredding events to serving meals to those in need to promoting local arts. In one two-week project, staff at the bank’s headquarters, pictured left, collected cold cereal to stock the shelves of a local charity food pantry.

Deposit Insurance
FDIC Proposes New Small-Bank Assessment Formula
The FDIC board of directors has revised a proposal to change the federal deposit insurance assessment calculations for banks with less than $10 billion in assets. Under a new risk-based assessment formula, banks with less than $10 billion in assets would face higher premiums under certain circumstances, including when their assets grow more than 10 percent within a calendar year.

Banks with large commercial real estate loan portfolios would pay higher assessments, determined in part by a loan-mix index.

Facing opposition from ICBA and other groups, the FDIC withdrew a plan that would have treated reciprocal deposits as brokered deposits in the calculation of small-institution assessments.

If approved, the revamped small-bank assessment formula would apply after the Deposit Insurance Fund reaches 1.15 percent of system deposits, which is expected to occur soon. Along with an assessment reduction for small banks required by the Dodd-Frank Act, the new assessment formula would help cut premiums for more than 93 percent of community banks, the FDIC reported.

Level Playing Field
Letters Opposing Credit Union Expansion Flood NCUA
Community bankers filed thousands of letters in joining ICBA in opposing a National Credit Union Administration proposal to further loosen field-of-membership limits for federal credit unions.

Sidestepping congressional intent, the NCUA’s proposal would nearly eliminate common-bond requirements for nationally chartered credit unions. Among other regulatory changes, community-chartered credit unions would be able to claim that a congressional district is a “well-defined local community,” allowing certain large community credit unions in seven states to serve their entire state.

The NCUA’s board could vote on the proposal as early as this spring.

Membership
ICBA Nominates New Officers for 2016-17
ICBA has named the nominees for its 2015-16 executive committee. The following community bankers will serve on the committee, pending a formal vote as required for some positions by ICBA’s board of directors this month during the association’s national convention, Community Banking LIVE in New Orleans.

Chairman — Rebeca Romero Rainey,
Chairman and CEO of Centinel Bank of Taos, N.M.

Chairman-Elect — R. Scott Heitkamp,
President and CEO of ValueBank Texas in Corpus Christi, Texas.

Vice Chairman — Timothy K. Zimmerman,
President and CEO of Standard Bank in Monroeville, Pa.

President and CEO — Cam Fine,
of Washington, D.C.

Treasurer — Derek B. Williams,
President and CEO of Century Bank & Trust in Milledgeville, Ga.

Secretary — Mike Ellenburg,
President and CEO of First Southern State Bank in Stevenson, Ala.

Immediate Past Chairman — Jack A. Hartings,
President and CEO of The Peoples Bank Co. in Coldwater, Ohio.

Past Chairman — John H. Buhrmaster,
President and CEO of 1st National Bank of Scotia, N.Y.

Past chairman — William A. Loving,
President and CEO of Pendleton Community Bank in Franklin, W.Va.

Notable Quote

On FFIEC’s Cybersecurity Assessment Tool …
“The agencies have indicated that the use of the assessment is voluntary for banks in Federal Register notices and various meetings. At the same time, however, the assessment is being used by examiners as part of the examinations process.”
—Jeremy Dalpiaz, ICBA Cybersecurity Policy Expert

On expanding credit union fields of membership …
“If you open up your membership to everyone, there is really no justification anymore for your tax exemption.”
—Paul Merski, ICBA Legislative Advocacy Expert

Member Poll
Obstacles to Overcome
What’s the biggest challenge facing community banks in 2016?

  • 66% – Complying with growing regulatory burdens
  • 13% – Tax-advantaged competitors
  • 11% – Navigating market instability
  • 10% – Recruiting and retaining top talent

Source: ICBA NewsWatch Today poll, January 2016


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Above, the Bippus State Bank employees, front row, from left, are Erin Carter, Amy Tarter, Cathy Johnson, Denise Miles and Susie Ray. Middle row, from left: Kevin Keske, Cheryl Marley, Dawn Downs, Mari Nell Prange and Gaye Krumanaker. Back row, from left: Ryan Warner, Billy Winter, Eric Fawcett and Randy Prange.

Informal Giving
Casual Days for Charities
Since 2007, the employees at Bippus State Bank in Roanoke, Ind., have raised more than $14,000 among themselves for various charities. The donations accumulated each time employees individually contributed $2 every time they wore casual clothes on the bank’s casual Fridays. This holiday season their team fundraising paid for a $400 toy-shopping spree for local low-income families.

Credit Risk
Underwriting Standards Continue to Ease
National bank and thrift underwriting has eased for the third consecutive year, according to research by the Office of the Comptroller of the Currency. The OCC says a general industry trend toward a gradual softening of underwriting standards reflects trends last seen in the run-up to the 2008 financial crisis.

The agency reports that credit standards for commercial and consumer loans have continued to relax in response to competitive pressures and abundant market liquidity. It says its examiners will be focusing on evaluating the underwriting of newly originated loans.

Accounting Rates
Community Banks Avoid Fair-Value Burdens
The Financial Accounting Standards Board issued a long-awaited accounting standards update that changes the recognition of certain financial statement items. In a major victory for community banks, FASB’s final guidance deviates greatly from its original plan to require most assets and liabilities to be reported at fair value.

Under the guidance, equity investments with readily determinable fair values will be measured at fair value with changes in fair value recognized in net income. Additionally, nonpublic entities will no longer be required to disclose the fair values of financial instruments held at amortized cost. The guidance also includes changes to footnote disclosures about the types of financial instruments held on the balance sheet.

The amendments take effect for public banks for fiscal years beginning after December 2017. For nonpublic banks, the amendments take effect for fiscal years beginning after December 2018, and interim periods for fiscal years beginning after December 2019.

ICBA has long opposed fair value measurement for financial assets that community banks do not intend to sell.

Mortgage Regulation
CFPB Responds to TRID Rule Concerns
The Consumer Financial Protection Bureau has noted that its TILA-RESPA Integrated Disclosure rule allows for the correction of errors even after a mortgage closing. Responding to a Mortgage Bankers Association letter expressing concerns with TRID errors that may be delaying or blocking secondary market sales, CFPB Director Richard Cordray wrote that the TRID rule provides for the correction of errors after closing, such as clerical mistakes and violations of monetary tolerance limits.

Cordray reiterated previous statements that the CFPB and other regulators will focus on “good-faith efforts to come into compliance” during the early days of TRID implementation. He also noted that the TRID rule did not change the fundamental principles of liability under TILA or RESPA.

Member Resource
ICBA’s John McNair Now Serving the Northeast
John McNair, ICBA’s senior vice president and regional calling officer for the Mid-Atlantic, has an expanded territory that now includes serving community banks throughout the Northeast.

McNair serves as an ICBA membership and advocacy resource for community bankers. His service area encompasses Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia and West Virginia.

Any community bankers in these states are welcome to contact him at john.mcnair@icba.org or (717) 541-0237.

ICBA Member Poll
Mortgage Mayhem
Is your community bank encountering problems implementing the TILA-RESPA Integrated Disclosure rule? If so, indicate all that apply below.

  • 46% – Delayed closings
  • 43% – Persistent software issues
  • 7% – Question doesn’t apply
  • 4% – Pushback from secondary market investors

Source: ICBA NewsWatch Today polls, December 2016

ICBA Events

March 6–10
ICBA Community Banking LIVE
New Orleans

April 24–27
Washington Policy Summit
Washington, D.C.

April 25–29
Audit Institute (Week 1)
Kansas City, Mo.

May 2–6
Audit Institute (Week 2)
Kansas City, Mo.

May 9-13
Community Bank IT Institute
Nashville, Tenn.

May 16-18
BSA/AML Institute
Minneapolis

June 12-17
Compliance Institute
Nashville, Tenn.

Funding Rules
ICBA Recommended Changes to Brokered Deposit Guidance
ICBA commended the FDIC for modifying its guidance on brokered deposits and suggested additional changes to make further improvements. In a joint comment letter with other financial trade groups, ICBA specifically advised the FDIC to clarify that bank employees serving dual roles are not deposit brokers when they receive compensation primarily in the form of a salary and do not share their salary with a broker-dealer.

The comment letter also addresses call center employees, rollovers and renewals, traditional transactional deposit account products, and government-administered benefits programs.

Last fall the FDIC issued for comment new frequently asked questions on identifying, accepting and reporting brokered deposits. As a result of ICBA’s feedback, the FDIC substantially modified some of its positions.
Read the letter on ICBA’s website, at www.icba.org/advocacy.

Regulatory Relief
Annual Consumer Privacy Notices
The Fixing America’s Surface Transportation Act signed into law in December creates an ICBA-advocated measure curtailing how often financial institutions must issue the annual privacy notices to their customers.

Under one of the so-called FAST Act regulatory relief provisions for community banks, financial institutions, as of Dec. 4, 2015, are no longer required to provide annual privacy notices to their customers if these two conditions are met:

  1. The institution has not changed its privacy policies or practices; and
  2. The institution only shares nonpublic personal information with third-party service providers, including those that market the bank’s own products or services, or products or services offered pursuant to a joint marketing agreement.

While the law’s privacy notice provision does not require regulators to implement a new rule, ICBA is urging the Consumer Financial Protection Bureau to formally clarify in its rules when financial institutions should issue privacy notices under the law’s new provision.

For more information, including ICBA’s comment letter to the CFPB, visit www.icba.org/advocacy.

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Pictured above (from left) are George Clinard with the Senior Housing Crime Prevention Foundation; Paul Jones with MidWestOne; police officer Craig Alexander; Sandy Bailey, Nancy Brown and Meghan Ozinga of MidWestOne; nursing home resident Vern Wells; and Hibbs.

Community Service
Funding Senior Safety
David Hibbs, ICBA’s vice president and Midwest region calling officer (far right), joined a ceremony recognizing MidWestOne Bank in Iowa City, Iowa, for its participation in the Senior Housing Crime Prevention Foundation. The crime prevention program serves to increase the safety of nursing home residents. Above, as part of their participation, the bank’s officials are presenting a $250 check to make safety improvements to Inglenook Apartments, a local HUD facility where about 95 elderly people live.


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Notable Quote

On NCUA Plans to Expand Fields of Membership …
“The NCUA’s sweeping proposed changes to field-of-membership rules are the latest attempt by this regulator and industry advocate to sidestep Congress and extend these tax-exempt institutions’ government-funded competitive advantage over taxpaying community banks. … ICBA strongly opposes the NCUA’s proposal and will actively contest it, as it has the agency’s plans to relax the industry’s business-lending and supplemental capital rules, by any means necessary.”
—ICBA statement

ICBA Events

Feb. 7–12
Compliance Institute
Dallas

March 6–10
ICBA Community Banking LIVE
New Orleans

April 10–13
Credit Analyst Institute
Minneapolis

April 24–27
Washington Policy Summit
Washington, D.C.

April 25–29
Audit Institute (Week 1)
Kansas City, Mo.

May 2–6
Audit Institute (Week 2)
Kansas City, Mo.

On FASB’s expected-credit loss model …
“By requiring all banks to record a provision for credit losses the moment they make a loan and essentially mandating the use of complex and expensive credit modeling systems, the FASB proposal removes community bankers’ discretion to make localized financial decisions. This is antithetical to the community banking model itself and will lead to lower regulatory capital, fewer loans to consumers and slower economic growth.”
—ICBA Executive Committee Statement

On Industry’s Financial Performance …
“Most performance indicators continued to show improvement. Earnings were up from a year ago, loan portfolios grew, asset quality improved, the number of problem banks declined, and only one insured institution failed.”
—Martin J. Gruenberg, FDIC chairman

2016 ICBA Convention
Interactive Convention Brochure
ICBA introduced the newest and possibly easiest way to keep up-to-date on the ICBA Community Banking LIVE® national convention taking place in New Orleans from March 6 through 10. The brochure features comprehensive details for everything related to the convention, including general session speakers, education topics and networking activities.

View the brochure and other current information on the convention’s Web page at www.icba.org/convention2016.

Membership Action
Industry Mover and Shaker
William “Bill” West, president and CEO of the Bank of Tampa, Fla., has been elected to the board of directors of ICBA Bancard, ICBA’s payment services subsidiary. West also serves on ICBA’s Regulation Review Committee.

The Bank of Tampa has $1.4 billion in assets and nine offices in Tampa and Hillsborough County.

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