05/21/2013

USA Today Editorial Supports ICBA-Backed TBTF Act

ICBA NewsWatch Today 05/21/2013

Too-Big-To-Fail
USA Today Editorial Supports ICBA-Backed TBTF Act
ICBA-advocated legislation to take on the too-big-to-fail problem is the kind of aggressive and simple approach that should have been adopted long ago, the USA Today editorial board wrote. The bipartisan Terminating Bailouts for Taxpayer Fairness Act (S. 798) would end the subsidization of big banks and eliminate the need for more complex regulations, according to Monday’s editorial.

S. 798 would implement higher capital levels on the largest megabanks and regulatory relief for community banks to eliminate the too-big-to-fail subsidy. In an American Banker op-ed posted last week, ICBA Chairman-Elect John Buhrmaster wrote that the bill would reduce the likelihood that megabanks would reach the brink of failure and would take an important step toward truly tiered financial regulations.

ICBA strongly supports S. 798 and makes it easy for community bankers to reach out to their members of Congress in support of the measure. Community bankers can use the association’s “Be Heard” grassroots website to send customizable emails and tweets to their senators in support of the legislation.


Credit Unions
Businessweek Article Focuses on Credit Union Tax Exemption
The growth and consolidation of credit unions is raising questions about their tax-exempt status and regulatory oversight, according to an article in the latest Bloomberg Businessweek. The article notes that credit unions were originally designed to serve only a single community or company, but consolidation has led the National Credit Union Administration to open a division focused on credit unions with assets greater than $10 billion.

ICBA last week expressed its strong opposition to controversial legislation that would allow tax-subsidized credit unions to expand into prohibited member business lending. The Small Business Lending Enhancement Act (S. 968), introduced by Sen. Mark Udall (D-Colo.) and 14 original cosponsors, would more than double credit unions’ business-lending cap from 12.25 percent to 27.5 percent of a credit union’s assets.

In a national news release, ICBA noted that Congress put a limit on credit unions’ member business loans to preserve their mission of meeting the financial needs of consumers of modest means. Community bankers can tell their members of Congress to oppose the credit union power grab with customizable messages to lawmakers on ICBA’s “Be Heard” grassroots website.


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Housing
FHA Issues Mortgagee Letters on Home-Retention Options, Streamlined Refinances
The Federal Housing Administration recently released two mortgagee letters with information on interest rates for loss-mitigation home retention options and on subordination of partial claim liens associated with FHA streamlined refinances.

Mortgagee Letter 13-17 provides guidance for determining the interest rates to use when implementing FHA’s Loss Mitigation Home Retention options. Mortgagee Letter 13-16 permits the subordination of partial claim liens for FHA Streamlined Refinances and eliminates consideration of partial claim notes from the 125 percent Combined Loan-to-Value (CLTV) ratio calculation for FHA Streamlined Refinances.

The letters followed a separate mortgagee letter issued recently (13-14) that includes documentation requirements for FHA mortgage insurance of loans when a federal, state or local government directly provides the borrower’s required minimum cash investment. Read More from FHA.


In Remembrance
Past ICBA Chairman Edward Trautz Dies
Former ICBA chairman Edward Trautz died May 9 in Roscommon, Mich. He was 87. Trautz was president of East Lansing State Bank and before that worked at Manufacturers National Bank in Detroit and Oberlin State Bank in Oberlin, Ohio. Trautz was ICBA chairman in 1977-78 and executive director of the Michigan Community Bankers Association from 1983 to 1991. Read Complete Obituary.


Poll
This Week’s Quick Poll
Take this week’s Quick Poll on deposit advance products, and view results from the previous poll on using Twitter for grassroots advocacy. View the Archive.


Resources
ICBA Crisis Resource Center Available
Following tornadoes and severe storms in Oklahoma, ICBA reminds community banks of its Crisis Preparedness Resource Center. The center includes links to relevant resources, timely aid donation information and customizable financial preparedness press releases for consumers.


Education
ICBA Community Bank Chairman’s Forum in August
ICBA is hosting an upcoming open forum for chairmen of the board from across the country facilitated by two of the nation’s leading community bank experts. The Community Bank Chairman's Forum, scheduled for Aug. 2-3 in Mackinac Island, Mich., will offer an opportunity to hear from fellow chairmen on how to handle emerging opportunities and lingering concerns. Participants will also be able to pick up techniques and trends used by other chairmen and to interact and network with peers. Register Online.


Education
ICBA Webinar Tomorrow on Third-Party Service Providers
ICBA is hosting a webinar tomorrow on regulatory guidance and "best practices" for using and managing third-party services providers. “Regulatory Scrutiny of Third-Party Service Provider,” scheduled for 11 a.m. (Eastern time) tomorrow, comes in the wake of substantial Consumer Financial Protection Bureau penalties and fines against Capital One, American Express and Discover. Register Online.