05/23/2013

Brown-Vitter Bill Valid Solution to Curbing TBTF

ICBA NewsWatch Today 05/23/2013

Advocacy
Brown-Vitter Bill Valid Solution to Curbing TBTF, Report Says
In the “End Too-Big-To-Fail” report released Wednesday, ICBA highlights the Terminating Bailouts for Taxpayer Fairness Act of 2013 (TBTF Act, S. 798), introduced by Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.), as a valid, constructive solution to curb too-big-to-fail risks. “The Brown-Vitter bill has the virtue of being simple and easy to implement without complex new rules. It takes an entirely new direction away from complex rules and regulations,” the report states.

In addition, the report addresses common myths that have been used by too-big-to-fail proponents with clearly understandable facts, including that ending too-big-to-fail would make U.S. banks stronger and more globally competitive, not less.

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.



Congress
Oversight and Investigations Subcommittee Questions Justice Department
The Oversight and Investigations Subcommittee held a hearing titled “Who is Too Big to Fail: Are Large Financial Institutions Immune from Federal Prosecution?” on Wednesday afternoon to address the concerns about the Justice Department’s lack of prosecution for large financial institutions. Mythili Raman, acting assistant attorney general, criminal division, U.S. Department of Justice, stated that “no individual or institution is immune from prosecution” and that the DOJ intends to continue its “aggressive pursuit of financial fraud with the same strong commitment with which we pursue other criminal matters of national and international significance.” View her written testimony .

ICBA strongly supports policies to address the problem of too-big-to-fail and to rein in large banks and financial firms to level the playing field with community banks. The association noted that U.S. Attorney General Eric Holder’s testimony that the size of too-big-to-fail financial firms inhibits Justice Department prosecutions on Wall Street demonstrates that those firms are shielded from any consequences from their reckless actions.

“Not only have these institutions received billions of dollars in taxpayer support because of the systemic risks they pose, they are also apparently immune from criminal prosecution,” ICBA President and CEO Cam Fine said. “Meanwhile, community banks have been left to pick up the pieces under the weight of crushing laws and regulations enacted to halt Wall Street’s unscrupulous behavior.”



Regulation
Regulators Delay Call Report Changes
Regulators have decided to delay certain proposed changes in call reports that would have placed new reporting burdens on community banks starting June 30, 2013.  Regulators have stated that they are reviewing the proposed changes and have decided to delay implementation based on the comments received. Included in the proposed disclosures was a requirement to provide extensive details about consumer service charges reported in the income statement. ICBA argued that the information requests represented a new regulatory burden for community banks with associated costs that would outweigh any benefits provided.  Read ICBA’s comment letter.


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Monetary Policy
Bernanke: Tightening Monetary Policy Is Risky for Economic Recovery
“A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further,” Federal Chairman Ben Bernanke said today in testimony to the Joint Economic Committee of Congress in Washington. Even though the unemployment rate has fallen by half a percentage point since last summer, to 7.5 percent, “the job market remains weak over all,” according to Bernanke’s testimony. Still, he said, the Fed’s accommodative monetary policy, has helped lessen the “headwinds” the economy faces.


Monetary Policy
FOMC Stands Pat on Bond Purchases
Continuing its massive, recession-induced bond buying program, the Federal Open Market Committee decided last month to stay its accommodative monetary course to hold down long-term interest rates and bolster ongoing economic recovery. According to minutes summarizing the FOMC’s April 30-May 1 meeting, “a number” of committee members voiced a willingness to slow the Fed’s $85 billion monthly pace of Treasury and mortgage bond purchases if future economic data continue to improve. However, the FOMC took no action to alter its course of monetary stimulus, deciding to gather more information on the economic trends, including the labor market.

While reporting that the overall economy continued to expand moderately, the FOMC found that housing market activity continued to grow. Members also reported that, on balance, banks were loosening their commercial lending terms and that competition for commercial and auto loans remained strong. The FOMC’s next meeting is June 18-19.



Emergency Response
OCC Issues Guidance on Oklahoma Tornadoes
The Office of the Comptroller of the Currency encourages national banks and federal savings associations to work with customers affected by the Oklahoma tornadoes. Efforts to assist the affected customers may include waiving or reducing ATM fees, temporarily waiving late payment fees or penalties for early withdrawal of savings for affected customers, and restructuring borrowers’ debt obligations.

ICBA separately is reminding community bankers 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.



Products and Services
Ethertel Networks Brings Nearly $1 Million to Community Banks
Ethertel Networks, an ICBA Preferred Service Provider, announced Wednesday that it has enabled community banks to save nearly $1 million on their telecommunications expenses since December 2012.

“Ethertel brings great value to ICBA member banks by identifying opportunities to lower their telecommunications spending,” ICBA Executive Vice President of Services Dan Clancy said. “At a no-cost review, Ethertel will analyze a bank’s usage and service requirements, and then identify carriers who can meet those needs at a lower cost.” Read Release.



Regulation
FDIC Consumer Newsletter Features Tips on Banking in a High-Tech World
The latest issue of FDIC Consumer News features practical tips and information on some of the most important topics raised by consumers, including dealing with debt collectors, finding affordable small loans, thinking about your options after a branch closing or a bank merger, and taking precautions before buying a bank certificate of deposit (CD) from a deposit broker instead of directly from a financial institution. Other topics and tips covered in the latest newsletter are how new bank technology can help consumers (“mobile banking”) and solving common debit and credit problems.


Economy
Existing-Home Sales Rose in April
Existing-home sales rose in April but remained below underlying demand because of limited inventory and tight credit, the National Association of Realtors reported. Sales increased 0.6 percent, and resale activity is 9.7 percent above its level from April 2012. Total housing inventory rose 11.9 percent at the end of April, but listed inventory is 13.6 percent below a year ago.


Education
ICBA Webinar Covers Health Reform Impact on Employers
An ICBA webinar next week will cover compliance with the Patient Protection and Affordable Care Act of 2010. Health Reform: The Impact on Employers, slated for 11 a.m. (Eastern time) Thursday, May 30, incorporates the latest IRS guidance, rules and regulations for implementing the myriad provisions affecting individuals and employers. Register Online.


Holiday Note
ICBA Offices Closed May 27
ICBA offices will be closed Monday in observance of Memorial Day. ICBA NewsWatch Today will resume publishing on Tuesday, May 28.


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.