05/22/2013
ICBA Releases Report on Ending Too-Big-To-Fail
ICBA NewsWatch Today 05/22/2013
Advocacy
ICBA Releases Report on Ending Too-Big-To-Fail
ICBA released a report today that examines the impact of too-big-to-fail financial institutions on the U.S. economy and the growing danger of continuing policies that support and encourage excessive financial concentration. The “End Too-Big-To-Fail" report provides an overview of the reasons why Congress, regulators and the American people must take a bipartisan and united stance against the too-big-to-fail problem to ensure that history doesn’t repeat itself and that future generations can rely on a healthy, robust and diverse economy.
In addition, it 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. The “End Too-Big-To-Fail” report also highlights the Terminating Bailouts for Taxpayer Fairness Act of 2013 (TBTF Act, S. 798) as a valid solution to curb this dangerous epidemic.
Finally, the “End Too-Big-To-Fail” report encourages others to join ICBA in pushing for vigorous but practical solutions that will restore a free and safe market for financial services, encouraging much-needed stability in the marketplace to tap the true potential of the American economy.
Read “End Too-Big-To-Fail.”
Read ICBA Release.
Learn More About Too-Big-To-Fail.
Advocacy
ICBA’s Fine: Plan for Prosperity Making Progress
Fortunately for community banks and the communities they serve, ICBA has made considerable progress in Washington this year to ease costly regulations—particularly via the Plan for Prosperity congressional platform, ICBA President and CEO Cam Fine wrote in a message to the nation’s community bankers.
Fine listed several bills advancing in Congress that would implement provisions of the Plan for Prosperity, including measures to end annual privacy notice redundancies and exempt banks and from having to register as municipal advisors with the SEC. He also discussed ICBA’s efforts to provide relief from Basel III capital guidelines, new mortgage rules and regulations on remittance transfers.
To get the industry’s regulatory relief agenda over the top, Fine encouraged community bankers to renew their commitment to advocacy, which is as fundamental to daily operations as taking deposits and making loans.
“We at ICBA encourage community bankers, directors, employees and friends of the industry to continue and renew their push for these essential regulatory relief measures,” Fine wrote. “As I have said before, our very future depends on it.”
Read Fine’s Message.
Tell Congress To Act Now!
Advocacy
ICBA Urges Legislative Fix for QM Concerns
ICBA continued its campaign for needed reforms to the Consumer Financial Protection Bureau’s “qualified mortgage” rules in a statement for the record for yesterday’s House Financial Services Subcommittee on Financial Institutions and Consumer Credit hearing.
While ICBA is encouraging the CFPB to modify the rule to better protect community bank balloon mortgages, a clean solution is needed, the association wrote in its statement. ICBA wrote that its Plan for Prosperity solution is simple and would preserve the community bank lending model.
The Plan for Prosperity—ICBA’s regulatory relief agenda for the 113th Congress—would provide safe harbor “qualified mortgage” status for community bank loans held in portfolio, including balloon loans in rural and non-rural areas. Community banks that hold loans in portfolio hold 100 percent of the credit risk and have every incentive to work with borrowers to structure the loans properly, ICBA noted in its statement.
ICBA thanked Rep. Blaine Luetkemeyer (R-Mo.) for including in the CLEAR Relief Act (H.R. 1750) a provision that would accord qualified mortgage status to mortgages originated and held in portfolio for at least three years by a lender with less than $10 billion in assets. The association noted that it strongly supports the bill because it contains this provision and other needed regulatory relief measures from the Plan for Prosperity.
The Plan for Prosperity is ICBA’s targeted legislative platform designed to ease excessive, redundant and costly regulations on community banks. Many of the Plan for Prosperity relief measures have been teed up in Congress. Therefore, ICBA is encouraging community bankers nationwide to urge their members of Congress to support the plan and help enact these important measures. Contact Congress Today!
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Flood Insurance
Landrieu Introduces Bill To Address Flood Insurance Premium Hikes
Sen. Mary Landrieu (D-La.) introduced legislation to address sharp premium rate increases for National Flood Insurance Program coverage. The Strengthen, Modernize and Reform The National Flood Insurance Program Act would delay premium increases, would repeal provisions preventing new owners of sold homes to continue subsidized rates, and would allow the rebuilding of key community facilities destroyed in a disaster that lie in velocity zones.
The introduction of the bill follows the recent ICBA-backed effort to advance an amendment to the Water Resources Development Act. The amendment, sponsored by Landrieu, Sen. David Vitter (R-La.) and others, was designed to stop rate increases on “grandfathered properties” for five years. The amendment was withdrawn for this vote, but the authors vowed to keep pressing the issue.
ICBA strongly supported that amendment, writing in a letter to lawmakers that the association is deeply troubled by the growing number of reports from community bankers and homeowners across the nation concerning dramatic flood insurance rate increases. These rate increases, which affect both coastal and inland areas, could price individuals out of their homes, disrupt the housing market and halt the economic recovery.
The rate increases are part of the flood insurance reauthorization that Congress passed last summer. Federal financial regulatory agencies recently issued interagency guidance on the reauthorization, the Biggert-Waters Flood Insurance Reform Act of 2012. The Federal Emergency Management Agency has separately developed several fact sheets and brochures on the Flood Insurance Reform Act of 2012 and its impact on the National Flood Insurance Program. Read Agency Guidance. Read More from FEMA.
Taxes
Treasury, IRS Seek Comment on Tax Rules on Bad Debt
Treasury and the IRS are seeking comment on a regulation governing IRS tax audits of community banks. The notice requests public comments on Treasury’s Conclusive Presumption Regulations, which permit banks to take a deduction for any debt that becomes worthless in the taxable year.
Specifically, the agencies are seeking comments on whether:
- changes that have occurred in bank regulatory standards and processes since adoption of the Conclusive Presumption Regulations require amendment of those regulations, and
- application of the regulations continues to be consistent with the principles of the law.
They are also seeking comments on the types of entities that are permitted, or should be permitted, to apply a conclusive presumption of worthlessness.
ICBA has been active on this issue and will remain engaged with policymakers. In a December 2011 letter to the IRS and FDIC, the association raised concerns about IRS auditors challenging community banks’ bad debt deductions.
Comments are due Oct. 8. Read the Notice.
Regulation
Lew Testifies on FSOC Efforts To Strengthen Megabank Regs
Strengthening the regulation of the largest financial institutions and developing an international framework to resolve global financial firms are two of the Financial Stability Oversight Council’s top concerns, Treasury Secretary Jacob Lew told Congress.
Testifying before the Senate Banking Committee, Lew said council members support the development of policies that promote a level playing field, mitigate regulatory arbitrage and address regulatory gaps.
He said the FSOC continues working to evaluate nonbank financial companies for potential designation for supervision by the Federal Reserve and to develop proposed recommendations to address the structural vulnerabilities of money market mutual funds.
Emergency Response
FDIC Issues Guidance on Oklahoma Tornadoes
The FDIC announced a series of steps to provide regulatory relief to financial institutions and facilitate recovery in areas of Oklahoma affected by severe storms and tornadoes. The agency is encouraging banks to work constructively with borrowers experiencing difficulties beyond their control because of damage caused by the severe weather.
The FDIC said that extending repayment terms, restructuring existing loans or easing terms for new loans, if done in a manner consistent with sound banking practices, can contribute to the health of local communities and serve the long-term interests of lenders.
Banks may receive favorable Community Reinvestment Act consideration for community development loans, investments and services in support of disaster recovery, the FDIC said. The agency also will consider regulatory relief from certain filing and publishing requirements.
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.
Emergency Response
Freddie, Fannie Announce Relief Following Okla. Tornadoes
Freddie Mac extended its full menu of relief policies for borrowers affected by disaster to homeowners whose homes were damaged or destroyed by the tornados in Oklahoma and other states. Freddie noted that its disaster-relief policies are targeted to borrowers with homes in jurisdictions that have been declared to be Major Disaster Areas.
Separately, Fannie Mae reminded servicers of options for homeowners affected by natural disasters in the wake of the Moore, Okla., tornado. Under Fannie’s guidelines for single-family mortgages, servicers can grant an initial period of forbearance to any borrower they believe has been affected by the tornado.
Emergency Response
MainStreet Bank Offers Aircharity Product to Community Banks in Oklahoma
MainStreet Bank in Fairfax, Va., is offering community banks whose communities were affected by the tornadoes in Oklahoma access to its aircharity product to help raise funds for those in need. Aircharity allows customers to open an account and accept debit card, credit card and electronic check donations via social media.
Community banks interested in establishing an aircharity account can contact MainStreet Bank by calling (877) 924-7360 or by emailing aircharity@mstreetbank.com. MainStreet Bank has also established an aircharity account on behalf of the American Red Cross. Make a Red Cross Donation Today.
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.
Education
Bank Security Institute in September
ICBA is hosting an upcoming training program designed specifically for the professional security officer, regardless of geographical location, bank size or level of training or experience. The ICBA Bank Security Institute, scheduled for Sept. 8-11 in Minneapolis, defines the industry-standard roles, duties, authority and responsibilities of a bank security officer and provides the opportunity to become a Certified Community Bank Security Officer. The Bank Protection Act and similar regulations require banks to appoint a security officer to develop and administer an up-to-date, effective institution-wide security program. Register Online.